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*Chapter Sixteen

Using Effective

Promotions

Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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*Promotion and the Promotion Mix

• Promotion Mix -- The combination of promotional tools an organization uses; the traditional mix includes:

PROMOTION in an ORGANIZATION

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*Promotion and the Promotion Mix

• Integrated Marketing Communication (IMC) -- Combines the promotional tools into one comprehensive strategy. IMC is used to:

- Create a positive brand image.

- Meet the needs of consumers.

- Meet the strategic marketing and promotional goals of the firm.

INTEGRATED MARKETING COMMUNICATION (IMC)

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*Promotion and the Promotion Mix

1. Identify a target market

2. Define objectives

3. Determine a promotional budget

4. Develop a unifying message

5. Implement the plan

6. Evaluate the plan

STEPS in a PROMOTIONAL CAMPAIGN

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1. Plan: What should your mailing accomplish?

2. Get the Right List: The better the list, the better your chance of success.

DEAR MR. POSTMAN…Steps in Launching a Direct-Mail Campaign

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Promotion and the Promotion Mix

3. Stand Out: Make your ad like no other.

4. Get Help: Contact a marketing firm with direct mail experience.

5. Follow Up: One mailing is not enough.

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*Advertising: Informing, Persuading and Reminding

• Advertising -- Paid, non-personal communication through various media by organizations and individuals who are in some way indentified in the message.

• Major goals of advertising:

- Inform

- Persuade

- Remind

ADVERTISING in the FIRM

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*Advertising: Informing, Persuading and Reminding

• Total advertising expenditures exceed $294 billion yearly.

• Consumers benefit because production costs of TV programs, radio programs, newspapers and magazines are paid for by advertisers.

• Marketers choose ad media that will reach the target market.

IMPACT of ADVERTISING

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*MAJOR CATEGORIES of

ADVERTISINGLG2

Advertising: Informing, Persuading and Reminding

Category What it is

Retail From retail stores to consumers

Trade From manufacturers to wholesalers and retailers

B2B From manufacturers to other manufacturers

Institutional Creates a desirable image for an organization

Product Creates a desirable image for a product or service

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*MAJOR CATEGORIES of

ADVERTISING(Continued) LG2

Advertising: Informing, Persuading and Reminding

Category What it is

Advocacy Supports a particular view of an issue

Comparative Compares competing products

InteractiveCustomer-oriented ads that allows customers to

choose information to receive

Online Computer ads featured on different sites

Mobile Ads that reach consumers on cell phones

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*Advertising: Informing, Persuading and Reminding

ADVERTISING EXPENDITURE by MEDIA in $ MILLIONS

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Rank MediaProjected 2008 Spending

% of Total Ad Spending

1 Direct Mail $63,732 21.6

2 Broadcast TV 48,300 16.4

3 Newspaper 42,147 14.3

4 Cable TV 21,718 7.4

5 Radio 18,635 6.3

6 Yellow Pages 14,705 5.0

7 Consumer Magazine 14,106 4.8

8 Internet 12,722 4.3

Other 58,311 19.8

Total 294,376 100.016-10

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*Television Advertising

• TV advertising is still the dominant media.

• Digital Video Recorders (DVRs) challenge TV advertising because viewers can skip them.

• Product Placement -- Advertisers pay to put their products into TV shows and movies where the audience will see them.

POPULAR ADVERTISING MEDIA

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*Infomercials and Online Advertising

• Infomercial -- A full length TV program devoted exclusively to promote a particular product.

• Online ads are attempts to get potential customers to a website to learn about a product.

INFOMERCIALS and ONLINE ADVERTISING

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• Interactive Promotion -- Allows marketers to open a dialogue between buyers and sellers and let them work together to create a beneficial exchange.

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*Global Advertising

• Requires marketers to develop a single product and promotional strategy to implement worldwide.

• Problems can arise in global markets with using one advertising campaign in all countries - especially bad translations.

GLOBAL ADVERTISING

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*Personal Selling: Providing Personal Attention

• Personal Selling -- The face-to-face presentation and promotion of a product, including the salesperson’s search for new prospects and follow-up service.

PERSONAL SELLING

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• Salespeople need to listen to customer needs, help reach a solution and do everything possible to make the transaction as simple as possible.

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*Steps in the Selling Process

• Prospecting -- Researching potential buyers and choosing those most likely to buy.

PROSPECTING and QUALIFYING in B2B SELLING

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• Qualifying -- Making sure customers have a need for a product, the authority to buy and the willingness to listen to a sales message.

• Prospect -- A customer who meets the qualifying criteria.

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*Steps in the Selling Process

1. Pre-approach

2. Approach

3. Make a presentation

4. Answer objections

5. Close the sale• Trial Close -- A statement or question that

moves the process toward the purchase.

6. Follow up

STEPS in the B2B SELLING PROCESS

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• Know your competition

• Understand your customer’s business

• Differentiate your product or service

• Sell to the people most likely to buy

• Build relationships

• Put the right people in the right selling spots

BUY THIS!Successful Selling Strategies

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Steps in the Selling Process

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• Not feeling the customer’s pain

• Making money is the only goal

• Seeing sales as just a job

• Getting upset during the presentation

• Failing to properly prepare or over-preparing

• Not being yourself

• Neglecting the relationship

WHOOPS!Sales Slip-Ups

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Steps in the Selling Process

Source: Fortune Magazine.16-18

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*Public Relations: Building Relationships

• Public Relations (PR) -- Evaluates public attitudes, changes policies and procedures in response to the public, and executes a program of action and information to earn public understanding and acceptance.

• 3 steps of a good PR program:

1. Listen to the public

2. Change policies and procedures

3. Inform people you’re responsive to their needs

USING PUBLIC RELATIONS in PROMOTION

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*Publicity: The Talking Arm of PR

• Publicity -- Any information about an individual, product or organization that’s distributed to the public through the media and is not paid for or controlled by the seller.

• Advantages of Publicity:

• Free

• Reaches people who would not look at an advertisement

• More believable than advertising

PUBLICITY

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*Publicity: The Talking Arm of PR

• No control over whether the media will use a story or when they may release it.

• It can be good or bad.

• Once a story has been run, it isn’t likely to run again.

DISADVANTAGES of PUBLICITY

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• Sales Promotion -- The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities.

SALES PROMOTIONS

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Sales Promotion: Giving Buyers Incentives

• Categories of Sales Promotions:

1. B2B Sales Promotions

2. Consumer Sales Promotions

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• Coupons

• Demonstrations

• Sampling

• Sweepstakes

• In-store Displays

• Contests

SOME KEY CONSUMER PROMOTIONS

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Sales Promotion: Giving Buyers Incentives

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*Word of Mouth and Other Promotional Tools

• Word-of-Mouth Promotion -- People tell others about products they have purchased.

• Word-of-Mouth is important for products like:

- Restaurants

- Daycare and Eldercare

- Car Repair Shops

- Hair Stylists

- Hotels

USING WORD-of-MOUTH PROMOTION

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*Viral Marketing

• Viral Marketing -- Paying customers to say positive things on the Internet or setting up multiple selling schemes whereby consumers get commissions.

• People who promote through viral marketing often receive SWAG which can include free tickets, shirts, and other merchandise.

EMERGING PROMOTIONAL TOOLS

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*Blogging, Podcasting and E-mail Promotions

• Blog -- Short for web log; an online diary that looks like a webpage but is easier to create and update by posting text, photos, videos, or links.

• Podcasting -- A way to distribute audio and video programs via the Internet.

• Email promotions increase brand awareness among commercial suppliers.

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*Managing the Promotion Mix: Putting it All Together

• Push Strategy -- Producers use advertising, personal selling, sales promotion, and other tools to get their products stocked on shelves.

• Pull Strategy -- Directs heavy advertising and sales promotions efforts towards consumers and gets the public to request their products from retailers.

• Pick Strategy -- Refers to consumers who pick out their products from online outlets.

PUSH, PULL, AND PICK PROMOTIONAL STRATEGIES

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