39644961 promotion management notes 2009

8/3/2019 39644961 Promotion Management NOTES 2009

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Promotion Management MNM304-8

MARKET FACTORS AND PRODUCT FACTORS FOR DISTRIBUTION CHANNELTip : CUSTOMERS can MANUFACTURE PRODUCTS in the ENVIORNMENTAL area forEXISTING INTERMEDIARIES

In your introduction you should give practical background information by briefly describingTupperware as a company. Indicate in your introduction that you will be discussing the fivefactors that influence the choice of a distribution channel for Tupperware. Use these fivefactors as headings in the main body of your assignment.

Johnny Roux is the owner of a protea farm in the Cederberg area of South Africa. Theproteas on the farm are harvested by a team of workers and carefully packed in cartons,each carrying a dozen proteas to the target markets in Amsterdam and New York.What kind of transport would you recommend to get the proteas to the target markets?What factors came to mind when deciding on the transport mode ?

Cut flowers are a fragile and perishable product, and have a short life span. As the targetmarkets are far away, a short and very quick mode of transport is required. The best mode

would be air cargo from CapeTown international airport. No inventory will be kept, becauseof the perishability of the flowers, and no warehousing is needed, though care must betaken to control the humidity and temperature levels during the transportation process soas to ensure the flowers reach the target markets fresh.

Discuss the market/customer factors and all the product factors which influencethe choice of a distribution channel.Customer characteristicsThe choice of a distribution channel will depend on the needs and wants of the consumer. If the target market of the company is geographically widely dispersed, The Company willneed help towards reaching it. If small quantities of the product are frequently bought bysmall retailing shops in the rural areas, then a longer distribution channel will be needed.Lets make some assumptions: if the target market of The Company indicated, throughmarketing research, that they would also like to buy their products in townships, thenretailers in these areas should be evaluated as an alternative distribution channel for theirproducts. Consumers are the people who buy a business's products and services. Identifyingthe target market for your product or service is, therefore, one of the most importantactivities undertaken by management. Marketing management has to analyse the consumerto reveal the composition of the market. Changes in the market composition or changes inconsumer needs may create certain opportunities which, if used, can influence thebusiness's long-term growth and survival. The enterprise can operate in the following fivetypes of consumer markets which consist of final consumers or customers, namely

Consumer markets industrial markets government markets

resale markets international markets

These variables will affect the business, which makes it imperative for management to reactto opportunities and threats in the market environment. The choice of a distribution channelwill depend on the needs and wants of the consumer. If the target market for a consumerproduct is geographically widely dispersed, the manufacturer will need help in reaching it. If small quantities of the product are frequently bought by small retailers in the rural areas inthe Northern Province, for example, then a longer distribution channel will be needed. Lets


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make some assumptions: if we assume that the target market of Tupperware has indicated,through marketing research, that they would prefer to buy Tupperware products fromretailers such as Pick n Pay and Checkers, then retailers should be evaluated as analternative distribution channel for Tupperware products.

Product characteristicsFive product characteristics will also influence the choice of distribution channel, namelythe

1. Perishability life span2. Bulkiness size, space3. Complexity -4. Degree of standardisation what to keep5. How fashionable the product is. change over time

The more perishable the product is, the shorter the distribution channel will be.Standardised products, on the other hand, follow a longer distribution channel thancustomised products because they are sold to many retailers who then sell them tothousands of consumers. Owing to the fact that The Company sells perishable product, it

would most likely use a shorter channel, but with more retailers. Five product characteristicswill also influence the choice of distribution channel, namely the perishability, bulkiness,complexity and degree of standardisation of the product and how fashionable the product is.The more perishable, bulky and complex the product, the shorter the distribution channelwill be. Standardised products, on the other hand, follow a longer distribution channel thancustomised products because they are sold to many retailers and wholesalers, who then sellthem to thousands of consumers. Due to the fact that Tupperware sell standardisedproducts that do not perish easily, it could probably use a longer channel with moreintermediaries

Manufacturer characteristicsThe l arger the manufacturing enterprise the better the chance of selling directly toretailers such as cafs and spaza shops .A s mall manufacturing business does not have the resources to be able to dictate whereand how its products must be sold. It is therefore evident (if we assume that The Companyis a big organisation) that they could expand their distribution channels to include the smallretailers in the townships. A business is dependent on suppliers. An example of a supplier isthe supplier of capital to a business. Traditionally, the commercial banks are the suppliers of capital to small and medium-sized businesses. Listed companies such as Pick n Pay have anadditional supply of capital provided by their shareholders. The market environment alsocontains opportunities that the organization may use to its own benefit, as well as threatsthat need to be countered. The larger the manufacturing enterprise, the better the chancewill be of selling directly to a large retailer or to the final consumer. A small manufacturingbusiness does not have the resources to be able to dictate where and how its products mustbe sold. It is therefore evident (if we assume that Tupperware is a big organisation) that

Tupperware could expand their amount of distribution channels to include big retailers suchas Pick n Pay.

Existing intermediary characteristicsThe availability and quality of existing intermediaries are also determining factors in theselection process. Some retailers will not carry an unproven or new product, others do notwant to carry stock at all. In some instances the poor quality of existing intermediaries orthe unavailability of intermediaries makes it necessary for the manufacturer to establish itsown channel to the target market. The Company is currently using direct selling. There are,


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however, other existing intermediares available in the market. Mention the otherintermediaries (Wholesalers, Retailers, merchants, brokers, manufacturers, serviceproviders)that The Company will have to use and evaluate them in your recommendation of an alternative channel for the company. Intermediaries, such as wholesalers and retailers,evolved to bridge the gap between the manufacturer and the consumer. One such exampleis the development of convenience shops at filling stations and the resultant threats to the

traditional convenience stores, such as cafe's. The availability and quality of existingintermediaries are also determining factors in the selection process. Some wholesalers orretailers will not carry an unproven or new product, while others do not want to carry stockat all. In some instances the poor quality of existing intermediaries or the unavailability of intermediaries makes it necessary for the manufacturer to establish its own channel of wholesalers and/or retailers. Tupperware is using direct selling. There are, however, otherexisting intermediares available in the market. Explain the other available intermediariesand evaluate them in your recommendation of an alternative channel for Tupperware.

Environmental characteristicsHere factors such as the disposable income of the consumer, the inflation rate , thecompetitive nature of the industry, urbanisation, technology, political and legalvariables and socio-cultural changes exert an influence on the choice of a channel. Youmay, for example, elaborate on the increase in income of the previously disadvantagedcommunities and that they are now prepared to pay extra for a quality product.Competitorsare a natural part of a capitalistic society. We are accustomed to the fact that variouscompetitors compete for the consumer's money in the case of most products and services.Organisations face two basic types of competition, namely, intra-type competition and inter-type competition. Intra-type competition refers to the competition between two or moremarketers who use the same type of business format. Shoprite supermarkets, for example,compete with Pick n Pay supermarkets as they use the same type of store, layout andinformation system, and carry the same type of stock. Inter-type competition refers to thesituation where two or more marketers compete with different retail formats. An example isthe Edgars fashion retail group, which also competes with Pick n Pay hypermarkets in selling

clothing to customers. The competition that occurs within an industry also has a significantimpact on the competitiveness of the organisation and needs to be carefully analysed. Nextwe look at the intermediaries. Here factors such as the consumers disposable income,inflation rate, competitive nature of the industry, urbanisation, technology, political andlegal variables and sociocultural changes exert an influence on the choice of channel. Youcan elaborate on the use of for example technology on the distribution of Tupperwareproducts. Tupperware could, for example, consider selling directly on the Internet

Conclusion

Conclude your answer by summarising the most important aspects mentioned. You shouldindicate which alternative intemediaries Tupperware could consider, and suggest analternative channel for the distribution of Tupperware products. For example, Tupperwarecould make use of more intermediaries, like wholesalers to retailers, in its distributionchannel because its products are not perishable or very complex and the consumer wants tobuy Tupperware at Checkers and Hyperama.


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As a manager and owner of Eezee Enterprises a company which sells trendy,As a manager and owner of Eezee Enterprises a company which sells trendy, imported women's clothing Mr Samborawants you to explain to him how theimported women's clothing Mr Samborawants you to explain to him how the variables in the macro-environment may influence his business. Draw up a list of variables in the macro-environment may influence his business. Draw up a list of all the macro-environmental variables that may influence his business.all the macro-environmental variables that may influence his business.The macro-environment

. technological . economic . social . physical . politico-government . international

You should have identified six variables which may affect Eezee Enterprises in differentways. These variables are listed below:

The technological environment. This environment is affected by innovation and change.New manufacturing processes and new technology may, for example, influence the type andquality of clothing being sold by Eezee Enterprises. One needs only to think of the newtypes of materials available, such as those which combine natural and synthetic fibres tocreate crease-resistant materials.The economic environment. This variable is well known to everyone. An increase in theinflation rate, changes in the exchange rate and a higher rate of personal tax are examplesof how the economic environment may influence Eezee Enterprises' clothing andMr Samborain his personal capacity.The social environment. Social changes are prevalent throughout the world and also inSouth Africa. A decline in the population growth rate may eventually have a negative impacton the sale of trendy imported clothing. The changing role of women in society (eg morewomen in full-time positions) may be a positive variable in the case of Eezee Enterprises and may result ina higher turnover.

The physical environment . This variable is of great concern to people all over the world.Scarce resources are utilized in the packaging of clothing and the wastage of packagingmaterial must be of concern to Eezee Enterprises.The politico-governmental environment , also known as the institutional environment.This variable in the macro-environment would be of particular concern to EezeeEnterprises.One example of the effect of this variable would be the surcharges on importedclothing. This wouldhave a direct influence on the selling price of the clothing sold by Eezee Enterprises in SouthAfrica.The international environment. South Africa is part of the global village. As such, oureconomy and its businesses are directly influenced by the political troubles of the MiddleEastern countries, for example. Eezee Enterprises may benefit from a better exchange rate,which should enable Mr Sambora to import his clothing at a cheaper price.


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CLASSIFICATION AND DESCRIPTION OF RETAILERS & AMT OF SERVICE THEYCLASSIFICATION AND DESCRIPTION OF RETAILERS & AMT OF SERVICE THEY RENDER.

PRODUCT LINES (ASSORTMENT) THEY KEEPPRODUCT LINES (ASSORTMENT) THEY KEEP

Retailers

CategoriesMerchant wholesalersRack Jobber perform most distribution functions, provide and stocking racks in retailerseg pick n payCash & Carry Wholesalers carries limited selection of products, doesnt transport to endconsumers eg. Metro Cash and CarryDrop Shipper takes title of the product but doesnt handle physical distributionTruck Jobber operates small warehouse , uses trucks to carry goods to retailers

Manufacturers Wholesalers Producers product set up own distribution . May set up their own wholesaling operation egsales/branch offices eg. Link, Family circle and Plus PharmaciesBrokers and Agents intermediaries that bring together producers and custom forms & sales arrangement eg. Selling agents, import-export agents & purchasing agents.

Merchant Wholesalers Rackjobber = perform most functions Cash-&carry = limited quantity no transport Drop-shopper Truck jobber = wholesaler small quantities, truck carry G

Manufacturer Wholesalers =Brokers / Agents = act on behalf of clients

Services Performed by retailers Location = located near homes, convenience for P/S Variety = wide variety offered and forecast trends Re-assortment = buys bulk and breaks down Info = about goods Finance = credit and leasing Ordering = ordered on customers behalf

Types of Retailers

Department Stores = Woolworths Specialty Stores = American Swiss Chain Stores = Game, Pick-n-Pay Super markets =Spar


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Discount stores = Dion Buying centers = Eastgate Franchise = Wimp, Steers, McDondalds

QUESTION :QUESTION : NAME THE SALES PROMOTION METHODS AIMED AT A CONSUMER THAT A STORE COULD USE TO PERSUADE CUSTOMERS TO BUY THEIR PRODUCTS .

IntroductionIn the introduction to your essay you should provide practical background to yourbusiness, for example, that NeatClean is the name of your business. You should alsospecify the target market, for example housewives, which you wanted to persuade tobuy your products by using sales promotion techniques.

Sales promotion techniques:A broad range of customer-oriented sales promotion techniques is used by marketingmanagement in its battle for consumer loyalty. Neatclean could use the following salespromotion techniques:

Sampling often included with an introductory discount offer & even an on pack premium. Itcan also be used in an attempt to revive a slumping product / as a serious entry barrier.Consumer deals are short-term promotions offering consumers a saving or a bonus on thepurchase of a product. Examples of consumer deals include price-offs and bonus packs.Both these methods could be used by NeatClean. For example, NeatClean could offer 20%off on the regular price of their detergents. In this way consumers can be conviced of savingon price. By doing this NeatClean can reward regular brand users, induce consumers topurchase larger quantities of detergents that they normally would and establish a repeatpurchase pattern after an initial trial purchase. Bonus packs could also be used byNeatClean. This can be done by offering two washing detergents for the price of one. Theycould also use a package which is larger than the standard one, stating that consumers get50 ml free. Sampling places a free product in the hands of the consumer for trial, with theidea of letting the product sell itself and of encouraging consumers to purchase the producton a regular basis. NeatClean could make use of this method by placing samples of a newwashing detergent in the form of small sachets stuck to a page in a womens magazine.

costly used to launch new product with other methods of communication free sweets, free lipstick best for showing key attributes may rejuvenate slumping sales

complex process outsourced to other companies

Price Incentives are variations of short term price reductions, such as sales , intro offersand specials. Eg Edgars store sales where certain lines will be put on sale or a pricediscounted.

S.T price reductions Low introductory offers Specials


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Coupons Offers price deals . Redeemable at a retail store, used by retailers andwholesalers to gain reimbursements from the mnfrers.. Coupons are certificates distributedby manufacturers to consumers, redeemable at retail outlets, giving the consumer aspecified price reduction on a particular product. The coupon usually contains information onthe brand and package size, the value of the coupon and the expiry date. Neatclean could

possibly issue coupons with specific price reductions on a specific washing detergent. Gained to use reimbursements Limited price reductions Have timeframes attached (eg: valid until 30 October) Used to develop selective demand May inserted in newspaper

Premiums foods can offer on- or in-pack gifts eg Pokeman tazzos that become collectableitems. It encourages repeat purchases, increased sales, brand switching & added brandvalue. A premium is the offer of an article of merchandise either free or at a reduced priceto induce purchase of another product. Various types of premiums can be used, namely in,on and near pack premiums, free-in-the mail premiums and self-liquidating premiums.

free gift / reward for purchase stimulate repeat purchasing increases amount purchased may switch brand added value time magazine : free watch pokemon cards

Tie-in promotions 2 types inter and intra co. tie ins. Intra-company tie-ins is a salespromo involves 2 brands belonging to a single market eg. Toothbrush & Toothpaste should appeal in the same market)Inter-company tie-ins involve joint promos. 2 or more cos that are not in directcompetition but whose products are complementary eg. Ster Kinekor win a trip to theOscars with other prices involving BMW.

promotion between 2 brands in a single competitionIntra Company

2 brands from single company (tooth brush and paste) Inter Company

Promo between 2/more brands from non-competing companies

Trade shows Staff efficiency, positive relationship bet. Expenditure per attendee, specialistindustry trade show are more effective than multi-industry shows

Frequent shopper programs based on 2 principals all customers are not equal andbehavior follows rewardbased on 2 principles

customers are not all equal behavior follows rules

PARETO PRINCIPLE = 20% customers = 80% salesShould motivate customers to develop loyalty


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Competition / contest / sweepstakes allows mnfrers to collect demographic & evenpsychographic info from their target market via entry forms. Prizes can add value to brandby association. Can result in free publicity to the manufacturer. Sweepstakes eg Readersdigest have lost popularity. Promotional activities that involve consumers in the advertisingand merchandising activities of the manufacturer by gaining their participation in games of skill or chance are known respectively as "contests" and "sweepstakes". Neatclean could

introduce a contest where entrants are required to say in less than 20 words why they likeNeatCleans detergents. Proof of purchase of one of NeatCleans products would be required.

offer probability of winning a reward help create / select name create awareness of a product increase sales

Bonus packs These offer more product either in a larger container or multiple units forthe same or a reduced price, which amounts to a price-off per unit

larger quantitiesmultiple units of reduced price

Warranties part of the product offering. Can serve as an incentive to buy and this canbe deemed a consumer promotion. incentive to buy more used to provide compensation is product defective money back replacement free service free repairs

Refunds and rebates

A refund or rebate is a cash discount of reimburesement given by the marketer to theconsumer on submission of proof of purchase. NeatClean could possibly give a refund of 20% on proof of purchase of a specific detergent.

Point-of-purchase promotionManufacturers make use of displays to attract the attention of consumers and tostimulate them to purchase the product. These displays encourage impulsive buying. Apoint-of-purchase display involves the use of display materials such as posters, banners,shelves, mobile displays, price cards and specially designed racks or window displays.NeatClean could make use of specially designed posters and banners which could be putup everywhere in stores to promote their detergents. A special rack with bright colourscould also be designed for displaying the washing detergents.

GiftsGifts, also known as "specialities", are novelties on which the businesss name or theadvertising slogan or logo appears. These articles are handed out free of charge tocustomers. NeatClean could hand out pens, t-shirts and pocket diaries on which thename NeatClean appears in order to gain goodwill and obtain exposure for their washingdetergents.

Conclusion


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End your essay with a suitable conclusion. Emphasise, for example, that by making useof these sales promotion methods and the reward they offer, NeatClean could persuademany consumers to buy their washing detergents.

PHYSICAL DISTRIBUTION/LOGISTICSBriefly discuss the main activities of logistics that managers should perform.Identify two of these activities that are more relevant to SingNow than the others. Forinstance, order processing when street vendors indicate how many CDs they require. Thetransportation of the products is also important should they be delivered by the salespersons or should other personnel be used for it.

Logistics activities have one overarching goal, namely, to develop and maintain the steady

flow of products from the manufacturer to the final consumer. The four major categories of logistics activities include order warehousing, inventory management, processing andtransportation. Letus briefly look at each.

WarehousingThis is where inventory is stored before it is sold. Warehousing performs a number of functions, such as receiving, sorting and storing the goods, and filling and dispatching theorders. Three decisions are important in terms of warehousing management. These are todecide how many warehouses are needed, where they should be located, and what type of warehouse to use (private or public warehouses, or distribution centres). Each type has itsown characteristics and uses, and management needs to consider these carefully to choosethe correct type for the organisation's logistical requirements.

Functions:o Receivingo Sortingo Storageo Filling orderso Dispatching

Decisions:o how many


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o what types (public, private warehouses / distribution centres)o where to put warehouses

Inventory management Traditionally done by the purchasing dept but is still part of the logistic function. Thisinvolves keeping an eye on the inventory levels, so that customer needs can be met and sothat the minimum levels are maintained. Companies like to carry sufficient stock to fill allcustomer orders immediately. This is, however, not always cost effective. Inventory decisionmaking involves knowing when to order and how much to order. There are two issuesinvolved in doing this, namely, the reorder point and the economic order quantity.Thereorder point occurs when inventory is at a certain level, a level which indicates the need toplace another order.This is calculated by taking into account the order lead time, the usagerate andthe safety stock level needed.The economic order quantity (EOQ) is the quantity to order so that the sum of the inventorycarrying costs and the order processing costs are kept to a minimum. It is calculated usingthe following formula:EOQ = 2 D OI Cwhere:D =annual demand in unitsO = costs of placing an orderI = inventory carrying costs as a percentage of annual inventory investmentC = cost of one unit of the product Aspects such as just-in-time management and ABCinventory analysis have also provided advantages to organisations in terms of managingtheir inventory levels.

Objective-minimize inventory cost (when to order and how much to order)Factors to consider:

o reorder point (when inventory reaches a certain level = place order)o usage rate (measured as usage per day sold/used up)o safety stock (does not run out of goods)o economic order quality (EOQ)o just-in- time (JIT) ( eliminates forms and unnecessary waste. Right products

arrive at the right qty when it is required = achieved thro KANBAN)

Order processingThis begins when the order is placed and continues until the customer receives the product.This process may continue a little longer so that database marketing can take place.The three basic tasks involved in order processing are

1. order entry2. order handling3. order delivery

Advances in electronic data interchange, where suppliers, manufacturers and distributors

are connected via an electronic system , have provided many advantages to organisations,both among the members of the system and within the manufacturing organisationitself.Electronic Data Interchange (EDI) (e-mails, increased productivity due to fasterresponse, improved channel relationships, increase market opportunities, increasedaccuracy, decreased costs and paperwork

Transportation


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This is what is used to move the products from the manufacturer through to the finalconsumer.There are five basic modes of transport, each with its own characteristics anduses.

Modes:o Railo Roado Airo Pipelineo Watero Inter-model (more than on type)

Factors influencing selection:o Costo Timeo Accessibilityo Capabilityo Frequencyo reliability

Materials handlingTransfer of goods in and outside firmObjectives: lowest cost, maximum capacity utilisation, minimum handling, employeesafety, service quality.

Practical guidelines:Identify two of these activities that are more relevant to SingNow than the others. Forinstance, order processing when street vendors indicate how many CDs they require. Thetransportation of the products is also important should they be delivered by the salespersons or should other personnel be used for it.

EXPLAIN THE PRIMARY VALUE CHAIN ACTIVITIESYou should be able to explain the following primary value chain activities: Inbound logistics, that is, the receiving and warehousing of raw materials, and the

distribution of these raw materials to manufacturing as they are required. Operations , that is, the process of transforming inputs into finished products and

services. Outbound logistics, that is, the warehousing and distribution of finished goods. Marketing and sales , which includes the identification of customer needs and the

generation of sales. Service, which includes the support of customers after the products and services are

sold to them

These primary activities are supported by. the infrastructure of the firm. the management of human resources. technological development. procurement

THE DEFINITION OF `DEMAND CHAIN'' AND THE DIFFERENCES BETWEEN THE SUPPLYCHAIN AND THE DEMAND CHAIN


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The supply chain starts with the origins of the raw material used in the production of theproduct and ends once the product has been discarded or recycled. The demand chainrefers to a need articulated by the consumer which is then met by a product supplied by theproducer.

DEFINE``CHANNEL MANAGEMENT'',``DISTRIBUTION CHANNEL'' AND `INTERMEDIARIES''.

Channel management is the way in which a distribution channel is managed.A distribution channel is structured in such away that it links a group of organisations whichmake a product or service available to the consumer.

BASIC CHANNEL FUNCTIONS Transactional functions . These involve contacting potential customers, promoting

products and soliciting orders. Logistical functions. These involve transporting and sorting goods to overcome

temporal and spatial discrepancies. Facilitating functions. These functions focus on gathering information about other

channel members and consumers, and extending credit and other financial services

to facilitate the flow of goods through the channel to the final consumer.MARKET COVERAGE DECISIONS

Intensive coverage. This involves the placement of products in as many locationsas possible by using the optimum number of intermediaries.

Selective coverage. This involves the placement of products in a morelimited number of locations.

Exclusive coverage. This limits the availability of a product to a very smallnumber of locations.

THE TERM ``DISTRIBUTION SYSTEM'' refers to a complex system of agents, wholesalersand retailers through which manufacturers move products to their intended markets.

EXPLAIN ALL THE DIRECT MARKETING METHODS (MEDIA) AVAILABLE.EXPLAIN ALL THE DIRECT MARKETING METHODS ( MEDIA) AVAILABLE.Tip : DIRECT MAIL to TELEMARKETERS can get a DIRECT RESPONSE PRINT MEDIA& BROADCAST MEDIA to INTERACTIVE MEDIA


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Direct marketing media is an interactive marketing system used by one or more media of advertising to gain a measurable response and/or transaction at any place.

IntroductionRemember that for each of the direct-marketing media that you propose THE COMPANYshould use you must briefly discuss the objectives of the campaign. For instance a direct-

mail campaign could be used to tell prospective customers about the wide range of productsavailable, the different quality categories and the stockists (retailers) that keep the productsof THE COMPANY.

Direct-mail Direct-mail uses the postal system or private delivery organizations to get the product ormessage to the customer. THE COMPANY could use the following components of a direct-mail package:

The mailing envelope could be used to arouse interest and thus cause the reader toopen the envelope.

The letter should be personalised and relate to the self interest of the reader. The pamphlet (circular) should give details about the products of THE COMPANY,

namely the specifications, colours available, photographs, guarantees andendorsements.

The response device is the order form, and THE COMPANY could include with it a toll-free phone number to render advice to potential customers.

The return device is any mechanism that allows the customer to return thenecessary information to THE COMPANY. It may be an information request form, anorder form, or a payment.

TelemarketingIf you have a telephone, you probably do not have to be told about the rapid increase inthe use of telemarketing, or sales by telephone. Telemarketing is a combination of telecommunication technology, and information systems. There are two types of telemarketing, namely inbound and outbound telemarketing. Inbound telemarketing is

the type where the call originates from the customer, while outbound telemarketingoriginates from the marketer. Inbound calls are usually in response to a marketer'sactions. THE COMPANY, for example, might use a direct-mail campaign inviting peopleto phone the company for advice, or for a special deal. Outbound telemarketing is usedby marketers for activities such as opening accounts, qualifying potential clients,providing customer service and profiling customers. THE COMPANY could applytelemarketing by:

taking orders and cross selling handling complaints informing customers about special deals providing sales support by scheduling sales visits and confirming appointments managing accounts by maintaining relationships between customers and

telemarketersTHE COMPANY could also use telemarketing to schedule demonstrations of new products

to largeprospective paint buyers.

Direct-response mediaIn the case of THE COMPANY an agreement will have to be reached with their stockists(retailers) regarding their attempt to sell to franchised retailers. However, direct-marketing does not always


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attempt to sell the firms products , but may merely aim to elicit reaction fromprospective customers to get more information about the products, or to visit thestockists of the products.Direct-marketing through mass media such as

TelevisionCreativity and impact, coverage and cost effectiveness, captivity and attention,

selectivity and flexibility, and demonstration of the product used)RadioCost and efficiency, inexpensive to produce and radio time costs are low, potentialfor mental imagery, the ability to reach selected audiencesMagazines andAudience selectivity, creative felxibilty, long life, prestige and consumer receptivity,servicesNewspapersDifferent types, daily/weekly/national, special audience/supplements TYPES Displayadversting, Classified & Special ads and insertsExtensive penetration, flexibility, geographic selection, reader involvement andacceptance, service offered

are used to stimulate a direct response from prospective customers, especially when tiedto a coupon or a toll-free number. You must discuss these direct response media(printed material, radio and television) separately and propose to THE COMPANYsmanagement which one(s) they should use. Remember to spell out what theobjective(s) of the campaign is/are. A very important printed medium that THECOMPANY should use is a catalogue. For a catalogue to be successful, there are criteriathat the company must meet. The consumer must think the products are special andonly available through the catalogue. Consumers must also think that they are receivinga good deal, because if the product is available at the same price at the local dealer, acatalogue sale will be unlikely. Television is often well suited for demonstrating a directmarketer's product, and can be used to sell the product or service, generate leads, or tosupport direct-marketing efforts in other media.

Interactive electronic mediaAn electronic shopping medium links both the buyer and the company interactively.Thus, by using a keyboard, a consumer can request information about THE COMPANYsproducts which would then appear on the screen. The viewer can then respond withfurther questions or placing an order and paying for the product, if direct selling tocustomers is used. The Internet is a worldwide means of exchanging information andcommunication through a series of interconnected computers. THE COMPANY could usethe World Wide Web as a communication tool by providing information about theircompany, their products and services, advice on product usage and where the productscould be purchased.

COLLECT ANY THREE DIRECT MAIL PACKAGES THAT YOU (OR A FRIEND) HAVERECEIVED OVER THE PAST MONTH. EXAMINE THE THREE PACKAGES AND SEE IFYOU CAN IDENTIFY ANY UNIQUE CHARACTERISTICS IN THE PACKAGES.When you answer a question such as this one, you should always include the theory andpractical examples relevant to the question. Let us have a look at the characteristics thatRoberts and Berger (1999:4^6) and Jones

Direct marketing is targeted. By using either lists of selected names or theinformation in a customer database, direct marketers can aim their direct


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communication at specific individuals identified as possible customers. This meansthat the marketing venture is focused on the person as an individual, which is notpossible in general marketing. Precise targeting makes it possible to identify newmarket segments with profit potential.

Direct marketing is personal. Modern printing technology and database applicationsmake a broad range of personalisation techniques and one-on-one customised offersand messages possible. The information in the database can be used to build up anongoing relationship with the customer/prospect, because the customer informationenables the direct marketer to make appropriate and persuasive presentations andoffers to the customer. Those customers, for example, who have already purchasedproducts in the past, can be encouraged to buy other similar products. SA Eagle, forexample, could send letters to their individual clients (Dear Gerda) stating thatbecause they are the holder of a retirement annuity they qualify for a specialpremium on an education policy. The message is addressed specifically to individualpolicyholders.

Direct marketing is immediate action. Direct marketing always makes an appeal forspecific and immediate action, such as the purchase of a product or a request formore information. The sales pitch usually includes a deadline date or an early birddiscount offer, for example:``Order now to receive 10% discount'' or ``call now toqualify for the special offer''.

Direct marketing is measurable. Direct marketers are accountable for every randthey spend. Because each direct-marketing message asks for an action, themarketer is able to measure the effectiveness of mailings, calls and advertisementsby tracking the sales, leads or other responses received.

Direct marketing is testable. Direct marketers are accountable for every rand theyspend. They can measure the effectiveness of mailings and calls, and track the salesof specific products. Since direct marketing is personalised, it is possible to identifythose customers who have been invited to buy and those who reacted to theinvitation to buy.

Direct marketing is flexible. The marketer sets the mailing dates, so there are nopublication deadlines or time frames set by a magazine or other publisher. The directmarketer has control over the size, colour and format of the mailing, as well as whenthe communications are released.

The characteristics of a good marketing objective are quantifiable are aimed at the target market have a time frame are realistic are attainable

EXPLAIN THE 5 MAIN FUNCTIONS AND ACTIVITIES THAT ARE PERFORMED BEXPLAIN THE 5 MAIN FUNCTIONS AND ACTIVITIES THAT ARE PERFORMED B Y

INTERMEDIARIES.INTERMEDIARIES. They resolve discrepancies ( geographics, qtys kept, perishable stock, qty

and assortment of products, help in standardization, assembly of products i.esize, quality and weight)

They close gaps and provide utility (form, time , place & possession betmnfrer & consumer)


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They perform distribution activities (TRANSACTION buying, selling & Risktaking : PHYSICAL warehousing, order processing, storing, sorting andtransporting : FACILITATING financing, garding & Market research.

They specialize in the distribution channe l (perform all the above) Efficiency of exchange

o Intensive = convenience productso Selective = shopping productso Exclusive distribution = the product is available to a very small no. of

locations

Discuss the forms of publicity that a company should consider to promote theirDiscuss the forms of p ublicity that a company should consider to promote their business and its products.business and its p roducts.

Press releases Info distributed to the media for publication or broadcast. When anew product is developed, the benefits and characteristics can be emphasized to thecommunity (eg the Company could release a notice to the press about how it intendsto help out an orphanage or school with its product)

Press conferences Called by orgs to announce an event, accomplishment or otherhappenings.(eg the Company could collect representatives from the press andaddress them about steps taken to reimburse the cause)

Exclusives (exclusive rights to information) one media/medium eg SABC TVnews is given exclusive rights to info to ensure possible coverage on a maintelevision news bulletin or a co. can give their side of a story to YOU orHUISEGENOOT in an exclusive interview.

Interviews with key employees Chat to the CEO who can give extensive coverageand visions. Provided that he/she is well trained. This can assist in getting rid of negative publicity.

Community involvement Companies can show how they are actively involved in

the community with eg Aids awareness and can offer their support tocompanies/orphanages in the form of donations or assistance.

Leaked information Leak important info, so people find out things and talk about itfor the companies benefit.

Media launches of new products, etc Hold media launches. Eg A motor vehicleco. launches a new model of car at an upmarket region eg The Lost city or Mauritiusand Motor journalist are invited to attend the launch and they are inclined to writegood reviews on the vehicle.

Practical guidelines:The Company could be advised that they should make use of two methods of publicity tocommunicate their new method of marketing to target segments, namely press releases

and community involvement be sponsoring eg. a soccer tournament in SowetoTo avoid draw backs or negative publicity, the org must practice crisis management, & mustuse sound marketing communication practices to ward off threats Refuse to comment,attempt to discredit the source or negative approaches such as hiding the truth is less likelyto be successful


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EXPLAIN THE CAUSES OF CONFLICT THAT A COMPANY MAY EXPERIENCE IN THEIR EXPLAIN THE CAUSES OF CONFLICT THAT A COMPANY MAY EXPERIENCE IN THEIR DISTRIBUTION CHANNEL AND HOW THE CONFLICT CAN BE SOLVEDDISTRIBUTION CHANNEL AND HOW THE CONFLICT CAN BE SOLVEDChannel Conflict a situation in which one member of a distribution channel perceivesanother member as a rival engaged in behavior designed to injure, thwart, or gain scarceresources at the expense of the original member. Some of themost common causes of conflict include the following (Kotler& Keller 2006:491):. Goal incompatibility. Individual channel members may have goals which conflict with thegoals of other channel members.. Unclear roles and rights. Individual channel members may clash due to uncertaintysurrounding their roles within the channel. This conflict can be avoided by clearly explainingthe roles of and the relationships between each channelmemberwithin the channel.


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. Differences in perception.Manufacturers may have a positive view of the channelprospects,whilst intermediariesmight hold a view that is not as positive. Opencommunication is essential to resolve this conflict.. Intermediaries'dependence on the manufacturer. In this situation, the manufacturer holdssignificant influence in the channel based on its product and other marketing decisions. Thispower presents a

significant opportunity for conflict. In industries where the manufacturer does not hold thispower, the chances of conflict are significantly reduced.

Oversaturation too many distributors (Common in the distribution channel & occurs when the mnfrer for eg. Allows too many distributors in a sales area)

Conflict over stock levels (Holding stock keeps capital tied up which does notprovide an immediate return on capital. Capital tied up in stock is borrowed =interest costs are involved)

Direct versus indirect channels (Some mnfrers have their own sales force to callon certain customers, while certain distributors call on the same customers)

National versus regional distributors (Similar to the above example) Large account coverage ( Sales quotas (Forcing intermediaries to adhere to sales quotas or setting quotas

that are unattainable) Market life cycle channel transition (Markets change over time & follow a life

cycle) New Market development (Mnfrers want to spread their wings and sell to new

markets in which existing markets arent selling.) New Product launches (Some stores dont want to sell/ take a risk at selling new

products) Channel tasks to be performed (Where mnfrers want/ need to send mail to

customers on behalf of the mnfrer. If the distributor sees no benefit from this itwould causes channel conflict)

Technology required (Buying straight from the net may be tempting to themanufacturer)

Training (Some intermediaries care less about training and performance of salesforce)

The Phantom channel (When unauthorised vendor gets hold of a product and sellit)

Refusal to be locked into a singular supplier (when manufactures wants theintermediary to stock only his product)

Over selling (When a product is launched and does well, the mnfrer cannot supplythe demand for the product)

Bureaucratic vs entrepreneurial philosophies (Management styles differbetween the manufacture and the intermediaries)

Pricing issues (Price/ competition has always been a problem) Profit margins and compensations (The value of the profit that the intermediaries

receive is always a conflict if not handled properly.) Competition over resources (This occurs when 1 or more distributors compete for

resources, eg new training programmes that increase dramatically) Train shipping (When a mnfr ships products out of its allocated area to sell the

product to another distributor) Assigned markets (When new markets develop, mnfers dont invite existing

distributors to have 1 st refusal of the new market)


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Conflict resolution in the distribution channel . (The use of power by channelmembers and attempts by channel members to gain more power)

METHODS TO SOLVE CHANNEL CONFLICTMETHODS TO SOLVE CHANNEL CONFLICT(the conflicting members need to share mutual objectives and common goals need to beshared)1. Persuasion (this implies that the objective by both parties differ but these parties

are open to modify their objectives and attain the common objective)2. Negotiations (Set aside their way of thinking and create a new agreement between

channel members without referring to super-ordinate goals)3. Politics (Using outside parties to resolve the conflict)

Edgars is planning a summer sale for all their swimwear and beachwear. Wouldmagazines be an appropriate medium to use to advertise the sale? Whatadvertising media would you suggest they use to inform the consumers of theupcoming sale?

Magazines are not generally appropriate for advertising a sale. Whilst magazines offer an

ideal opportunity to use high-quality printing and colour to highlight the merchandise, thenature of a sale is short term and ``newsworthy'' and thus needs a more immediate anddirect medium.Given a large company like Edgars and their access to a substantial advertising budget, theuse of bursts on television would be more effective.Radio holds the same advantage. BothTVand radio can be aired at a time when the targetaudience is viewing or listening. Newspapers which are published on a daily basis can alsobe used to create short-term awareness.Outdoor advertising offers the opportunity for reminder advertising and are seen by manypeople on a daily basis (sometimes for a long time by those stuck in traffic).

DISCUSS THE ADVANTAGES AND SHORTCOMINGS OF MAGAZINES ASDISCUSS THE ADVANTAGES AND SHORTCOMINGS OF MAGAZINES AS ADVERTISING MEDIUMADVERTISING MEDIUM

Strengths of Magazines Audience selectivity (Most selective of all media except for direct mail) Reproduction Quality (Printed on high quality paper stock & uses printing

processes to provide excellent reproduction in black and white or in colour) Creative Flexibility (Offer a variety of special options that can enhance the creative

appeal of an ad & increase attention & readership) Permanence (long life) ( They can be kept for reference and can be read over

several days) Prestige (Co.s buy space in prestigious publications for public image) Services (Some magz have merchandising staff that call on trade intermediaries,

like retailers to let them know of a product being advertised) Consumer receptivity and involvement (magz are purchased cos info it contains

interests the reader)

Limitations/ Shortcomings Costs - (Some magazines can appear to be very expensive in absolute terms) Limited reach and frequency ( The %age of adult reading any mag tends to be

much smaller, so magazines have a thin penetration in households)


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Long lead time (Have 30 to 90 day lead time so ads need to be placed within thistime and needs to be prepared well in advance of the actual publication date)

Clutter and competition for readers attention (The more successful a mag is themore pages of advertising it attracts, which leads to greater clutter)

In the South African retailing environment, there are a number of large and smallretailers. Each one has a different level of ``power'' within their marketingchannel. In the case of the following products, identify where you think thechannel powers lie. Give a brief motivation for your choice.

Floormops sold in Pick n Pay In the case of floormops sold in Pick n Pay, the channel power lies with the retailer. Floormops are an unbranded and simple product; the manufacturers rely on the retailer to stockand sell their products.

Pick n Pay, due to its market position, can offer significant rewards in the form of increasedsales to the manufacturer of the floor mops. The strong financial position of Pick n Pay, incontrast to the companymanufacturing floormops, adds to thepower theyhavein the channel.

Designer label dresses sold in an up-market boutiqueThe demand for designer label dresses is in accordance with the designer's name. In thiscase, the manufacturer or designer will hold a considerable amount of power in themarketing channel. Referentpower in this case is prominent.

A new Mercedes Benz E-classIn the case of a Mercedes Benz E-class, where the car is sold through a number of exclusiveMercedes Benz car dealerships, the dealerships adhere to the rules and guidelines set byMercedes Benz tomarket and sell these cars. In this case, the manufacturer has legitimatepower over the dealerships, aswell as referent power due to the image and status of theMercedes brand name.

MicrosoftWindowsVistaMicrosoft Windows enjoys an extremely strong position within the world market. It is to thebenefit of any retailer that sells computer products to stock Microsoft Windows as one of itsproducts. Microsoft, therefore, has significant channel power; in this case, it is based mainlyon information power and referent power. Should they so wish, they could also exercise asignificant amount of coercive serveand reward power based on their strong position in the market.

YOU HAVE BEEN APPOINTED AS THE MARKETING COMMUNICATION MANAGER ATADCHEK RESEARCH. THE EXECUTIVE MANAGER OF THE COMPANY HAS ASKED YOUTO WRITE A REPORT ON PROMOTING INTEGRATED MARKETING COMMUNICATIONIN THE COMPANY. PROVIDE AN OUTLINE OF YOUR REPORT.

The report will have the following outline:Introduction


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Integrated marketing communicationDefinition ``a planning process designed to ensure that all brand contacts received by a customer orprospect for a product, service, or organization are relevant to that person and consistentover time''. Integrated marketing communication can be defined as a holistic approach to

promote buying and selling in the digital economy. This concept includes many online andoffline marketing channels. In South Africa, online marketing channels include e-marketingcampaigns such as search engine optimisation (SEO), pay-per-click, affiliate, e-mail, bannerand the latest web-related channels for webinar, blog, RSS, podcast and Internet TV.Theretailer Pick n Pay, for example, has a website where the consumer can order groceries andarrange for them to be delivered. Offline marketing channels include traditional print(newspapers, magazines), mail order, public relations, billboards, radio and television. Pickn Pay also makes use of traditional media, such as newspapers and brochures, to advertisetheir products.

Phases of the marketing communication planning processImportance of integrated marketing communicationConclusion

advertising strategy are the following:. Target market identification and positioning . Before advertising, the retailer shouldhave a target market in mind.This will help the retailer to decide the medium (ormedia) touse, who to reach and, if necessary, how often to communicate. Analyse the market inwhich you intend to advertise i.e size of the market, whether its growing or not.Competitors need to be analysed to know their market share & how large their ad budgetsare and how they reach their target markets. Orgs must also analyse its own products incontext with the market being competed in.

. Competitive situation. A retailer should use the different visual forms when advertisinghis or her products, so that the target market can see the benefits of owning the product.. Customer behaviour .The retailer should know his or her target market (who they are,where they stay, their usage behaviour, etc) so as to be able to influence them to buy theproduct.. Budgets. The adverts are paid for. The retailer should put money aside to pay the SABC(TVand radio), the magazine or newspaper or any media where the advert will be placed.. Execution. The message should be appealing to the target market. Retailers can make useof different media for this purpose. (See table12.2 in the prescribed book.)

Steps taken in developing an advertising strategy for their business.Analysing your existing situation

Setting your advertising objectivesThese objectives should clarify the basic message to be delivered to the targetmarket, to what audience it should be delivered and the specific criteria to beused by the org to measure the success of the advertising campaign. Thesenormally include,

intro of a new product to customers


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initiate shopping stimulate the actual purchase of the product remind customers to buy encourage enquiries reinforce a favourable image create brand awareness rectify incorrect perceptions and To persuade uncertain customers to buy a particular product.

Preparing an advertising budgetThis budget determines how much the org has to spend. Has 2 sides

the source side (how much money will be required) & the application side (how the money will be spent).

The company should accommodate for back-up funds which can be used underspecial circumstances such as the intro to the product or unexpected competitionsituations.Sending out a core advertising messageOnce the audience has been decided, and what the audience is looking for, theorg needs to decide on what advertising message will be sent out. It must be

clear , and convincing to its audience. Its not about the advertising messagebut about deciding on the core message that must be understood.Choose the right advertising mediumThe medium must be chosen before the ad is actually created because the copyand layout are directly affected by the medium selected. This is selected by themedia plan, which is a blue print that maps out the best course of action todetermine the ad time needed to reach its audience to achieve final adobjectives.Selecting the ad agencyDue to this being a specialized area, orgs turn to agencies to help them developtheir ad campaigns. The company gives them a brief of the idea and the adcompany creates ideas and brings the whole add together (layout, visuals andcopy)

Steps to applyStrategy execution

Creating the advertising message, which includes the creative concept, writing thecopy, adapting the concept where necessary and producing the ad

Testing the message Launching (or running) the campaign Evaluating and adjusting the strategy Evaluating its effect Making necessary adjustments

THE ROLES AND FUNCTIONS OF SALESPEOPLE(Study page 459 in the prescribed book.)When studying this section, pay attention to the roles and functions of sales people. Theseroles and functions are listed below create new customers

. sell more to present customers . build long-term relationships with customers


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. provide solutions to customers' problems . provide services to customers . help customers re-sell products to their customers

ASSUME YOU ARE A SALESPERSON AT ABC COMPANY. YOU KNOW THAT MR PETERSON, WHO IS A BUYER FOR XYZ COMPANY, IS NOT PLEASED WITH THECURRENT SUPPLIER AND YOU BELIEVE THAT YOUR PRODUCT COULD SAVE XYZCOMPANY THOUSANDS EACH YEAR. YOU SET UP AN APPOINTMENT WITH MR PETERSON, BUT ARE SURPRISED WHEN HE TERMINATES THE APPOINTMENTQUICKLY WITH NO SALE AND NO MENTION OF A FUTURE APPOINTMENT. YOUTELL YOUR SALES MANAGER ABOUT THE INTERVIEW.``MR PETERSON KEPTASKING ME WHERE I WENT TO SCHOOL, WHETHER I WANTED COFFEE AND HOW ILIKED SELLING, WHILE I WAS TRYING TO EXPLAIN TO HIM THE FEATURES,ADVANTAGES AND BENEFITS OF OUR PRODUCT.'' IDENTIFY THE BARRIERS TOCOMMUNICATION AND EXPLAIN HOW YOU WOULDOVERCOME THEM.Mr Peterson was sending you signals that he likes doing business with people he knows. He

is a feeler and he does not want to get down to business immediately. He wanted toestablish a relationship. There was never any true communication established between youand Mr Peterson, which caused you to misread the customer and handle the situationincorrectly.

Figure12.3 D IFFERENT STAGES IN THE SALES PROCESS .THey are as follows:Prospecting for customersIn the sales process, the salesperson begins by prospecting for customers; in other words,the main purpose of a salesperson is not to make a sale, but rather to identify and/orsource customers.

Qualifying prospectsOne of the most important keys to success in personal selling is the ability to qualifyprospects. Qualifying is the process of identifying prospects (customers) who should becontacted.Developing relationshipsIt is important for salespeople to develop long-term relationships with their customers. Arequirement for this is interpersonal skills.Presenting the sales messageThe presentation combines elements of the relationship, product and customer. Presentationis a well-conceived pla nwhich includes

establishing objectives for the sales presentation

developing the pre-sales presentation plan needed to meet the objectives renewing one's commitment to providing outstanding customer service

Handing queries and complaintsMost customers at some time in the sales relationship will have reason not to agree with asalesperson's proposal. Being able to respond effectively to a customer's queries and/orcomplaints is an essential sales skill. It requires knowledge, skill and a positive attitude of wanting to solve the customer's problem.Closing the sale


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Closing the sale is the most important part of the sales process. In many selling situations,the sales person needs to obtain a commitment from the customer. Some closing methodscan move customers from indecision to commitment.Providing service and support Customer service encompasses all the activities which enhance or facilitate the sale and theuse of one's product or service. The skills required to bring about a sale are different from

those required prior to the sale. A high-performance salesperson does not abdicateresponsibility for delivery, installation, warranty interpretation or other customer serviceresponsibilities. The salesperson continues to strengthen the partnership with suggestions,follow-through on promises and follow-up on activities.Maintaining trust and commitment When customers buy goods and services, they focus on the satisfaction they will gain afterthey make the purchase. In selling, showing a commitment to the customer must be seenas part of the process of satisfying the customer's needs, for example, making delivery on time, providing installationwhen necessary and training customers how to use the product. The salesperson must behonest and reliable when dealing with the customers.

SALE PROMOTION TYPES OF PROMOTION ACTIVITIES WHICH CAN BE UNDERTAKENBY MARKETERS IN DEVELOPING THEIR SALES PROMOTION STRATEGIES.

Consumer promotion can entail product-based incentives such as samples, free trials and tie-in promotions. Money-based promotions can include the use of coupons, price cuts and

premiums. Prize-related promotions relate to a situation where a customer enters a

competition and using text messaging, for example, sends the bar code of theproduct to the manufacturer.

Trade promotions can include the use of buying allowances, buy-back offers, price-off offers, display allowances and free goods.

Business and sales force promotions may include trade shows and contests forsalespeople.

Incentive-type promotions are usually used to attract brand switchers, appeal tonew customers, increase the usage of the product, reward loyal customers, increasestore traffic and enlarge the order of occasional users.

YOU ARE THE MARKETING MANAGER OF A LEADING SOFT DRINK COMPANYCALLED COCA-COLA BEVERAGES. DISCUSS THE VARIOUS SALES PROMOTIONTOOLS YOU WOULD CONSIDER USING TO TARGET INTERMEDIARIES.

Trade promotions and allowances.This sales promotion tool will be used if the resellers of the Coca-Cola products are prepared

to perform a number of important marketing activities in support of your brands. If, forexample, a reseller provides you with a shop or shelf space to put up your point-of-purchase(POP) displays and materials, you could offer them free fridges to keep the soft drinks cold.If, for example, they buy large quantities of the Coca-Cola brand, you could offer them aprice reduction or provide them with one free case of soft drinks for every fifteen bought atthe regular price.

Trade shows and exhibitions .


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This sales promotion technique will be used to get your existing resellers to display yourbrands (Coca-Cola and related lines) in their stalls when they exhibit at various tradeshows. In return, you could provide them with all the supporting material they want andeven pay some of the exhibition cost they have incurred. You could also participate activelyin the trade shows and exhibitions to help source new dealers and distributors.

CONSIDER YOUR OWN EXPOSURE TO E-MAIL MARKETING AND ALSO TALK TOFRIENDS AND FAMILY MEMBERS ABOUT THEIR EXPERIENCES WITH E-MAILMARKETING MESSAGES.WHAT DO YOU SEE AS THE FIVE MOST IMPORTANTADVANTAGES OF E- MAIL MARKETING?

Ease of use . Most users in business are already familiar with e-mail, which involveslittle more than typing a short message to someone and perhaps adding anattachment to the e-mail.

Lowcost . E-mail is considered to be the cheapest form of communication availabletoday. It can be sent overseas at local call rates, be sent after hours or sent in batchformat.

Permission marketing . This means getting the target recipient's permission before

sending him or her an e-mail; such individuals then represent highly desirableprospects. E-mails generated on an event basis. This means that some event (eg an

overdue account) triggers the sending of an e-mail. Large amounts of information may be sent as an attachment to the e-mail. Valuable information . E-mails can provide customers with information that has

value for them, such as account statements or a newsletter. Auto responses to queries. Standardised information can be provided to

customers by means of auto response, which will save the organization valuable timeand money.

QUESTION : CYBER MARKETING AND ITS ADVANTAGES

Internet World Wide Web Cyber-marketing Virtual environment Online


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Disintermediation and re-intermediation Permission marketing One-to-one marketing Mass customisation

ADVANTAGES Target marketing - (targets very specific groups) Message tailoring - (a message is designed to appeal to the specific wants of the

target audience) interactive capabilities - (increasing customer involvement) information access (an information source) sales potential (an increase in sales) creativity (creatively designed sites can enhance an organisation's image) exposure (an organisation can gain national and international exposure) speed (information on an organisation's products is obtained most quickly via the

Internet)

Disadvantages measurement problems - (unreliable research numbers) audience characteristics - (audience characteristics change quickly) websnarl - (downloading information from the Internet may take a long time) clutter - (a number of ads may irritate customers) potential for deception - (hackers and credit card theft) costs - (the costs of doing business on the Internet are increasing) poor reach - (the reach of the Internet is still far behind that of television)

THERE ARE FIVE DIFFERENT TYPES OF ONLINE USERS: Directed information seekers. They know exactly what they are looking for. Undirected information seekers. These buyers are just browsing through the site. Directed buyers.They knowexactly what to buy and what they want to pay for it. Bargain hunters.These are the users who are looking for a ``good deal''. Entertainment seekers.They want to enjoy their time online.


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Another perspective focuses on the online consumer's psychographic make-up, which is alsoreferred to as ``psycho-segmentation''. This perspective identifies a number of onlineusers:

Techno-lusters.These users focus on culture and technology. Academic buffs.These users originally formed the largest groups of users; they are

now less significant users. Techno-boffins.This group is similar to the techno-lusters, but they make more direct

use of the technology for business purposes. Get-aheads. They use the Internet as a lifestyle accessory, that is, they use e-mail

and the Internet for product selection. Hobbyists. These are people with specialist interests, such as golfers, fishermen and

car enthusiasts, who use the Internet for purchase selection. Knowledge traders. These are business-oriented users who use the Internet for news

services and information on best business practice. Business bods.These users are general business users in management or

procurement roles. Home users. These are generally members of families looking for education,

entertainment or purchases.

The online marketer must understand how the online customer differs from the traditional``real-world'' customer and adapt the marketing mix accordingly.

39644961 promotion management notes 2009

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