Marketing. Textbook
.pdfpurchase within the 60-day period. This program was not effective enough, so the telephone sales team was allowed to apply an additional $ 50 discount to convince the customer to “buy now.” This strategy brought good results.
The problem was that some interested parties would often show up at the mall with a $ 100 off coupon, knowing there was an additional $ 50 off when ordering by phone. This made sales in malls difficult: convincing customers to make a purchase on the spot with only a $ 100 discount was almost impossible.
This problem has been carefully studied, as a result of which sales managers have come to the conclusion, in particular, that teams working in shopping centers should always offer the lowest, best price, i.e. their price should be the lowest of all three. The question was how to achieve this [8, p. 289].
Questions:
1.Do you think the company’s decision to sell directly was correct?
2.Under what conditions is price discrimination effective?
3.What, from your point of view, can be done to resolve the conflict between different distribution channels in this case?
3.Selecting types and methods of advertising distribution
Situation 1. As a result of the introduced in the mid-1980s, Irish government taxation, which brought in at least 50 % of the price of each car sold, caused a sharp decline in car sales on the Irish market. By this time, the country’s market was saturated with various models and modifications of cars adapted to its requirements. The advertising campaign to promote Lada cars carried out until 1987 did not create a favorable opinion of them as a competitive, cheap and convenient way of transportation.
Thus, unfavorable conditions developed for the entry of a new Soviet car into the Irish market.
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I. Activities carried out:
1.The rights to sell Lada cars in Ireland have been transferred to SATRA (Soviet American Trade Association).
2.A new distribution network has been created in the country.
3.The advertising firm Hill and Knowlton Dublin has been selected to develop and implement a new advertising campaign.
II. New directions of advertising campaign. Hill and Knowlton Dublin saw high taxation not as an obstacle, but as an ally, since the tax should stimulate increased demand for low-cost cars, which are Lada cars. In this same situation, price has become a deciding factor more than ever for many Irish families.
III. The concept of working in the market. The main attention should be paid to advertising the advantages of Lada cars (durability, reliability, low price) and changing the negative attitude towards them on the part of the local market.
IV. Purpose of the advertising campaign. Creating an atmosphere of trust in cars from Russia that meet the requirements of the Irish market. Creating the image of the Lada as a reliable and durable car, as an ideal purchase for urban and rural residents.
V. Main opinions about Lada cars as the most economical cars in all respects available on the Irish market:
- maximum dissemination of information confirming the durability, reliability of cars and the wise use of money in the case of purchasing a car of this particular brand;
- ensuring the availability of complete information on the market about all representatives of the Lada family;
- highlighting the success of Lada in the UK and in other countries, such as Denmark, where the tax system is similar to the Irish one;
- focusing on high-quality after-sales service for cars; - maximum use of the media.
VI. Target groups of advertising impact:
1.Rural and urban buyers with low income levels.
2.Rural car enthusiasts in need of a durable and reliable car.
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3.Car owners intending to purchase a second car for their family.
4.Buyers who expect to purchase only a used car.
VII. Demand generation and sales promotion tools used by Hill and Knowlton Dublin:
1.Mass media: national press organs, provincial (local) press; specialized (professional) press organs for motorists; sections for car enthusiasts in general press organs; business press; radio broadcasts for business people and car enthusiasts; TV.
2.Sales promotion activities:
-business lunches for representatives of press bodies of a general and special (automotive) nature;
-monitoring the condition of cars used by individual journalists in order to offer them a car of the Lada family;
-organizing trips for leading journalists to the UK to the parent company LADA CARS, which is engaged in the conversion of Lada in accordance with the requirements of the Irish market;
-participation in sponsorship activities in organizing various prestigious events on a local and national scale (sponsorship activities are of great importance in relation to individual local sports clubs that have numerous fans in Ireland. Such patronage indicated an interest not only in their business, but also in the sporting problems of the country);
-organizing acquaintance between the management of the company LADA CARS, which sells cars, and famous political figures of the country;
-organizing special interviews for leading press organs.
VIII. Results of the campaign.
By the end of 1987, 1,200 cars had been sold (350 cars were expected to be sold).
Situation 2. From the entire range of products of the Russian tire industry, the most promising product for export was identified — tires for trucks and buses. These tires have been successfully tested in hot climates in the Middle East and Africa. The Ethiopian market was chosen for advertising deployment, which is the most promising country compared to
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other developing countries in Africa due to the great need for tires, since the main mode of transport in the country is automobile.
The purchase of tires in Ethiopia is carried out by the drivers themselves, who are overwhelmingly illiterate.
The main goal of the advertising campaign is to increase the export of Russian tires to Ethiopia and maintain existing demand.
Events held:
1.The company T.R.I.A. is designated as the commercial agent of the Russian tire exporter in Ethiopia.
2.Agency agreement with the company T.R.I.A. provided for regular advertising in Ethiopia. In addition, an agreement was concluded with the advertising company E.A.D.A [8, p. 126].
Questions:
1.Analyze the main directions of the advertising campaign of the company Hill and Knowlton Dublin. Which one do you think is the most effective? Explain why.
2.How were Lada cars positioned on the Irish market?
3.Describe SATRA's target segments.
4.Suggest ways and types of distribution of domestic tires on the Ethiopian market, taking into account the following target groups: drivers — car owners; hired drivers.
4.Preparation of information for an advertising campaign
A company producing cars (bicycles, vacuum cleaners, sewing machines, household refrigerators) contacted an advertising agency with an order to conduct an advertising campaign in a foreign market (Eastern and Western Europe, USA, North Africa).
In order to obtain the information necessary to organize an effective advertising campaign, the advertising agency conducts a survey of the company using a questionnaire.
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Questionnaire:
1. Official details:
- full name and address of the company producing the product; - contact means of communication.
2. Main goals of the upcoming advertising campaign:
- commercial advertising to directly increase sales of advertised products;
- public relations campaign to raise the prestige of the product and (or) manufacturer;
- another goal.
3. Full name of the advertised product.
4. Product scope:
-optimal use of products;
-unique application;
-potential application.
5.Basic functional properties of the advertised products.
6.Main technical and economic properties of the advertised products:
- physical principle of operation;
- performance, power, speed and other technical parameters; - weight, dimensions, shape;
- features of operation;
- energy intensity, operating efficiency, payback period; - reliability, service life;
- environmental features of the technology; - safety of production and operation.
7.Unique properties of the advertised products.
8.Analogs of advertised products.
9.Advantages of the advertised products over domestic and (or) foreign analogues.
10.Disadvantages of the advertised products in comparison with domestic and (or) foreign analogues.
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11.Economic (or other) positive effect received by the consumer from the use of the advertised product.
12.Cost of products (wholesale, retail), types of discounts and
benefits.
13.Patent protection of advertised products:
-copyright certificates for inventions;
-patenting abroad;
-industrial design certificates;
-protection of corporate identity elements.
14.Possibility of open publication of received information in advertising messages.
15.Illustrative materials for advertised products.
16.Results of marketing research of the manufacturing company.
17.List of “prestigious” consumers. Their reviews of the advertised
products.
18.Real and maximum sales volumes of advertised products.
19.List of potential consumers of advertised products.
20.Available elements of the corporate identity of the company that produces the advertised product.
21.If there are no corporate style elements, does the customer company need to develop them (as part of the preparation of advertising campaigns).
22.Export of advertised products:
-real volume and direction;
-potential volume and direction.
23.Export name of the advertised product.
24.Participation of the manufacturing company in charitable activities.
25.List of existing advertising materials and carried out promotional
events.
26.Estimated advertising budget.
27.The desired degree of direct participation of the manufacturer of the advertised product in the proposed advertising activity.
28.Desirable timing of an advertising campaign [8, p. 297].
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Exercise.
A group of students is divided into two teams. Each team develops information for an advertising agency. Then one of the teams provides its information to the other team, which now has to act as an advertising agency, and vice versa.
Each team must:
1)select a product and market (from those proposed above);
2)select from the questionnaire those positions that, in her opinion, correspond to the selected task, and provide information to the agency;
3)using the information provided, select a means of advertising distribution, type of advertising and develop its content;
4)evaluate the agency’s work and the degree of completeness of the information provided to it by the advertiser.
6.2.EXERCISES
1.Prepare your own direct mail copy for initial and repeat mailings. What mistakes did you make when preparing the text of the letter?
2.Develop a direct marketing plan for sales (selection). Give examples of direct marketing on the Internet.
3.Consider traditional and non-traditional public relations methods. Describe the advantages and disadvantages of each. Give examples of the application of these methods and the use of public relations events in the areas of trade and service provision.
4.You work as the head of a department that is developing a system of effective communications in the company. At the meeting of directors, a decision was made to produce and launch a new product on the market — ultra-durable, comfortable and lightweight sneakers for sports. The product is aimed at young people who spend a fairly large part of the day in sports training. Develop an effective communications system to promote this product on the market.
5.The marketing manager was tasked with finding clients for dry cleaning. Without thinking twice, he decided to use the phone and email,
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choosing the first phone numbers and email addresses he came across for communications. In response to telephone calls, a number of his interlocutors expressed everything they thought about this matter.
Individual responses via email were no less “pleasant.” Why did the manager receive such answers? How do you think he should act in the future?
6.Choose any one product (for example, a cell phone or a candy bar) and develop three types of advertising for it: informational, persuasive, reminder (the concept of “develop advertising” includes an advertising idea, an advertising appeal, advertising means, measures to evaluate the effectiveness of advertising).
7.As you know, to create slogans, a popular method is used, according to which the copywriter selects a well-known phrase (saying, proverb, idiom) and then one or another attribute of the advertised product or enterprise (name, image, logo) and these two elements “combine” into a single phrase. For example, this principle was used to formulate the slogan for the corporate website of the fast food chain. This is the slogan “What Russian doesn’t like fast food?” Using the above approach, formulate several slogans.
6.3.CONTROL QUESTIONS
1.What are the similarities and differences between advertising communications and sales promotion activities?
2.What are the goals and objectives of sales promotion?
3.Define direct marketing. What are the pros and cons of direct marketing?
4.What is the difference between direct marketing, interactive marketing and maxi marketing?
5.Name the main goals and functions of public relations.
6.Name the criteria for choosing advertising media.
7.What is meant by effective advertising?
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TOPIC 7. MARKETING MANAGEMENT
7.1.SITUATIONAL TASKS
1.Effective marketing is the key to a company’s market success
The Automarket company provides services to car owners, offering a full range of braking, electrical and fuel systems for all types of ground transport. In addition, the company offers parts supply and services to engine and vehicle manufacturers based on its original technology. Along with direct personal work with end consumers, the company has a network of distributors, and also sells its products through wholesale and retail organizations.
The company's principle is to offer customers of the selected market quality products and services at a competitive price.
“Avtomarket” has its own branded service network, as well as independent dealers. The company is English, but it has production and repair offices in France, Germany, Portugal and Spain. Its sales centers are located in more than ten countries, including the USA, Japan, and South America. The company also operates through independent distributors in more than one hundred countries around the world. It has approximately four thousand sales centers.
In its business strategy, the company considers supplying a wide range of high-quality products for all types of vehicles to be key. The company is proud of its technological excellence and strives to maintain its reputation as a leader in the development and practical use of a number of innovations, such as fuel injection systems, wheel locking during braking, and automatic information systems. During the economic recession in the early 1980s, Avtomarket’s expenses for innovation and research and development were reduced. This provided the company with a significant lead over its competitors in both technology and design. Deterioration of economic conditions in the early 1990s did not affect the company’s
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innovative activities, which allowed it to take a leading position in the markets of many countries around the world.
The main goal in the service market is to ensure the quality of services provided by Automarket.
In its policy to maintain a leading position in the market, the company emphasizes the importance of having qualified personnel.
Despite the constant attention to the quality of goods and services, technological innovations, in the past the company’s name was associated with low quality. These difficulties occurred during a period of deteriorating conditions in the English automobile market in the 1960s and 1970s. In 1984, the company adopted a strategic program to achieve high competitiveness. The adoption of the program was preceded by in-depth marketing research.
Managers were given a task: either to achieve superiority over competitors in the domestic and foreign markets, or to face the need to close factories and curtail business.
The plant for the production of brake systems was the first to achieve success: abandoning traditional assembly lines and heavy manual labor in individual areas, over the last five years it has turned into a fully automated complex. Improved management led to an improvement in the moral climate, a decrease in absenteeism, and a favorable attitude towards the company’s management.
In order to motivate the team, quality circles were organized and quality improvement programs were developed under the motto
“integrated quality management.”
By the beginning of the 1990s, the company achieved notable financial success and considered its main task to gain a foothold in the markets for spare parts and parts for automobiles. The peculiarity of this market is that end users of cars are not considered as clients of the company. The company’s distribution channels must satisfy the needs primarily of repair shops, garages and other similar consumers. The final choice of the supplier of this product, as a rule, occurs at the level of specialists in the assembly and repair of machines. Car owners are
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