Elements of the Promotion Mix AdvertisingIngredients Public Relations Ingredients of the of the Promotion Promotion Mix Mix Personal Selling Sales Promotion
The Communication Process NoiseSender Encoding Channel Decoding Receiver Channel
Goals and Tasks of Promotion Informing Reminding Target Audience Persuading
AIDA and the Hierarchy of Effects Purchase Conviction Preference Liking KnowledgeAwareness Attention Interest Desire Action
When Elements of Promotion Are Most Useful AdvertisingEffectiveness Personal selling Sales promotion Public relations Awareness Knowledge Liking Preference Conviction Purchase Very effective Somewhat effective Either not effective or inefficient
Factors that Affect the Promotion Mix Nature of the Product Stage in the Product Life Cycle Target Market Characteristics Type of Buying Decision Available Funds $$$ Push–and–Pull Strategies
Creating a Promotion Plan Analyze the Marketplace Identify Target Market Set Promotion Objectives Develop Promotion Budget Choose Promotion Mix
Criteria for Setting Promotion Objectives Promotion objectives should: be measurable, concrete be based on sound research, with a well-defined target audience be realistic reinforce the overall marketing plan and relate to specific marketing objectives
Examples of Promotion ObjectivesObjective: To Inform (Awareness)To increase the top-of-mind awareness level for Peter Panpeanut butter from 16 percent to 24 percentObjective: To Persuade (Attitudinal)To increase the percentage of parents who feel that Peter Panpeanut butter is the best peanut butter for their children from22 percent to 35 percentObjective: To RemindTo remind consumers that Peter Pan peanut butter is thecreamiest peanut butter and is available at their nearest groceryand convenience stores
Techniques for Setting Promotion Budgets • Arbitrary Allocation • All - You - Can - Afford • Competitive Parity • Percent of Sales • Market Share • Objective and Task
Regulation of Promotion Self-Regulation • National Advertising Division (NAD) • National Advertising Review Board (NARB) Federal Regulation • Federal Trade Commission (FTC)
Effects of Advertising DiminishingReturn on Advertising Expenditures returns on additional spending Increasing efficiency as ad budget becomes sufficient Advertising Spending
Major Types of Advertising Corporate Image Institutional Advertising Advocacy Advertising Types Types of ofAdvertisingAdvertising Pioneering Product Competitive Advertising Comparative
Advertising Campaign Decision Process Determine the campaign objectives.Make creative decisions. Make media decisions. Evaluate the campaign.
Common Advertising AppealsProfitProfit Save money, keep from losing money Save money, keep from losing moneyHealthHealth Body-conscious, healthy Body-conscious, healthyLove or RomanceLove or Romance Sell cosmetics and perfumes Sell cosmetics and perfumes Social embarrassment, growing old, losing Social embarrassment, growing old, losingFearFear health, power health, powerAdmirationAdmiration Celebrity endorsement effective Celebrity endorsement effectiveConvenienceConvenience Fast-food and microwave products Fast-food and microwave productsFun and PleasureFun and Pleasure Vacations, beer, amusement parks Vacations, beer, amusement parksVanity and Egotism Expensive, conspicuous itemsVanity and Egotism Expensive, conspicuous items
Executional Styles for Advertising Scientific Slice-of-Life Musical LifestyleDemon- Common Common Spokes- person/stration Executional Executional Testimonial Styles Styles Mood or Fantasy Image Real/ Animated Humorous Product Symbols
The Tools of Public Relations New Product Publicity Product Placement Customer Satisfaction Major Major Phone Lines Tools Tools Used By Used By Consumer Education PR PRProfessionalsProfessionals Event Sponsorship Issue Sponsorship Web Sites
Types of Consumer & Sales Promotion Type of buyer Goals Sales promotion examples Desired results Loyal customers Reinforce behavior, • Loyalty marketing programs, People who buy your increase consumption, such as frequent-buyer cards product most or all change purchase timing or frequent-shopper clubs of the time • Bonus packs that give loyal consumers an incentive to stock up or premiums offered in return for proofs-of-purchase Competitor’s Break loyalty, persuade •Sampling to introduce your customers to switch to your brand product’s superior qualities People who buy a compared to their brand competitor’s product • Sweepstakes, contests, or most or all of the time premiums that create interest in the product Brand switchers Persuade to buy your • Any promotion that lowers the People who buy a brand more often price of the product, such as variety of products coupons, price-off packages, in the category and bonus packs • Trade deals that help make the product more readily available than competing products Price buyers Appeal with low prices • Coupons, price-off packages, People who or supply added value refunds, or trade deals that consistently buy the that makes price less reduce the price of brand to least expensive brand important match that of the brand that would have been purchasedSource: From Sales Promotion Essentials, 2E by Don. E. Schultz, William A. Robinson, and Lisa A. Petrison. Reprinted by permission of NTC Publishing Group, Lincolnwood, IL.
Tools for Consumer Sales Promotion Coupons Premiums Six SixCategories Categories Frequent Buyer Programs of ofConsumer Consumer Contests and Sales Sales SweepstakesPromotionsPromotions Samples Point-of-Purchase Displays
Tools for Trade Sales Promotion Trade Allowances Push Money Six Six Training Categories Categories of of Trade Trade Free Merchandise Sales Sales Promotions Promotions Store Demonstrations Business Meetings,Conventions, Trade-Shows
Advantages of Personal Selling Detailed Detailed Information Information Message Control Message Control Targeted Targeted Cost Control Cost Control Closing Sales Closing Sales
Advertising Versus Personal SellingPersonal Selling is more important if...The product has a high value.It is a custom-made product.There are few customers.The product is technically complex.Customers are geographically concentrated.Advertising/Sales Promotion is more important if...The product has a low value.It is a standardized product.There are many customers.The product is simple to understand.Customers are geographically dispersed.
Differences Between Traditional & Relationship Selling Traditional Personal Selling Relationship Selling Sell products (goods and services) Sell advice, assistance, and counsel Focus on closing sales Focus on improving the customer’s bottom line Limited sales planning Considers sales planning as top priority Spend most contact time telling Spend most contact time attempting to build a customers about product problem-solving environment with the customer Conduct “product-specific” needs Conduct discovery in the full scope of the assessment customer’s operations “Lone-wolf” approach to the account Team approach to the account Proposals and presentations based Proposals and presentations based on profit on pricing and product features impact and strategic benefits to the customer Sales follow-up focused on product Sales follow-up is long term, focused on delivery long-term relationship enhancementSource: Robert M. Peterson, Patrick L. Shul, and George H. Lucas, Jr., “Consultative Selling: Walking the Walk in the New Selling Environment,”National Conference on Sales Management, Proceedings, March 1996.
Steps in the Selling Process Generating Sales Leads Qualifying Sales Leads Basic Basic Making the Sales ApproachSteps inSteps in Making the Sales the the PresentationSelling SellingProcessProcess Handling Objections Closing the Sale Following Up
Functions of Sales Management Set Sales Evaluate Objectives Structure Sales Force Sales ForceManage Major Tasks of Major Tasks of Determine Sales ForceTurnover Sales Sales Size Management Management Develop Motivate Compen-Sales Force sation Plan Train Sales Recruit Sales Force Force
Geographic Pricing FOB Origin Uniform Delivered Pricing Pricing Tactics Tactics Zone PricingBased on Based onGeographyGeography Freight-Absorption Basing-Point
Special Pricing Tactics Single Two-Part Price Flexible Pricing PricingBundle Common Common ProfessionalPricing Special Pricing Special Pricing Services Tactics TacticsOdd-Even Price Pricing Lining Bait Leader Pricing Pricing