Chapter 13 Promotion Introduction to Integrated Marketing Communication Copyright 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 13-2 At the end of this presentation, you should be able to: 1. know the advantages and disadvantages of the promotion methods a marketing manager can use in strategy planning. 2. understand the integrated marketing communications concept and why firms use a blend of different promotion methods. 3. understand the importance of promotion objectives. 4. know how the traditional communication process affects promotion planning. 5. understand how customer-initiated interactive communication is different. 13-3 At the end of this presentation, you should be able to: 6. know how typical promotion plans are blended to get an extra push from wholesalers and retailers, as well as help from customers in pulling products through the channel. 7. understand how promotion blends typically vary over the adoption curve and product life cycle. 8. understand how to determine how much to spend on promotion efforts. 9. understand important new terms. 13-4 Promotion and Marketing Strategy Planning (Exhibit 13-1) CH 14: Personal Selling and Customer Service CH 13: Promotion Intro to Integrated Marketing Communications Promotion methods Managing promotion Effective communication Blending promotion CH 15: Advertising, Publicity, & Sales Promotion 13-5 Several Promotion Methods Are Available Mass Selling Personal Selling Sales Promotion Different Methods of Promotion AdvertisingPublicity 13-6 Someone Must Plan, Integrate, and Manage the Promotion Blend Sales Promotion Managers Advertising Managers Sales Managers Marketing Managers Integrated Marketing Communications 13-7 Which Method to Use Depends on Promotion Objectives Persuading Informing Reminding 13-8 Reminding May Be Enough Copyright 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 13-9 Relation of Promotion Objectives, Adoption Process, and AIDA Model(Exhibit 13-2) Promotion Objectives Adoption Process AIDA Model Informing Awareness Interest Attention Interest Persuading Evaluation Trial Desire Reminding Decision Confirmation Action { } } 13-10 Interactive Exercise: AIDA 13-11 The Traditional Communication Process (Exhibit 13-3) Noise Source Receiver Encoding Message channel Decoding Feedback 13-12 This Same Message May Be Interpreted Differently(Exhibit 13-4) Encoder Common frame of reference Decoder 13-13 Checking Your Knowledge Ron Popeil has been a pioneer in the use of direct- response television infomercials. Over the years his infomercials have promoted many products, including the Showtime Rotisserie Barbecue, a food dehydrating machine, and the world-famous Veg-O-Matic. The chief advantage of the infomercial is that it provides plenty of time to describe and demonstrate a products benefits in detail. The choice of the infomercial is related mainly to the _________ element of the communication process. A.message channel B.encoding C.decoding D.feedback E.noise 13-14 Encoding and Decoding Copyright 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 13-15 Feedback Integrated Direct- response Promotion Targeted Direct- response Promotion Outbound Promotion Model 13-16 A Model of Customer-Initiated Interactive Communication (Exhibit 13-5) Noise Sources message Message channel Search Select a topic Receiver (customer) 13-17 Ethical Issues in Promotion Exaggerated claims Invading consumer privacy Source credibility Promotion frequently dances on ethical boundaries 13-18 Pushing in the Channel Focuses Promotion at Intermediaries (Exhibit 13-6) Final consumers request (pull) product Final consumers request (pull) product Business customers request (pull) product Business customers request (pull) product Producers promotion blend Personal selling, sales promotion, advertising, and publicity Producers promotion blend Personal selling, sales promotion, advertising, and publicity Wholesalers promotion push Wholesalers promotion push Retailers promotion push Retailers promotion push Wholesalers promotion push Wholesalers promotion push Promotion to business customers Promotion to channel members Promotion to final customers 13-19 An Example of Pushing and Pulling 13-20 Checking Your Knowledge Fido, Inc. is a producer of dog food and is getting ready to introduce a new brand. The firms marketing research department learns that a competitor is planning to launch another brand about two weeks after Fidos launch. Fidos marketing department quickly mails a set of dated coupons to several thousand consumers in a purchased database of dog owners, encouraging them to ask for the new Fido brand in their favorite store and to stock up on the new brand using the coupons. This is an example of: A.pulling. B.noise. C.pushing. D.encoding. E.decoding. 13-21 The Adoption Curve (Exhibit 13-7) Innovators (35%) Laggards or nonadopters (516%) Early adopters (1015%) Early majority (34%) Late majority (34%) Time Percent adoption 13-22 Opinion Leaders Matter 13-23 Stimulating Adoption of an Image Copyright 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 13-24 Promotion Varies Over the Life Cycle This new idea is good Our brand is best Our brand is better, really Reminder: Stick with our brand. 13-25 Setting the Promotion Budget Percentage of Sales Task Method 13-26 You should now be able to: 1. know the advantages and disadvantages of the promotion methods a marketing manager can use in strategy planning. 2. understand the integrated marketing communications concept and why firms use a blend of different promotion methods. 3. understand the importance of promotion objectives. 4. know how the traditional communication process affects promotion planning. 5. understand how customer-initiated interactive communication is different. 13-27 You should now be able to: 6. know how typical promotion plans are blended to get an extra push from wholesalers and retailers, as well as help from customers in pulling products through the channel. 7. understand how promotion blends typically vary over the adoption curve and product life cycle. 8. understand how to determine how much to spend on promotion efforts. 9. understand important new terms. Key Terms 1. promotion 2. personal selling 3. mass selling 4. advertising 5. publicity 6. sales promotion 7. sales managers 8. advertising managers 9. public relations 10. sales promotion managers 11. integrated marketing communications 12. AIDA model 13. communication process 14. source 15. receiver 16. noise 17. encoding 18. decoding 19. message channel 20. pushing 13-28 Key Terms 21. pulling 22. adoption curve 23. innovators 24. early adopters 25. early majority 26. late majority 27. laggards 28. nonadopters 29. primary demand 30. selective demand 31. task method 13-29