Chap 17.1 Notes

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Chap 17.1 Notes

  1. 1. Chapter 17 Promotional Concepts and Strategies
  2. 2. Sec 17.1 Promotion and Promotional Mix <ul><li>Promotion is persuasive communication </li></ul><ul><ul><li>companies rely on promotion to inform people about their products and services </li></ul></ul><ul><ul><li>companies use promotional techniques to enhance their public image and reputation and persuade people that their products are valuable </li></ul></ul><ul><ul><li>goals of promotional activities is summerized by the phrase AIDA </li></ul></ul>
  3. 3. AIDA <ul><li>Attract Attention to product </li></ul><ul><li>Build Interest in product </li></ul><ul><li>Create Desire for product </li></ul><ul><li>Ask for Action </li></ul>
  4. 4. Product Promotion <ul><li>businesses use product promotion to convince prospects to select its products or services instead of a competitor’s brands </li></ul><ul><li>explains </li></ul><ul><ul><li>major features and benefits of the product or service </li></ul></ul><ul><ul><li>where it is sold </li></ul></ul><ul><ul><li>advertise sales </li></ul></ul><ul><ul><li>introduce new offerings </li></ul></ul>
  5. 5. <ul><li>product promotion also helps companies foster good relations with existing customers, thereby enhancing their loyalty </li></ul>
  6. 6. Institutional Promotion <ul><li>used to create a favorable image for a business </li></ul><ul><li>help the business advocate for change </li></ul><ul><li>take a stand on trade or community issues </li></ul><ul><li>** do not directly sell a product or service these activities do foster a favorable image for the company </li></ul>
  7. 7. Types of Promotion in the Promotional Mix <ul><li>Five basic categories </li></ul><ul><ul><li>Personal selling </li></ul></ul><ul><ul><li>Advertising </li></ul></ul><ul><ul><li>Direct marketing </li></ul></ul><ul><ul><li>Sales promotions </li></ul></ul><ul><ul><li>Public relations </li></ul></ul>
  8. 8. Personal Selling <ul><li>requires that a company employ sales representatives who generate and maintain direct contact with prospects and customers </li></ul><ul><ul><li>one of costliest forms of promotion </li></ul></ul><ul><ul><li>direct contact can take the form of personal meetings, telemarketing, email contact, and correspondence </li></ul></ul><ul><ul><li>typically takes place after or result of other promotional activities </li></ul></ul>
  9. 9. Advertising <ul><li>form of non-personal promotion </li></ul><ul><li>with advertising, a company engages in a one-way communication to the prospect </li></ul><ul><li>companies pay to promote ideas, goods, services in a variety of media outlets </li></ul><ul><li>advertising found everywhere, radio, magazines, newspapers, television, Web sites, gymnasiums, professional team venues, buses, and billboards </li></ul>
  10. 10. Direct Marketing <ul><li>type of advertising directed to a targeted group of prospects and customers rather than a mass audience </li></ul><ul><ul><li>printed direct mail sent via regular mail to a home or business </li></ul></ul><ul><ul><li>electronic direct mail </li></ul></ul><ul><ul><li>Goals of direct marketing are to generate sales leads for sales representatives to pursue </li></ul></ul>
  11. 11. Sales Promotion <ul><li>Represents all marketing activities other than personal selling, advertising, and public relations that are used to stimulate purchasing and sales </li></ul><ul><li>- objectives of sales promotion are to increase sales, inform potential customers about new products, and create a positive business or corporate image </li></ul>
  12. 12. Public Relations <ul><li>activities that enable an organization to influence a target audience </li></ul><ul><li>often public relations campaigns try to create a favorable image for a company , its products, or its policies </li></ul><ul><li>one of the goals of a public relations program is to cultivate media relations with reporters who cover a specific industry </li></ul>
  13. 13. Writing News Releases <ul><li>although there are many media tools, one of the most important ones is the news release </li></ul><ul><ul><li>a news release is an announcement sent to the appropriate media outlets . </li></ul></ul><ul><ul><li>a release announces newsworthy developments about a companies products or services, distribution channels , facilities and operations, revenues and earnings partners, employees, and events </li></ul></ul>
  14. 14. Publicity <ul><li>involves bringing news or newsworthy information about an organization to the publics attention </li></ul><ul><ul><li>this process is known as placement </li></ul></ul><ul><ul><li>can be launched to achieve various goals, main function is to develop a positive perception or awareness of the organization in the marketplace </li></ul></ul><ul><ul><li>negative publicity can devastate a company or organization </li></ul></ul>
  15. 15. Concept of Promotional Mix <ul><li>Promotional Mix is a combination of strategies and cost effective allocation of resources </li></ul><ul><li>- most companies use more than one type of promotion to achieve their promotional goals </li></ul><ul><li>- a business establishes a promotional mix by following a series of steps that range from identifying the target market to measuring the results </li></ul>
  16. 16. <ul><li>- the strategies of the mix are designed to complement one another </li></ul><ul><li>- advertising and direct marketing create awareness of a business’s product </li></ul><ul><li>- public relations hrlps cultivate a favorable image and brand recognition </li></ul><ul><li> sales promotion activities stimulate sales, reinforce advertising, and support selling efforts </li></ul><ul><li>- personal selling builds on all of these previous efforts by completing the sale </li></ul><ul><li> </li></ul>
  17. 17. <ul><li>Elements of the promotional mix must be coordinated </li></ul><ul><ul><li>- ie. national advertising should be reinforced by local promotional efforts </li></ul></ul><ul><ul><li>*** when promoted products are not available as advertised or when the sales staff is uninformed about a promotion, sales are lost and customers are dissatisfied </li></ul></ul>
  18. 18. Promotional Budget <ul><li>In large companies, the marketing department determines: </li></ul><ul><ul><li>the promotional mix </li></ul></ul><ul><ul><li>establishes the budget </li></ul></ul><ul><ul><li>allocates resources </li></ul></ul><ul><ul><li>coordinates the campaign </li></ul></ul><ul><ul><li>supervises any outside resources </li></ul></ul><ul><ul><li>measures the results </li></ul></ul>
  19. 19. <ul><ul><li>No precise way to measure the exact results of spending promotional dollars </li></ul></ul><ul><ul><li>Often the promotional budget is a percentage of sales </li></ul></ul>
  20. 20. Push-Pull Concept <ul><li>Manufacturer’s often develop a promotional mix for each segment of the distribution channel </li></ul><ul><ul><li>Push Policy - to promote a product to large retailers that sells its products, a manufacturer might want to use a mix of personal selling , advertising, and buying discounts </li></ul></ul><ul><ul><li>** this type of promotion is used only with the next partner in the distribution channel – the manufacturer pushes the product to the retailer </li></ul></ul>
  21. 21. <ul><ul><li>Pull-Policy – directs promotion toward the consumers </li></ul></ul><ul><ul><li>** the same manufacturer might use a different promotional mix of local and national advertising, in-store displays, sales promotion , and public relations to reach consumers </li></ul></ul><ul><ul><li>** the pull policy directs promotion towards consumers and is designed to create consumer interest and demand </li></ul></ul><ul><ul><li>** consumer demand can pull or encourage retailers to carry the product being promoted </li></ul></ul><ul><ul><li>** advertising geared to consumers , in addition to premiums, samples, and demonstrations </li></ul></ul>

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