Notes: For goods and services to survive in the marketplace, effective promotion is needed to inform, persuade, and remind potential buyers of a product.
Notes: 1. Promotional strategy is a plan for using promotion effectively.
Notes: As Exhibit 14.1 shows, the marketing manager determines the goals of the promotional strategy in light of the firm’s overall goals for the marketing mix. Using the overall goals, marketers combine the elements of the promotional strategy into a coordinated plan. This plan becomes an integral part of the marketing strategy for reaching the target market. The main function of promotional strategy is to convince target customers that the goods and services offered provide a competitive advantage over the competition.
Notes: The main function of a marketer’s promotional strategy is to convince the target market that the goods and services offered provide a competitive advantage. A competitive advantage is the set of unique features of a company and its products that are perceived as superior over the competition. These features are listed on this slide. Discussion/Team Activity: Discuss companies and products that demonstrate a competitive advantage based on the features shown above.
Notes: Most promotional strategies use several components of promotion, which may include advertising, public relations, sales promotion, and personal selling to reach the target market. The more emphasis is placed on a particular promotional element, the more important that element is considered to be in the overall promotional mix. A discussion of each of the promotional mix elements follows.
Notes: Almost all companies use some form of advertising, ranging from a newspaper classified ad to a multimillion-dollar campaign.
Notes: Media choices are plentiful and fragmented. In addition to the traditional advertising media, new methods are being used to reach consumers. Internet advertising is being increasingly used as a vital component. Banner ads, viral marketing, and interactive promotions are all ways to reach the target audience. Discussion/Team Activity: Some consumers and lawmakers feel that consumer privacy is being violated with Internet advertising methods. Discuss this as a class. Refer to the “Ethics in Marketing” box.
Notes: Advertising has the advantage of being able to reach larger numbers of people, but it can also be microtargeted to small groups. Although the cost per contact in advertising is low, the total cost to advertise is typically very high. Only financially able companies can afford to advertise on a national basis.
Notes: Many organizations spend large amounts of money to build a positive public image. Public relations help an organization communicate with stockholders, customers, suppliers, government, employees, and the community.
Notes: Public relations is used to maintain a positive image, as well as the functions shown on this slide. Nothing sells a product better than free publicity, but publicity should not be viewed as free. Preparing news releases, staging events, persuading media personnel to print or broadcast them costs money. Discussion/Team Activity: Discuss current examples of publicity regarding organizations.
Notes: Sales promotion is generally a short-run tool used to stimulate immediate increases in demand. Sales promotion is used to improve the effectiveness of other ingredients in the promotion mix, especially advertising and personal selling. Online Nabisco Nabisco lists its promotions on its Web site. What do you think the advantages and disadvantages of this technique are? What changes, if any, would you suggest?
Notes: Sales promotion can be aimed at end consumers, trade customers, or a company’s employees. A major promotional campaign might use several of the tools shown on this slide, along with the other elements of the promotion mix. Discussion/Team Activity: Discuss a few recent product releases. What sales promotion techniques were used to complement the other components of the marketing mix? What techniques make sales promotion efforts effective on college campuses?
Notes: Personal selling is a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other. Both buyer and seller have specific objectives: the buyer may need to minimize cost or assure a quality product, while the salesperson may need to maximize revenue and profits.
Notes: Traditional methods of personal selling include a planned presentation to one or more prospective buyers. The seller tries to persuade the buyer to accept a point of view or take action. Frequently, the traditional view of personal selling creates a win-lose outcome at the expense of the buyer. Relationship selling emphasizes a win-win outcome and the accomplishment of mutual objectives that benefit both buyer and salesperson in the long-term. The goal is a long-term, committed relationship based on trust and customer loyalty. Personal selling is increasingly dependent on the Internet to attract potential buyers seeking information.
Online: McDonald’s How is McDonald's encoding messages at its Web site in order to communicate its marketing message? To whom is its message designed to appeal? Do you think the approach will be effective at improving sales of food products and/or increasing brand loyalty? Why or why not? Notes: Promotional strategy is closely related to the process of communications. As humans we assign meaning to feelings, ideas, facts, attitudes, and emotions. When a company develops a new product, changes an existing one, or tries to increase sales, it must communicate its selling message to potential customers.
Notes: Communication can be divided into two major categories: Interpersonal communication is direct, face-to-face communication between two or more people. Mass communication refers to communicating a concept or message to larger audiences, usually through a mass medium such as television or newspapers. When a company advertises, it does not know the consumers personally, nor is it able to respond immediately to reactions to the advertising message. Instead the marketing manager must wait and see how people are reacting to the mass-communicated promotion. Any clutter from competitors’ messages or other distractions can reduce the effectiveness of the mass communication effort.
Notes: Marketers are both senders and receivers of messages. As senders, marketers inform, persuade, and remind the target market to adopt courses of action. As receivers, marketers attune themselves to the target market in order to develop and adapt messages, and spot new communication opportunities. Marketing communication is a two-way process.
Notes: Marketing communication is a two-way process, as shown in Exhibit 14.2. The sender originates the message. Encoding is the conversion of the sender’s ideas and thoughts into a message, usually words or signs. Transmission of a message requires a channel—some communication medium. Reception occurs when the message is detected by the receiver. Transmission may be hindered because of noise—anything that interferes with, distorts, or slows down the transmission of information. Decoding is the interpretation of the language and symbols sent. Proper match between the message to be conveyed and the target market’s attitude is the job of the marketing manager. Differences in culture, age, social class, education, and ethnicity can lead to miscommunication. Marketers targeting consumers in foreign countries must also worry about translation and miscommunication issues. The receiver’s response to a message is direct feedback to the source. Since mass communicators are cut off from direct feedback, they rely on market research or analysis of viewer perceptions for indirect feedback.
Notes: The four elements of the promotional mix differ in their ability to affect the target audience. Exhibit 14.3 summarizes these differences. A deeper treatment of each element appears over the next four slides.
Notes: The Internet and related technologies are having an impact on marketing communication including the promotion mix. The rise of blogging has created a new way for marketers to manage their image, connect with consumers, and generate product interest and desire.
Notes: Promotion seeks to modify behavior and thoughts in some way. It also strives to reinforce existing behavior. Promotion has three basic tasks: it can inform the target audience, persuade the target audience, or remind the target audience. Often a marketer will try to accomplish two or more of these tasks at the same time.
Notes: The informing phase of promotion seeks to convert an existing need into a want or to stimulate interest in a new product. It is more prevalent during the early stages of the product life cycle. Persuasive promotion is designed to stimulate a purchase or an action. It becomes the main promotion goal when the product enters the growth stage of its life cycle. Reminder promotion is used to keep the product/brand name in the public’s mind. It is effective during the maturity cycle. A discussion of each category follows. Discussion/Team Activity: Name products/brands and discuss the stage of their product life cycle. Categorize the type of promotion—informative, reminder, or persuasive-- that is used in the product/brand promotional mix.
Notes: The goal of any promotion is to get someone to buy a good or service, or take some action. A classic model for reaching promotional goals is called the AIDA concept—attention, interest, desire, and action—the stages of consumer involvement. This model proposes that consumers respond to marketing messages in a cognitive--thinking, affective--feeling, and conative--doing sequence.
Online: NASCAR Kellogg’s What kind of promotions are coming out of the relationship between Kellogg’s cereals and NASCAR racing? How successful do you think NASCAR promotions will be in selling cereal? How effective will Kellogg’s promotions be in increasing the number of NASCAR fans?
Notes: Exhibit 14.4 shows the relationship between the AIDA model and the promotional mix. For example, advertising is most useful in gaining attention for goods. In contrast, personal selling reaches fewer people at first. Salespeople are more effective at creating customer interest, in creating desire, and taking action. Public relations is best at gaining attention for a company, a good or service. Sales promotion’s greatest strength is in creating strong desire and purchase intent (action).
Notes: Promotional mixes vary a great deal from one product and one industry to the next. Advertising and personal selling are used to promote goods and services, supplemented by sales promotion. Public relations helps develop a positive image for the product and the organization. A firm may choose not to use all four promotional elements, or it may choose to use them in varying degrees. This slide shows the factors affecting the promotion mix chosen by a firm. Subsequent slides describe the key points of each factor.
Notes: The Product Life Cycle is a factor in designing a promotion mix, as shown in Exhibit 14.5. In the introduction stage, the basic goal of promotion is to inform the target audience of product availability. Advertising and public relations inform the target audience, while sales promotion encourages early trial. Personal selling gets retailers to carry the product. During the growth stage, advertising and public relations continue to be important, although sales promotion can be reduced because customers need fewer incentives to purchase. The promotional strategy is to emphasize the product’s differential competitive advantage. Persuasive promotion is used to build and maintain brand loyalty. Personal selling has succeeded in obtaining adequate distribution for the product. In the maturity stage, competition becomes fiercer, and persuasive and reminder advertising are more strongly emphasized. Sales promotion comes back into focus to try to increase market share. As the product enters the decline stage, all promotion, especially advertising, is reduced. Nevertheless, personal selling and sales promotion efforts may be maintained, particularly at the retail level.
Notes: For a routine buying decision such as the purchase of toothpaste, the most effective promotional tools are advertising and especially sales promotion. For buying decisions that are not routine or complex, advertising and public relationships help establish awareness. In contrast, consumers making complex decisions need large amounts of information, and personal selling is the most effective tool. Print ads are also effective for conveying large amounts of information. Discussion/Team Activity: Consider recent purchases of routine and complex products. What promotion tool(s) were effective to reach the buyer and influence the purchase decision?
Notes: When funds are available to permit a mix of promotional elements, a firm will try to optimize its return on promotion dollars while minimizing the cost per contact. The cost per contact is high for personal selling, public relations, and sales promotions. On the other hand, the cost per contact is low for national advertising since it reaches a large number of people. There is a trade-off among the funds available, the number of people in the target market, the quality of communication needed, and the relative costs of the promotional elements.
Notes: Manufacturers may use aggressive personal selling and trade advertising to convince a wholesaler/retailer to carry and sell their merchandise. This is known as a push strategy . The wholesaler, in turn, pushes the merchandise forward by persuading the retailer to handle the goods. The retailer uses advertising and other forms of promotion to convince customers to buy the “pushed” products. At the other end is a pull strategy , which stimulates consumer demand to obtain product distribution. The manufacturer uses a pull strategy by focusing promotional efforts on end consumers and opinion leaders. The wholesaler then places an order for the “pulled” merchandise from the manufacturer. Consumer demand pulls the product through the channel of distribution. A company typically uses a mix of push and pull strategies. The Push and Pull strategies are diagrammed in Exhibit 14.6. Discussion/Team Activity: Discuss products and/or industries that utilize push and/or pull strategies in their promotion mix.
Integrated Marketing Communication
CHAPTER 14 Integrated Marketing Communications Designed by Eric Brengle B-books, Ltd. Prepared by Deborah Baker Texas Christian University Introduction to Marketing McDaniel, Lamb, Hair 9
Learning Outcomes Discuss the role of promotion in the marketing mix Discuss the elements of the promotional mix Describe the communication process LO I LO 2 LO 3
Learning Outcomes Explain the goal and tasks of promotion Discuss the AIDA concept and its relationship to the promotional mix Describe the factors that affect the promotional mix Discuss the concept of integrated marketing communications LO 5 LO 6 LO 7 LO 4
The Role of Promotion in the Marketing Mix Discuss the role of promotion in the marketing mix LO I
The Role of Promotion Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. LO I Promotion
The Role of Promotion LO I Promotional Strategy A plan for the optimal use of the elements of promotion: <ul><li>Advertising </li></ul><ul><li>Public Relations </li></ul><ul><li>Sales Promotion </li></ul><ul><li>Personal Selling </li></ul>Competitive Advantage
The Role of Promotion in the Marketing Mix LO I Overall Marketing Objectives <ul><li>Marketing Mix </li></ul><ul><li>Product </li></ul><ul><li>Place </li></ul><ul><li>Promotion </li></ul><ul><li>Price </li></ul>Target Market <ul><li>Promotional Mix </li></ul><ul><li>Advertising </li></ul><ul><li>Public Relations </li></ul><ul><li>Sales Promotion </li></ul><ul><li>Personal Selling </li></ul><ul><li>Promotion Plan </li></ul>
Competitive Advantage LO I Unique features Excellent service Low prices Rapid delivery High product quality
REVIEW LEARNING OUTCOME The Role of Promotion in the Marketing Mix LO I
The Promotional Mix Discuss the elements of the promotional mix LO 2
The Promotional Mix LO 2 Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals. <ul><li>Advertising </li></ul><ul><li>Public Relations </li></ul><ul><li>Sales Promotion </li></ul><ul><li>Personal Selling </li></ul>Promotional Mix
The Promotional Mix LO 2 Impersonal, one-way mass communication about a product or organization that is paid for by a marketer. Advertising
Advertising Media LO 2 Traditional Advertising Media New Advertising Media <ul><li>Television </li></ul><ul><li>Radio </li></ul><ul><li>Newspapers </li></ul><ul><li>Magazines </li></ul><ul><li>Books </li></ul><ul><li>Direct mail </li></ul><ul><li>Billboards </li></ul><ul><li>Transit cards </li></ul><ul><li>Internet </li></ul><ul><li>Banner ads </li></ul><ul><li>Viral marketing </li></ul><ul><li>E- mail </li></ul><ul><li>Interactive video </li></ul>
Advertising <ul><li>Reach large number of people </li></ul><ul><li>Low cost per contact </li></ul><ul><li>Can be micro- targeted </li></ul>LO 2 <ul><li>Total cost is high </li></ul><ul><li>National reach is expensive for small companies </li></ul>Advantages Disadvantages
Public Relations LO 2 The marketing function that evaluates public attitudes, identifies areas within the organization that the public may be interested in, and executes a program of action to earn public understanding and acceptance. Public Relations
<ul><li>Jaguar is giving an $80,000 Jaguar XK to a select group of “beautiful people”--just to be seen in it </li></ul><ul><li>It is reality-based product placement—where real life blurs seamlessly into advertising </li></ul><ul><li>The success of the campaign is “how many people touch and see the car” </li></ul>Reality-Based Product Advertising LO 7 SOURCE: Gina Chon, “Jaguar Tries a Living Product Placement ,” Wall Street Journal, June 29, 2006, B1.
The Function of Public Relations <ul><li>Maintain a positive image </li></ul><ul><li>Educate the public about the company’s objectives </li></ul><ul><li>Introduce new products </li></ul><ul><li>Support the sales effort </li></ul><ul><li>Generate favorable publicity </li></ul>LO 2
Sales Promotion LO 2 Marketing activities--other than personal selling, advertising, and public relations--that stimulate consumer buying and dealer effectiveness. Sales Promotion Online http://www.nabiscoworld.com
Sales Promotion LO 2 End Consumers Trade Customers Company Employees Free samples Contests Premiums Trade Shows Vacation Giveaways Coupons
Personal Selling LO 2 Personal Selling Planned presentation to one or more prospective buyers for the purpose of making a sale.
Personal Selling LO 2 Traditional Selling Relationship Selling
REVIEW LEARNING OUTCOME Elements of the Promotional Mix LO 2
Marketing Communication Describe the communication process LO 3
Communication LO 3 The process by which we exchange or share meanings through a common set of symbols. Communication Online http://www.mcdonalds.com
Marketing Communication LO 3 Categories of Communication Interpersonal Communication Mass Communication
Marketing Communication LO 3 As Senders As Receivers <ul><li>Develop messages </li></ul><ul><li>Adapt messages </li></ul><ul><li>Spot new communication opportunities </li></ul><ul><li>Inform </li></ul><ul><li>Persuade </li></ul><ul><li>Remind </li></ul>
The Communication Process LO 3 Noise Sender Encoding Message Feedback Channel Message Channel Decoding Message Receiver
Characteristics of the Elements in the Promotional Mix LO 3
Characteristics of the Elements in the Promotional Mix LO 3 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Advertising Indirect and impersonal Low Little Delayed One-way Yes Yes Fast Same message to all audiences
Characteristics of the Elements in the Promotional Mix LO 3 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Public Relations Usually indirect, impersonal Moderate to low Little Delayed One-way No No Usually fast Usually no direct control
Characteristics of the Elements in the Promotional Mix LO 3 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Sales Promotion Usually indirect and impersonal Moderate to low Little to moderate Varies Mostly one-way Yes Yes Fast Same message to varied target
Characteristics of the Elements in the Promotional Mix LO 3 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Personal Selling Direct and face-to-face High Much Immediate Two-way Yes Yes Slow Tailored to prospect
The Impact of Blogging LO 3 Corporate Blogs Sponsored by a company or one of its brands and maintained by one or more of the company’s employees. Noncorporate Blogs Independent and not associated with the marketing efforts of any particular company or brand.
REVIEW LEARNING OUTCOME The Communication Process LO 3
The Goals and Tasks of Promotion Explain the goals and tasks of promotion LO 4
Goals and Tasks of Promotion LO 4 Informing Reminding Persuading Target Audience Online http://www.tide.com
Goals and Tasks of Promotion LO 4 Informing Reminding Persuading Target Audience PLC Stages : Introduction Early Growth PLC Stages: Growth Maturity PLC Stages: Maturity
Goals and Tasks of Promotion LO 4 <ul><li>Increase awareness </li></ul><ul><li>Explain how product works </li></ul><ul><li>Suggest new uses </li></ul><ul><li>Build company image </li></ul>Informative Promotion
Goals and Tasks of Promotion LO 4 <ul><li>Encourage brand switching </li></ul><ul><li>Change customers’ perceptions of product attributes </li></ul><ul><li>Influence immediate buying decision </li></ul><ul><li>Persuade customers to call </li></ul>Persuasive Promotion
Goals and Tasks of Promotion LO 4 <ul><li>Remind customers that product may be needed </li></ul><ul><li>Remind customers where to buy product </li></ul><ul><li>Maintain customer awareness </li></ul>Reminder Promotion
Promotional Goals and the AIDA Concept Discuss the AIDA concept and its relationship to the promotional mix LO 5
The AIDA Concept LO 5 Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. AIDA Concept Attention Interest Desire Action
The AIDA Concept LO 5 Online LO 5 Action Desire Interest Attention Cognitive (thinking) Affective (feeling) Conative (doing) http://www.nascar.com http://www.kelloggs.com Online
Factors Affecting the Promotional Mix Describe the factors that affect the promotional mix LO 6
Factors Affecting the Choice of Promotional Mix LO 6 Nature of the product Stage in PLC Target market factors Type of buying decision Promotion funds Push or pull strategy
Stage in the Product Life Cycle LO 6 Light Advertising; pre- introduction publicity Heavy use of Advertising; PR for awareness; sales promotion for trial AD/PR decrease; limited sales promotion; personal selling for distribution Ads decrease; sales promotion; personal selling; reminder & persuasive Advertising, PR, brand loyalty; personal selling for distribution Introduction Growth Maturity Decline Sales ($) Time
Target Market Characteristics LO 6 <ul><li>For… </li></ul><ul><li>Widely scattered market </li></ul><ul><li>Informed buyers </li></ul><ul><li>Brand-loyal repeat purchasers </li></ul>Advertising Sales Promotion Less Personal Selling
Type of Buying Decision LO 6 Advertising Sales Promotion Routine Personal Selling Neither Routine nor Complex Advertising Public Relations Print Advertising Complex
<ul><li>Trade-offs with funds available </li></ul><ul><li>Number of people in target market </li></ul><ul><li>Quality of communication needed </li></ul><ul><li>Relative costs of promotional elements </li></ul>Available Funds LO 6
Push and Pull Strategies LO 6 Manufacturer promotes to wholesaler Wholesaler promotes to retailer Retailer promotes to consumer Consumer buys from retailer PUSH STRATEGY Orders to manufacturer Manufacturer promotes to consumer Consumer demands product from retailer Retailer demands product from wholesaler Wholesaler demands product from manufacturer Orders to manufacturer PULL STRATEGY
REVIEW LEARNING OUTCOME Factors Affecting Promotional Mix LO 6
Integrated Marketing Communications Discuss the concept of integrated marketing communications LO 7
Integrated Marketing Communications LO 7 Integrated Marketing Communications The careful coordination of all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer.
<ul><li>Proliferation of thousands of media choices </li></ul><ul><li>Fragmentation of the mass market </li></ul><ul><li>Slash of advertising spending in favor of promotional techniques that generate immediate response </li></ul>IMC Popularity Growth LO 7
REVIEW LEARNING OUTCOME Integrated Marketing Communications LO 7