Chapter 12, 14 and 17

Chapter 12
2.1 What kind of marketing channel functions can be performed over the internet? Why do you think so?

The direct channel is synonymous with the internet. The direct channel has a market from stocks and bonds, to the home shopping network to even the farmers’ market. There are limits to the direct method. For example, not every item fits in this channel. Cars require a much different channel, and, on the other end of the scale, so does chewing gum. Products and services that can avoid intermediaries are prime targets for the direct channel.

3.1 Describe the most likely marketing channel structure for each of these consumer products: candy bars, Tupperware products, nonfiction books, new automobiles, farmers’ market produce, and stereo equipment. Now construct alternative channels for these same products.

Candy bars are widely available, inexpensive, frequently purchased and not complex. A wholesaler channel is most likely used if a big order is needed. A direct channel could be used. Tupperware uses an agent/broker for a consumer channel focus. The role of the intermediaries fits here too. Nonfiction books may go from the producer to a retailer channel and then finally into the consumer’s hand. An alternative for books may be print on demand books, where the direct method would be used. Automobiles are complex, require service and are pricey. The car industry uses a retail channel that is producer (manufacturer) to dealer (retailer) to the consumer. An alternate method for cars could be the direct channel. I would use a Scion brand and the internet for a new way of sales. Again, the farmers’ market is a direct action. If a farmer were to use a grocery store, he would use the retail channel. Car stereos use a retailer channel and possibly a wholesaler involvement could be used as an alternative.

Chapter 14

3.1 Why is understanding the target market a crucial aspect of the communication process?
• So prospective customers can reach your product, such as Subway
• Awareness/promotional campaigns
• So that an appropriate message is used
• New methods in marketing communication are occurring , such as blogging which is very personal minded

4.1 Why might a marketing manager choose to promote his or her product using persuasion? Give some current examples of persuasive promotion.

Persuasive promotion is associated with the growth stage of a product, and the public is familiar with what the product or service can do. Persuasive marketing pushes the ‘real’ product advantages, and often encourages the consumer to switch brands. To answer the question, I went with a relatively new beer called Miller Chill and visited MillerCoors Beer.com. I found this quote: “So well received by consumers that it alone accounted for more volume than the next 14 biggest new beer brands of 2007 combined.” I found the statement’s message was that the new beer belongs, it is well received and appeals to good taste and the ego.

5.1 Discuss the AIDA concept. How do these different stages of consumer involvement affect the promotional mix?

First off, to define AIDA is ‘attention, interest, desire, and action’ that corresponds to consumer involvement and stages of a product. A good example of how AIDA can affect the promotional mix is being able to reach a customer with a message. Personal selling has a limited audience, whereas drawing upon a big advertising campaign- attention - information stage- would make the potential outcome of a sale easier.

An example of the desire stage would be a new product in a grocery store. Coupons often are used to encourage shoppers to purchase a new cleaning product.

To keep customers coming back (the action stage), airlines use frequent flier programs. Grocery stores use member discount cards.

5.2 How does a Web site’s ease of use affect its ability to create attention, interest, desire, and action? Visit the kitchen and bath pages of Kohler’s web site and determine how successful the company is at moving consumers through the AIDA process.

The “Bold Look of Kohler” creates attention and interest from modern looking sinks bathrooms and kitchens. The site switches from modern bathroom sinks, to kitchen sinks in a colorful manner. One only has to view the site to start the desire for Kohler products, especially when compared with one’s own bathroom or kitchen. Kohler’s site features two action areas to purchase called the ‘online store’ and a link ‘where to buy’.

Chapter 17

2.1 Give an example of each major type of pricing objective.

Of course, price is what is exchanged for goods or services. The object of market share is based on the dollar or unit sales. An example is a big leader in the market often uses unit sales. On the other hand, small players in the market tend to shoot for largest revenue share.

3.1 Explain the role of supply and demand in determining price.

I found demand is the price and time factored over the amount sold. The traditional supply and demand is based on price. The more units one has that are not selling in a given time, the price will usually go down. Shortages of products tend to put pressure on prices to increase.


3.2 If a firm can increase its total revenue by raising its price, shouldn’t it do so?

Sure, if you plan on growing in business. However, there is a balance point where consumers may not elect to purchase one’s product, especially if the demand is relatively elastic.

3.3 Explain the concepts of elastic and inelastic demand. Why should managers understand these concepts?

Elastic prices are associated with consumers being very careful or mindful of prices. An example is when a price goes down, while revenues go up for a company.
Inelastic demand is when a product’s price goes down and so does the revenue. That is, it doesn’t bounce back.
Now, for managers, this becomes a balance point between products and price. If a manager doesn’t price an item right and there is a lot of competition in the market, a customer can choose a similar product from the competition, especially if there is a lot of availability of substitutes. If prices are low, so low that the cost doesn’t even matter in the equation, elastic or inelastic pricing has no effect. Inflation factors into price. For example, in a country where there is decreasing inflation (prices going down), demand becomes inelastic, and shoppers are less price sensitive. However, the opposite can be true.

From my personal experience, I found the example of the yield management system (in the text) at my past airline employer is not full proof. The Minneapolis hometown airline hasn’t made a noticeable profit in eight years.