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31
Price can be changed quickly to respond to changes in demand
and to competitors’ actions. Price has a psychological impact on cus-
tomers, and marketers can therefore use it symbolically. If Coach House
suddenly dropped the price of its purses to $19.95 and began making
them available in most discount stores, consumers’ image of Coach
House would change radically. This example illustrates the psychologi-
cal impact that price can have on consumers. By raising price, an or-
ganization can emphasize a product’s quality and try to increase the
status associated with owning it. By lowering price, an organization can
imply the existence of a bargain and attract customers who go out of
their way to save a small amount.
Distribution. Distribution is making products available in the
quantities desired to as many customers as possible while holding total
inventory, transportation, and storage costs as low as possible. Mid-
dlemen, usually wholesalers and retailers, perform many of the activi-
ties required to move products efficiently from producers to consumers
or industrial buyers. These activities involve transporting, warehousing,
materials handling, and inventory control, as well as packaging and
communication.
Critics who suggest that eliminating wholesalers and other mid-
dlemen would lower prices for consumers do not recognize that elimi-
nating middlemen would not do away with the need for their services.
Other institutions would have to perform those services, and consumers
would still have to pay for them. In addition, in the absence of whole-
salers, all producers would have to deal directly with retailers or cus-
tomers, keeping voluminous records and hiring people to deal with cus-
tomers.
Promotion. Promotion is a persuasive form of communication
that attempts to facilitate a marketing exchange by influencing indi-
viduals, groups, or organizations to accept an organization’s products.
Promotion includes personal selling, advertising, publicity, and sales
promotion.
Advertising – probably the most visible component of promotion –
is any paid form of non-personal communication transmitted through a
mass medium, such as television or newspapers. Personal selling, in
contrast, is direct, personal communication with customers and poten-
tial customers.
32
Advertising may inform potential customers about various
products, but by itself it is not sufficient to move many products in to-
day’s competitive marketplace. Buyers want to examine the product and
any supporting materials, they want information, and they want a sales-
person to answer their questions. Of course, personal selling is not the
most important promotional variable for all products. The target market
for toothpaste, for example, is much too large and inaccessible to rely
on personal selling. Establishing personal contact with all users of
toothpaste would not be cost-effective; advertising is more appropriate
for that type of product.
Publicity is non-personal communication presented as a news
story and transmitted through a mass medium. The difference between
publicity and advertising lies in cost and form. A firm does not pay the
media for providing publicity; the firm is not identified as the originator
of the story. For example, when Coca-Cola Company donated 20,000
cases of Coca-Cola to American troops serving in the Persian Gulf War,
it received publicity in the form of stories on Cable News Network
(CNN) and in newspapers about the gesture.
Sales promotion is activities (such as demonstrations, sweep-
stakes, and contests) and materials (such as free samples, displays, and
coupons) that persuade customers to make purchases. Sales promotion
acts as a direct inducement, offering added value or some other incen-
tive to resellers, salespersons, or consumers.
The aim of promotion is to communicate directly or indirectly
with individuals, groups, and organizations to facilitate exchanges.
When marketers use advertising, personal selling, publicity, and sales
promotion, they must effectively manage their promotional resources
and understand product and target market characteristics to ensure that
these promotional activities contribute to the firms’ objectives.
A major component of the marketing concept is that a firm
should create a marketing strategy that satisfies its customers. Carrying
out the marketing concept is impossible unless marketers know what,
where, when, and how consumers buy; understanding the factors that
influence buyer behavior helps marketers develop effective marketing
strategies. Buyer behavior is the decision processes and actions of peo-
ple who purchase and use products. It includes the behavior of both
consumers purchasing products for personal or household use and or-
Price can be changed quickly to respond to changes in demand Advertising may inform potential customers about various and to competitors’ actions. Price has a psychological impact on cus- products, but by itself it is not sufficient to move many products in to- tomers, and marketers can therefore use it symbolically. If Coach House day’s competitive marketplace. Buyers want to examine the product and suddenly dropped the price of its purses to $19.95 and began making any supporting materials, they want information, and they want a sales- them available in most discount stores, consumers’ image of Coach person to answer their questions. Of course, personal selling is not the House would change radically. This example illustrates the psychologi- most important promotional variable for all products. The target market cal impact that price can have on consumers. By raising price, an or- for toothpaste, for example, is much too large and inaccessible to rely ganization can emphasize a product’s quality and try to increase the on personal selling. Establishing personal contact with all users of status associated with owning it. By lowering price, an organization can toothpaste would not be cost-effective; advertising is more appropriate imply the existence of a bargain and attract customers who go out of for that type of product. their way to save a small amount. Publicity is non-personal communication presented as a news Distribution. Distribution is making products available in the story and transmitted through a mass medium. The difference between quantities desired to as many customers as possible while holding total publicity and advertising lies in cost and form. A firm does not pay the inventory, transportation, and storage costs as low as possible. Mid- media for providing publicity; the firm is not identified as the originator dlemen, usually wholesalers and retailers, perform many of the activi- of the story. For example, when Coca-Cola Company donated 20,000 ties required to move products efficiently from producers to consumers cases of Coca-Cola to American troops serving in the Persian Gulf War, or industrial buyers. These activities involve transporting, warehousing, it received publicity in the form of stories on Cable News Network materials handling, and inventory control, as well as packaging and (CNN) and in newspapers about the gesture. communication. Sales promotion is activities (such as demonstrations, sweep- Critics who suggest that eliminating wholesalers and other mid- stakes, and contests) and materials (such as free samples, displays, and dlemen would lower prices for consumers do not recognize that elimi- coupons) that persuade customers to make purchases. Sales promotion nating middlemen would not do away with the need for their services. acts as a direct inducement, offering added value or some other incen- Other institutions would have to perform those services, and consumers tive to resellers, salespersons, or consumers. would still have to pay for them. In addition, in the absence of whole- The aim of promotion is to communicate directly or indirectly salers, all producers would have to deal directly with retailers or cus- with individuals, groups, and organizations to facilitate exchanges. tomers, keeping voluminous records and hiring people to deal with cus- When marketers use advertising, personal selling, publicity, and sales tomers. promotion, they must effectively manage their promotional resources Promotion. Promotion is a persuasive form of communication and understand product and target market characteristics to ensure that that attempts to facilitate a marketing exchange by influencing indi- these promotional activities contribute to the firms’ objectives. viduals, groups, or organizations to accept an organization’s products. A major component of the marketing concept is that a firm Promotion includes personal selling, advertising, publicity, and sales should create a marketing strategy that satisfies its customers. Carrying promotion. out the marketing concept is impossible unless marketers know what, Advertising – probably the most visible component of promotion – where, when, and how consumers buy; understanding the factors that is any paid form of non-personal communication transmitted through a influence buyer behavior helps marketers develop effective marketing mass medium, such as television or newspapers. Personal selling, in strategies. Buyer behavior is the decision processes and actions of peo- contrast, is direct, personal communication with customers and poten- ple who purchase and use products. It includes the behavior of both tial customers. consumers purchasing products for personal or household use and or- 31 32
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