Unit1 marketing mix promotion


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  • Unit1 marketing mix promotion

    1. 1. Unit1 Promotion Subhajit Sanyal
    2. 2. PROMOTION IS THE ELEMENT IN AN ORGANIZATION’S MARKETING MIX THAT SERVES TO INFORM, PERSUADE, AND REMIND THE MARKET REGARDING THE ORGANIZATION AND/OR ITS PRODUCTS. <ul><li>It includes all the means by which a company communicates directly with potential customers. </li></ul><ul><li>It is an attempt to influence feelings, beliefs, or behavior. </li></ul><ul><li>A blend of communication media that is targeted at creating some form of change (attitudinal / behavioural) in the target audience. </li></ul>
    3. 3. PROMOTION AND SEGMENTATION <ul><li>The audience of communication must correspond closely to a firm’s target market </li></ul><ul><li>Many approaches to defining audiences and target markets </li></ul>
    4. 4. Remember Models of Consumer Buying Behaviour Awareness Interest Evaluation Trial Adoption Mass communication sources - television, press/magazines, radio Mass communication sources - press/ magazines television, radio Personal sources - relatives, friends, colleagues Personal sources - sales people, relatives friends Personal sources and mass media communication (for re-assurance).
    5. 5. KEY ELEMENTS OF THE PROMOTION MIX <ul><li>Advertising - any paid form of non personal communication of ideas goods or services delivered through selected media channels </li></ul><ul><li>Selling and Sales Management - the personal interface between a company and its customers, aimed at achieving a sale. </li></ul><ul><li>Personal selling: The direct presentation of a product to a prospective customer by a representative of the selling organization. </li></ul><ul><li>Sales promotion: Demand-stimulating activity designed to supplement advertising and facilitate personal selling. </li></ul><ul><li>Public relations: A planned communication effort by an organization to contribute to generally favourable attitudes and opinions toward an organization and its products. </li></ul><ul><li>Publicity: A special form of public relations that involves news stories about an organization or its products. </li></ul><ul><li>Direct marketing - Direct communication using direct mail, telephone response media and more recently the Internet </li></ul>
    6. 6. Promotional Tools Personal Selling Branding Sales Promotion Public relations Merchandising Direct Marketing Exhibitions Word of Mouth Internal Marketing Corporate Image Packaging Sponsorship Advertising The Customer
    7. 7. Advertising <ul><li>“ Non- personal paid for communications targeted through mass media with the purpose of achieving set objectives such as creating awareness or encouraging trial. It is a means of reaching large audiences in a cost effective manner” </li></ul><ul><li>Advertising Plan - the message, the media and the timing </li></ul><ul><li>Used to differentiate, remind, inform and persuade </li></ul><ul><li>To be effective - must be likeable - interesting, meaningful & relevant to the brand and target audience. </li></ul>
    8. 8. cc Advertising uses Promote products, organisations and causes Stimulate primary and selective demand Offset competitors’ advertising Aid sales personnel Increase uses of a product Remind and reinforce Reduce sales fluctuations Major uses of advertising
    9. 9. Identify and analyse advertising target Define advertising objectives Create advertising platform Determine advertising budget Evaluate advertising effectiveness Execute campaign Create advertising messages Develop media plan General steps for developing and implementing an advertising campaign
    10. 10. Sponsorship <ul><li>Potential opportunities </li></ul><ul><li>Exposure to audiences that each event attracts to convey awareness-based brand messages </li></ul><ul><li>To suggest to the target audience that there is an association between sponsored & sponsor </li></ul><ul><li>To allow target audience to perceive sponsor through a third party & diffuse any negative effects </li></ul><ul><li>To blend a variety of promotional tools more efficiently and effectively </li></ul>
    11. 11. PERSONAL SELLING <ul><li>Sales techniques </li></ul><ul><li>Sales force deployment & structure </li></ul><ul><li>Incentives & rewards </li></ul><ul><li>Recruitment & training </li></ul><ul><li>Remuneration </li></ul><ul><li>Sales force effectiveness </li></ul>
    12. 12. Motivating sales force performance through an organised set of activities Sales personnel Organisational climate Sales meetings Financial compensation Sales support systems Perks Incentive programmes
    13. 13. Sales Promotion <ul><li>An activity or material(s) which act(s) an an inducement and offers added value or incentive to buy. </li></ul><ul><li>Usually short term </li></ul><ul><li>Usually to promote trial </li></ul><ul><li>Usually for FMCGs </li></ul><ul><li>Long term value? </li></ul><ul><li>Usually in store </li></ul><ul><li>Literature </li></ul><ul><li>Exhibitions </li></ul><ul><li>Retailer & distributor incentives </li></ul><ul><li>Point of purchase sales </li></ul><ul><li>Consumer gifts & incentives </li></ul><ul><li>Loyalty programmes </li></ul>
    14. 14. Uses of sales promotion in the marketing channel (Consumer promotion) (Trade promotion) Initiator of promotion Audience for promotion Consumer: Coupons, free samples, demonstrations, competitions Trade (at wholesalers, retailers, salespeople): Sales competitions, free merchandise, P.O.S. displays, plus trade shows and conferences (Sales force promotion) (Retail promotion) SOURCE: John Rossiter and Larry Percy, Advertising and Promotion Management. Copyright  1987 by McGraw-Hill, Inc. Used with permission of The McGraw-Hill Companies. Manufacturer Sales force Distributor Consumer
    15. 15. Types of Direct Marketing <ul><li>Direct Mail </li></ul><ul><li>Telemarketing </li></ul><ul><li>Door-to-Door Selling </li></ul><ul><li>DRTV </li></ul><ul><li>Internet based home shopping </li></ul><ul><li>Home Shopping Networks - Sky </li></ul><ul><li>Door Drops </li></ul>
    16. 16. Direct mail <ul><li>Printed advertising material delivered to the door - business or domestic premises. </li></ul><ul><li>Can be used for domestic products or services </li></ul><ul><li>Often used by non business organisations (esp. charities) </li></ul><ul><li>Success depend on targeting </li></ul><ul><li>Open to noise * Nuisance? </li></ul>
    17. 17. Public Relations <ul><li>The art and science of analysing trends, predicting their consequences, counselling organisation leaders and implementing planned programmes of action which will serve both the organisation’s and the public interest. </li></ul><ul><li>OR </li></ul><ul><li>The development and maintenance of good relationships with different publics. </li></ul>
    18. 18. The tools of Public Relations <ul><li>Press releases </li></ul><ul><li>Lobbying </li></ul><ul><li>Education and training </li></ul><ul><li>Exhibitions and shows </li></ul><ul><li>In-house journals </li></ul><ul><li>Sponsorship </li></ul>
    19. 19. The Role of Marketing Communication <ul><li>Inform </li></ul><ul><li>Persuade </li></ul><ul><li>Build relationships </li></ul><ul><li>End-term goal is to influence demand and generate sales </li></ul>
    20. 20. Marketing Communications Decisions <ul><li>Identification of target audience </li></ul><ul><li>Determination of response sought </li></ul><ul><li>Choice of message </li></ul><ul><ul><li>AIDA – model </li></ul></ul><ul><ul><li>A - Attention (Awareness): attract the attention of the customer. </li></ul></ul><ul><ul><li>I - Interest: raise customer interest by demonstrating features, advantages, and benefits. </li></ul></ul><ul><ul><li>D - Desire: convince customers that they want and desire the product or service and that it will satisfy their needs. </li></ul></ul><ul><ul><li>A - Action: lead customers towards taking action and/or purchasing. </li></ul></ul><ul><ul><li>Message content – What to say? </li></ul></ul><ul><ul><ul><li>Rational appeals </li></ul></ul></ul><ul><ul><ul><li>Emotional appeals </li></ul></ul></ul><ul><ul><ul><li>Moral appeals </li></ul></ul></ul><ul><ul><li>Message structure and format – How to say it </li></ul></ul>
    21. 21. Sales Force – (Face to Face Selling) <ul><li>Appropriate when </li></ul><ul><li>The product is complex and needs detailed information </li></ul><ul><li>The product is adaptable top the client’s needs </li></ul><ul><li>The potential sales value is high </li></ul><ul><li>The prospective clients expect a sales visit </li></ul><ul><li>The market is highly competitive </li></ul>
    22. 22. Sales Promotions / Point-of-Sale <ul><li>Designed to stimulate short-term revenues of immediate sales (i.e. launch of new product, filling periods of low demand) </li></ul><ul><li>Must conform with current marketing objectives and be consistent with current brand image </li></ul><ul><li>Must be competitive </li></ul><ul><li>Must be properly budgeted </li></ul><ul><li>Must be creative </li></ul><ul><li>Must run over the right period of time </li></ul>
    23. 23. Public Relations <ul><li>The focus of PR is to generate positive publicity for the company in the media </li></ul><ul><li>The PR role includes managing publicity aimed at financial stakeholders, governmental bodies as well as promoting the image of the parent company and specific brands </li></ul><ul><li>Crucial in crisis management </li></ul>
    24. 24. Direct Marketing <ul><li>Direct-to-consumer communication </li></ul><ul><ul><li>Mail shots </li></ul></ul><ul><ul><li>SMS and Email promotions </li></ul></ul><ul><li>Some forms of direct marketing, i.e. birthday cards, personalized promotions require an updated guest database </li></ul><ul><li>Effective tool in terms of relationship marketing </li></ul>
    25. 25. Integrated Marketing Communication <ul><li>Consistently designed marketing communication strategy that includes different types of media </li></ul><ul><li>All marketing communications material should be reflecting the brand image </li></ul>
    26. 26. Types of Media <ul><li>Print Material </li></ul><ul><li>CD-ROMs / Videos </li></ul><ul><li>Websites </li></ul><ul><li>Advertisements </li></ul><ul><ul><li>Newspapers </li></ul></ul><ul><ul><li>Magazines </li></ul></ul><ul><ul><li>Tourist Board Publications </li></ul></ul><ul><ul><li>Television </li></ul></ul><ul><ul><li>Cinema </li></ul></ul><ul><ul><li>Radio </li></ul></ul>
    27. 27. P ROMOTION IS COMMUNICATION, AS SUCH IT HAS FOUR BASIC ELEMENTS: <ul><li>A message </li></ul><ul><li>A source of the message </li></ul><ul><li>A communication channel </li></ul><ul><li>A receiver </li></ul>A ND SEVERAL IMPORTANT COMPONENTS: <ul><li>Encoding </li></ul><ul><li>Decoding </li></ul><ul><li>Response </li></ul><ul><li>Feedback </li></ul><ul><li>Noise </li></ul>
    28. 28. Components of the Linear Model <ul><li>Source - the individual or organisation sending the message </li></ul><ul><li>Encoding - transferring the message to symbolic format </li></ul><ul><li>Signal - message transmission using media </li></ul><ul><li>Decoding - understanding the symbolic format </li></ul><ul><li>Receiver - the individual or organisation receiving the message </li></ul><ul><li>Feedback - the receivers communication back to the source </li></ul><ul><li>Noise - distortion or interruption of the communication format </li></ul>
    29. 29. MESSAGE CHANNEL Select the media or other vehicle to carry the message DECODING THE MESSAGE Receiver compares message to frame of reference MESSAGE AS RECEIVED Knowledge, beliefs, or feelings of receiver changed RESPONSE Ranges from simple awareness to purchase FEEDBACK Impact measured using research, sales, or another measure ENCODING THE MESSAGE Create an ad, display, or sales presentation MESSAGE AS INTENDED A promotional idea in marketer’s mind NOISE Competing ads, other distractions
    30. 30. Source Coded message Medium of transmission Decoded message Receiver or audience NOISE NOISE Feedback Figure 16.2 The communication process
    31. 31. What is Communication ? SENDER MESSAGE RECEIVER ENCODE DECODE FEEDBACK n o i s e
    32. 32. The Marketing Communications Process Sender Encoding NOISE Message Media FEEDBACK Decoding Receiver
    33. 33. I NSIGHTS FROM A COMMUNICATIONS PERSPECTIVE INCLUDE: <ul><li>The act of encoding allows that messages can take many forms. </li></ul><ul><li>The methods of transmitting a message are limited only by the imagination and creativity of the sender. </li></ul><ul><li>How the message is decoded depends on its form and the capability and interest of the recipient. </li></ul><ul><li>Without measurable objectives, the effectiveness of a message cannot be evaluated. </li></ul>
    34. 34. <ul><li>Over 40 percent of Americans seek the advice of family and friends when shopping. </li></ul><ul><li>Unhappy customers are likely to share their grievance with at least nine other persons. </li></ul><ul><li>It is possible to generate positive word of mouth. </li></ul>W ORD OF MOUTH IS A SPECIAL FORM OF COMMERCIAL COMMUNICATION
    35. 35. P ROMOTION IS NECESSARY IN A FREE MARKET ECONOMY BECAUSE OF: <ul><li>Product differentiation </li></ul><ul><li>Emotional buying behavior </li></ul><ul><li>Less-than-complete market information. </li></ul>
    36. 36. IN ECONOMIC TERMS, THE PURPOSE OF PROMOTION IS TO CHANGE THE LOCATION AND SHAPE OF THE DEMAND CURVE FOR A COMPANY’S PRODUCT. IT CAN: <ul><li>Increase a product’s sales volume at any given price by shifting the demand curve to the right. </li></ul><ul><li>Affect the demand elasticity for a product so that it is more inelastic when price is increased and more elastic when price is decreased. </li></ul>
    37. 37. Price Price Quantity Quantity Demand goal with promotion Demand without promotion a. A shift in the demand curve to the right. b. Changing the shape (or elasticity) of the demand curve. Demand goal with promotion Demand without promotion
    38. 38. FOUR FACTORS SHOULD BE TAKEN INTO ACCOUNT WHEN DETERMINING THE PROMOTIONAL MIX : <ul><li>Target market </li></ul><ul><ul><li>Readiness to buy </li></ul></ul><ul><ul><li>Geographic scope </li></ul></ul><ul><ul><li>Type — consumer or middleman </li></ul></ul><ul><ul><li>Concentration </li></ul></ul><ul><li>Nature of the product </li></ul><ul><li>Stage of the product’s life cycle </li></ul><ul><li>Amount of money available for promotion </li></ul>
    39. 39. A BASIC DECISION IS THE CHOICE OF A PUSH OR PULL STRATEGY. <ul><li>A push strategy is directing the promotion primarily at the middlemen that are the next link forward in the producer’s distribution channel. </li></ul><ul><li>A pull strategy has the promotion directed at the end users — primarily consumers. </li></ul>
    40. 40. Producer Wholesaler Retailer Consumer Producer Wholesaler Retailer Consumer PUSH STRATEGY PULL STRATEGY Product flow Promotion effort
    41. 41. A CAMPAIGN IS A COORDINATED SERIES OF PROMOTIONAL EFFORTS BUILT AROUND A SINGLE THEME AND DESIGNED TO REACH A PREDETERMINED GOAL. <ul><li>A campaign theme is the promotional appeal dressed up in a distinctive, attention-getting form that expresses the product’s benefits. </li></ul><ul><li>The promotional elements are coordinated in a strategy called integrated marketing communications. </li></ul><ul><li>A complete campaign includes the evaluation of results against objectives. </li></ul>
    42. 42. THERE ARE FOUR METHODS OF DETERMINING THE BUDGET FOR PROMOTION <ul><li>Regulation by private organizations: </li></ul><ul><ul><li>Numerous private organizations, for instance the Council of Better Business Bureaus. </li></ul></ul><ul><ul><li>Media by refusing to accept ads they feel are false, misleading, or in bad taste. </li></ul></ul><ul><ul><li>Some magazine (Good Housekeeping and Parent) substantiate advertising claims before ads are accepted. </li></ul></ul><ul><ul><li>Some trade associations have established codes of ethics that include standards for sales force behavior and advertising activity. </li></ul></ul>