Marketing Ch 19

What is Promotion?

The Role of Promotion

• Promotion – Any form of communication a business or organization used to inform, persuade, or remind people about its products and improve its public image.

• Product Promotion – To convince potential customers to buy products from it instead of from a competitor

The Role of Promotion

• Explains the major features and benefits of its product (especially in relation to the products of its competitors)

• Tells where those products are sold• Advertises sales on those products• Answers customers questions• Introduces new products

The Role of Promotion

• Institutional Promotion – Create a favorable image for itself (especially in relation to competitors)– Does not directly sell a certain product– By creating a favorable image ultimately result in

increased sales of a company’s product

Basic Types of Promotions

1. Advertising2. Publicity3. Sales Promotion4. Personal Selling

Advertising

• Advertising – Is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

• Three ways advertising is distinguished from other forms of promotion1. The time or space devoted to it is paid for2. It used a set format to carry the message rather

than personal, one-on-one selling3. It identifies the sponsor of the message

Six Advantages of Advertising1. A large number of people usually see the

advertiser’s message2. Advertising costs per potential customer

(whether that customer is a viewer, reader, or listener) are usually lower than other forms of promotion

3. Businesses can choose the most appropriate media to reach their target market, since there are many different ways to advertise– Billboards, newspapers, radio, and television

Six Advantages of Advertising4. A business can control the content of an

advertisement and adapt it to the medium and method of presentation

5. Advertisements are subject to repeat viewing. This helps to keep the advertiser’s message in people’s minds.

6. Advertisements can “presale” products – that is, they can influence people to make up their minds about a purchase before they shop.

Four Advertising Drawbacks

1. Advertising cannot focus well on individual needs because the message is the same for all customers.

2. Some forms of advertising, such as television, can be too expensive for many businesses.– Frequent asked questions under favorites

Four Advertising Drawbacks

3. In certain respects, advertising is wasteful and inefficient. Many of the people that read magazines or view television, are not potential customers for the advertised products

4. Because of the cost involved and the need to attract and hold the attention of potential customers, advertisements often must be brief

Publicity

• Publicity – Involves placing newsworthy information about a company, product, or person in the media– Promote particular events– Promote particular product– Principal function to build an image• Image is based on combination of:

– Physical surrounding– Personal experience– Things written or said in the media

Publicity

• How does advertising and publicity differ:– Publicity is FREE– News is huge and people are more likely to pay

attention to a news story about a business than to advertisements for it.

Publicity

• Negative side of publicity– Lose control over their message– Not all publicity is positive

Sales Promotion

• Sales promotions – Represents all marketing activities, other than personal selling, advertising, and publicity– Objective is to increase sales, to inform customers

about new products, and to create a positive store or corporate image

Sales Promotions

• Three unique characteristics:1. It usually involves short term activities

(advertising and publicity are longer in length)2. It usually offers some type of incentive to make a

purchase3. It can be successfully used in all channels of

distribution with manufacturers, wholesalers, retailers, and consumers

Sales Promotions

• May be either consumer orientated or trade orientated

Trade Promotions

• Trade Promotions – Sales promotion activities designed to gain manufacturers’, wholesalers', and retailers’ support for a product– More money is spent promoting to businesses

then to customers

Trade Promotions

• Slotting Allowances – Cash premium paid by the manufacturer to a retail chain for the costs involved in placing a new product on its shelves– Buying space in the store– Pays for a retailers cents –off specials, charges for

store shelves, penalties if a company’s product doesn’t sell, and store advertising and display costs

Trade Promotions

• Buying Allowances – Special price discount given by manufacturers to wholesalers and retailers to encourage them to either buy a product or buy a larger quantity of a product– Because of the discount, wholesalers make more

money on each product they sell

Trade Promotions

• Trade Shows and Conventions – Designed to reach wholesalers and retailers.– Provide businesses with the opportunity to

introduce new product, encourage increase sales, and gain continued support

Trade Promotions

• Sales Incentive – Awards given to managers and employee who successfully meet or exceed their company’s set sales quota for a particular product.

Consumer Sales Promotions

• Consumer promotions – Sales promotions designed to encourage customers to buy a product

Consumer Sales Promotions

• Licensing – For a fee license logo’s, trademark’s, trade characters, names and likenesses, or personal endorsements to a business

Consumer Sales Promotions

• Promotional Tie-ins – Involves sales promotional arrangements between one or more retailers or manufacturers– Combine resources to do a promotion that creates

additional sales for each partner– Designed to stimulate customer response to a

product offered

Consumer Sales Promotions

• Visual Merchandising and Displays – Refers to the coordination of all physical elements in a place of business so that it projects the right image to its customers.– Displays – Refers to the visual and artistic aspect

of presenting a product to a target group of customers

Consumer Sales Promotions

• Premiums and Incentives – Designed to increase sales by building product loyalty and attracting new customers– Premiums – Low-cost items given away free to

consumers as a condition of purchase

Premiums• 4 Types

1. Coupons – cash discounts on goods and services• Introduce new products• Enhance sales of existing products

2. Factory Packs – Free gifts placed in product packaging

Premiums• 4 Types

3. Traffic Builders – low-cost premiums given away free to consumers

4. Coupon Plans – Offering a variety premiums in exchange for labels, coupons, and other tokens• Part–Cash Redemption – Variation whereby you

return proofs-of-purchase in exchange for a gift or rebate

Consumer Sales Promotions

• Incentives – High-priced products earned and given through contests or as sweepstakes awards

• Product Samples – Free trial size of a product dent through the mail, distributed door-to-door, or through retail stores and trade shows

Personal Selling

• Personal Selling – Making an oral sales presentation to one or more potential buyers– Two types

1. Order-Taking2. Order-Getting

Personal Selling

• Order-taking Personnel – Cashiers, counter clerks, sales associates– Perform routine tasks

• Order-Getting Personnel – Professional sales-people – More involves in informing customers and helping

them buy

Promotional Mix

• Promotional Mix – Combination of different types of promotions– Each type of promotion is designed to

complement the other