Chapter 7 Promotion PDF

CHAPTER 7 Promotion LEARNING OUTCOMES 7.1 The role of promotion in marketing mix 7.2 The goals of promotion 7.3 The AIDA concept 7.4 The promotional mix 7.5 Factors affecting promotional mix 7.6 Advertising 7.6.1 Major types of advertising 7.6.2 Media types 7.7 Public Relations...

CHAPTER 7 Promotion LEARNING OUTCOMES 7.1 The role of promotion in marketing mix 7.2 The goals of promotion 7.3 The AIDA concept 7.4 The promotional mix 7.5 Factors affecting promotional mix 7.6 Advertising 7.6.1 Major types of advertising 7.6.2 Media types 7.7 Public Relations 7.7.1 Major public relations tools 7.8 Sales Promotion 7.8.1 Tools for consumer sales promotion 7.9 Personal Selling 7.9.1 Advantages of personal selling 7.9.2 Steps in the selling process LO 1 : The role of promotion in marketing mix LO 1 : The role of promotion in marketing mix An effective promotion is the communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence their opinion or elicit a response. Marketing manager determines the goals of the company’s promotional strategy in light of the firm’s overall goals for the marketing mix—product, place (distribution), promotion, and price. The main function of a marketer’s promotional strategy is to convince target customers that the goods and services offered provide a competitive advantage over the competition. LO 2 : The goals of promotion Informing - Informative promotion seeks to convert an existing need into a want or to stimulate interest in a new product. It is generally more prevalent during the early stages of the product life cycle. Persuading - Persuasive promotion is designed to stimulate a purchase or an action. Persuasion normally becomes the main promotion goal when the product enters the growth stage of its life cycle. Reminding - Reminder promotion is used to keep the product and brand name in the public’s mind. This type of promotion prevails during the maturity stage of the life cycle. LO 2 : The goals of promotion LO 3 : The AIDA concept AIDA concept A model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message; the acronym stands for attention, interest, desire, and action.  LO 4 : The promotional mix Advertising is any form of impersonal (one-way) paid communication in which the sponsor or company is identified. Public relations is the marketing function that evaluates public attitudes, identifies areas within the organization the public may be interested in, and executes a program of action to earn public understanding and acceptance. Personal selling is a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other. Sales promotion consists of all marketing activities—other than personal selling, advertising, and public relations—that stimulate consumer purchasing and dealer effectiveness. LO 4 : The promotional mix LO 5 : Factors affecting promotional mix LO 5 : Factors affecting promotional mix Nature of the Product Characteristics of the product itself can influence the promotional mix. Consumer products generally require the selling efforts promoted mainly through advertising to create brand familiarity. Television and radio advertising, consumer-oriented magazines, and the Internet and other highly targeted media are used extensively to promote consumer goods, especially nondurables. Sales promotion, the brand name, and the product’s packaging are about twice as important for consumer goods as for business products. Persuasive personal selling is important at the retail level for shopping goods such as automobiles and appliances LO 5 : Factors affecting promotional mix Stages in the Product Life Cycle LO 5 : Factors affecting promotional mix Target Market Characteristics A target market characterized by widely scattered potential customers, highly informed buyers, and brand-loyal repeat purchasers generally requires a promotional mix with more advertising and sales promotion and less personal selling. Type of Buying Decision The promotional mix also depends on the type of buying decision (routine or complex). For example, the most effective promotion for routine consumer decisions, like buying toothpaste or soft drinks, calls attention to the brand or reminds the consumer about the brand. Advertising and, especially, sales promotion are the most productive promotion tools to use for routine decisions. LO 5 : Factors affecting promotional mix Available Funds Money, or the lack of it, may easily be the most important factor in determining the promotional mix. A small, undercapitalized manufacturer may rely heavily on free publicity if its product is unique. Push and Pull Strategies The last factor that affects the promotional mix is whether to use a push or a pull promotional strategy. Push strategy - Manufacturers may use aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell their merchandise. Pull strategy - which stimulates consumer demand to product distribution.  LO 6 : Advertising Major types of advertising LO 6 : Advertising Major types of advertising Institutional Advertising - also known as corporate advertising, promotes the corporation as a whole and is designed to establish, change, or maintain the corporation’s identity. It usually does not ask the audience to do anything but maintain a favorable attitude toward the advertiser and its goods and services. Product Advertising - promotes the benefits of a specific good or service. The product’s stage in its life cycle often determines which type of product advertising is used: pioneering advertising, competitive advertising, or comparative advertising. LO 6 : Advertising Pioneering Advertising Intended to stimulate primary demand for a new product or product category. Heavily used during the introductory stage of the product life cycle Competitive Advertising Firms use competitive or brand advertising when a product enters the growth phase of the product life cycle and other companies begin to enter the marketplace. Comparative Advertising Directly or indirectly compares two or more competing brands on one or more specific attributes. LO 6 : Advertising Media types LO 7 : Public Relations Major public relations tools New-Product Publicity Product Placement Consumer Education Sponsorships Internet Web Sites is instrumental in Marketers Some major firms a company spends are used to introducing new are increasingly believe that money to support an introduce new products and using product educated issue, cause, or products, promote services. Publicity placement to consumers are event that is existing products, can help advertisers reinforce brand better, more loyal consistent with obtain consumer explain what’s awareness and customers. corporate objectives, feedback, post news different about their create favorable such as improving releases, new product by attitudes. brand awareness or communicate prompting free news enhancing corporate legislative and stories or positive image. regulatory word of mouth about information, it. showcase upcoming events, provide links to related sites, release financial information, interact with customers and potential customers. Tools for Consumer sales promotion Coupons and Rebates Premium Loyalty Marketing A coupon is a certificate that An extra item offered to the Programs entitles consumers to an consumer, usually in A form of reward towards loyal immediate price reduction exchange for some proof that consumers for making when they buy the product. the promoted product has multiple purchases. The Rebates are similar to been purchased. Premiums objective of loyalty marketing coupons in that they offer the reinforce the consumer’s programs is to build long- purchaser a price reduction; purchase decision, increase term, mutually beneficial however, because the consumption, and persuade relationships between a purchaser must mail in a nonusers to switch brands. company and its key rebate form and usually customers. some proof of purchase, the reward is not as immediate.  Tools for Consumer sales promotion Contests and Sweepstakes Sampling Point-of-purchase (P-O-P) Online sales promotions Designed to create interest in a Consumers generally perceive promotion Expanded dramatically in good or service, often to a certain amount of risk in trying Includes any promotional recent years. Marketers are encourage brand switching. new products. Many are afraid display set up at the retailer’s now spending billions of dollars Contests are promotions in of trying something they will not location to build traffic, annually on such promotions. which participants use some like (such as a new food item) advertise the product, or induce Sales promotions online have skill or ability to compete for or spending too much money impulse buying. Point-of- proved effective and cost- prizes. A consumer contest and getting little reward. purchase promotions include efficient, generating response usually requires entrants to Sampling enables customers to shelf “talkers”, shelf extenders, rates three to five times higher answer questions, complete try a product risk-free. ads on grocery carts and bags, than off-line promotions. The sentences, or write a paragraph end-aisle and floor-stand most effective types of online about the product and submit displays, television monitors at sales promotions are free proof of purchase. Winning a supermarket checkout merchandise, sweepstakes, sweepstakes, on the other counters, in-store audio free shipping with purchases, hand, depends on chance or messages, and audiovisual and coupons luck, and participation is free. displays. LO 9 : Personal Selling Advantages of personal selling 1. It provides a detailed explanation or demonstration of the product. This capability is especially needed for complex or new goods and services. 2. The sales message can be varied according to the motivations and interests of each prospective customer. Moreover, when the prospect has questions or raises objections, the salesperson is there to provide explanations. 3. It can be directed only to qualified prospects. Other forms of promotion include some unavoidable waste because many people in the audience are not prospective customers. 4. Costs can be controlled by adjusting the size of the sales force (and resulting expenses) in one-person increments. 5. Is considerably more effective than other forms of promotion in obtaining a sale and gaining a satisfied customer. LO 9 : Personal Selling Steps in the selling process