BASIC MARKETING

Chapter 14 Promotion Introduction to Integrated Marketing Communication

McGraw-Hill/Irwin

Copyright 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

VIDEO
! Ski and golf resort how you can utilize the promotional mixes to be effective: ! Boyne USA Resorts ! Success depends on marketing communication programs, they dont have a product that it on a self if we dont sell that room that day it is gone forever, a golfer is not a skier there are different levels of expectations, create a difference that is the goal of marketing and positioning, have to create awareness ! How can they promote each destination resort to increase revenue? Sales and marketing and advertising were separate groups, we determine with the individuals by season and by business, have to use all forms of media ! People have a perception of what Boyne is and use it as an umbrella to create an identity of what Boyne is, they target a specific market within their regions ! Use marketing research to tell us the age, preferences, how do you talk to a snowboarder vs a skier ! Use TV, radio, personal selling, promotions, and special events to advertise, direct customer contact over 50% customers are repeat customers; internet is the most powerful tool that companies can use to advertise

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Marketing Strategy Planning Process

How do you promote your product or your brand

! This is the first of three chapters that discuss issues important for Promotion. The Promotion part of the marketing mix involves telling target customers that the right Product is available at the right Place at the right Price.

Promotion and Marketing Strategy Planning (Exhibit 14-1)

Summary Overview There are many decisions that a marketing manager must make concerning Promotion, and it is an important part of marketing strategy planning. Key Issues Marketing managers usually blend a variety of different promotion methods to achieve promotion objectives because each method has its own strengths and limitations. In this chapter we introduce major promotion options and how to integrate them into an effective whole. The discussion will consist of four main sections: (1)! Promotion methods; (2)! Managing promotion; (3)! Effective communication; (4)! Blending promotion.

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CH 14: Promotion Intro. to Integrated Marketing Communications

CH 15: Personal Selling and Customer Service

CH 16: Advertising & Sales Promotion

Promotion methods

Managing promotion

Effective communication

Blending promotion

Integrated Marketing Communications

d e t a r g e Int ing t e k r a M ons i t a c i n u Comm

The careful coordination of all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer
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IMC Popularity Growth

! Proliferation of thousands of media choices ! Fragmentation of the mass market ! Slash of advertising spending in favor of promotional techniques that generate immediate response
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Factors Affecting the Choice of Promotional Mix

Nature of the productpromotional product vary from one product to another, if you want to market an engine you dont send them a brochure to get your point across

Nature of the product Stage in PLC Target market characteristics Type of buying decision Promotion funds Push or pull strategy

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Exhibit 16.5
Product Life Cycle and the Promotional Mix
Use a lot of advertising to get the product, then go to heavy advertising as it grows even higher get more advertising, as the product matures there is a decrease in advertising just send out persuasive ads, in decline mode more press releases because the product is declining and get sales effort away Different promotional mixes are utilized

Light Advertising; Preintroduction publicity

Heavy Advertising; PR for awareness; sales promotion for trial

Advertising, PR, brand loyalty; personal selling for distribution

Ads decrease; sales promotion; personal selling; reminder & persuasive

AD/PR decrease; limited sales promotion; personal selling for distribution

When the smart car was first announced they went to major cities and gave free rides in the smart car, they knew the target market people were looking for cheap transportation and didnt have to worry about parking; look at the target market and see what is the market we are going after, advertising mixes depends on the target market

Target Market Characteristics

For!
Advertising Sales Promotion Less Personal Selling

!! Widely scattered market !! Informed buyers !! Brand-loyal repeat purchasers

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Type of Buying Decision

Routine
Advertising Sales promotion

Neither Routine nor Complex

Advertising Public Relations Personal selling Print Advertising

Complex

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Available Funds
What is the cost to run a TV ad? Can you afford that there is a cost that is associated with that

!!Trade-offs with funds available !!Number of people in target market !!Quality of communication needed !!Relative costs of promotional elements
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Exhibit 16.6
Push Strategy versus Pull Strategy

Push strategymanufacture aggressively sells the product tries to convince the wholeseller and retailer Pull- manufacture promote the product directly to the user Use the two strategies push and pull the demand for the product use both of these you will be very successful

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The Role of Promotion

Promotional Strategy
A plan for the optimal use of the elements of promotion: !! Advertising !! Public Relations !! Personal Selling !! Sales Promotion
Promotion perform, persuade, and remind the different ways of promoting this is advertising, public relations, personal selling, sales promotion

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The Promotional Mix

al n o i t o m o r P Mix

Combination of promotion tools used to reach the target market and fulfill the organizations overall goals. Includes: !! !! !! !! !! Advertising Public relations Personal selling Sales promotion Social media 4

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The Promotional Mix

A ng i s i t r dve
Most commonly distributed by traditional media, though increasingly through nontraditional media, such as Web sites, e-mail, blogs, and interactive video, kiosks in malls and supermarkets

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Advertising Media
Traditional Advertising Media New Advertising Media

!! !! !! !! !! !! !! !!

Television Radio Newspapers Magazines Books Direct mail Billboards Transit cards

!! !! !! !! !!

Internet Banner ads Viral marketing E-mail Interactive video

Mobility is important in getting people where they are, people are very mobile, advertising is everywhere

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Advertising
Advantages
!! Reach large number of people !! Low cost per contact !! Can be micro-targeted

Disadvantages
!! Total cost is high !! National reach is expensive for small companies

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Public Relations
c i l b u P s n o i t Rela

Evaluates public attitudes, identifies areas within the organization that public may be interested in, and executes a program to earn public understanding

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The Function of Public Relations

"! Ma intain a p o si tive im "! Edu age cate th e publ compa ic abo nys ob ut the j e c "! Intr tives oduce new p roduct "! Sup s port th e sa l e "! Gen s effor t erate f avorab le pub licity
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Communication
Communication
the process by which meanings are exchanged or shared through a common set of symbols.

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Marketing Communication
Categories of Communication

Interpersonal Communication

Mass Communication

Interpersonal- eye to eye toe to toe Mass- group of people Whichever is appropriate these are ways communicating the message to someone

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Marketing Communication
As Senders
"! Inform "! Persuade "! Remind

As Receivers
"! Develop messages "! Adapt messages "! Spot new communication opportunities

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Exhibit 16.2
Communication Process
Encoding- converting senders thought Noise- anything that interferes, there will always be competing things out there that can distort the message Receiver- decodes the message Take the sender encode the message properly and the receiver hopefully I agree and gets interest in the product We are always sending messages

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Communication and the Internet

Traditional advertising model: ! Impersonal ! Numbers driven ! Unquantifiable consumer behavior Internet and social media advertising: !Personal !Direct communication !Feedback driven !Highly visible communication
2

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The AIDA Concept

Attention Interest Desire Action

Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message.

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The AIDA Concept

Action Desire Interest Attention
Conative (doing) Affective (feeling) Cognitive (thinking)

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Goals and Tasks of Promotion

Informing
PLC Stages:
Introduction early growth

Reminding
PLC Stages:

Target Audience

PLC Stages:
Growth maturity

Persuading
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Goals and Tasks of Promotion

Informative Promotion
"! Increase awareness "! Explain how product works "! Suggest new uses "! Build company image

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Goals and Tasks of Promotion

Persuasive Promotion
"! Encourage brand switching "! Change customers perception of product attributes "! Influence immediate buying decision "! Persuade customers to call

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Goals and Tasks of Promotion

Reminder Promotion
"! Remind customers that product may be needed "! Remind customers where to buy product "! Maintain customer awareness

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Sales Promotion
Sales n io t o m Pro

Marketing activities other than personal selling, advertising, and public relationsthat stimulate consumer buying and dealer effectiveness.

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Sales Promotion
Free samples Contests Premiums Trade Shows Vacation Giveaways Coupons
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End Consumers Trade Customers Company Employees

Personal Selling
l a n o s Per g n i l l e S

Planned presentation to one or more prospective buyers for the purpose of making a sale.

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People do business with people that they like.

Personal Selling
Traditional Selling Attempts to persuade the buyer into a specific point of view. Win-lose outcome

Relationship Selling

Long-term relationships create a win-win outcome

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Social Media
ia d e M l a i Promotion tools used to c o S facilitate conversations among people online.

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Social Media
!! Blogs !! Microblogs !! Podcasts !! Vodcasts !! Social Networks Allow marketers to:
!Manage brand images !Engage with consumers !Generate interest

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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

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.

Setting the Promotion Budget

! Budget based on percent of past or expected sales
! most common approach ! main advantage is ease ! can lead to major problems, including cutbacks when more money is needed

! Task methodbudgets for what needs to be accomplished

! usually the sensible approach ! requires that activities be evaluated against objectives

! Same ideas apply in budgeting other types of marketing activities

Study Question 1
Which of the following is the main type of "mass selling"? A. Personal selling. B. Publicity. C. Sales promotion. D. Advertising. E. Both B and D.

Study Question 2
A car company sent three automobile magazines some technical information and explanations about the features of its innovative new model. One of the magazines later printed a story about the car. This is an example of: A. personal selling. B. advertising. C. publicity. D. sales promotion. E. None of the above

Study Question 3
Blending the firm's promotion efforts to convey a complete and consistent message is the goal of: A. Sales management communications. B. Sales promotion communications. C. Integrated promotional marketing. D. Integrated marketing communications. E. Integrated sales promotion.

Study Question 4
What basic promotion objective should be emphasized by a producer introducing a really new product which satisfies customer needs better than any existing product? A. Persuading B. Reminding C. Maximizing D. Informing E. Communicating

Study Question 5
What basic promotion objective should be sought by a producer whose Product is very similar to its many competitors' Products? A. Persuading B. Promoting C. Communicating D. Informing E. Reminding