1. PROMOTION & ADVERTISING Marketing II Chapters 17 & 19

2. What is Promotion? Promotion is persuasive communication Promotion is used to: Inform about products/services Enhance public image/reputation Persuade people Educate people about an issue or trend

3. Product vs. Institutional Product Promotion = convinces people to buy a product instead of competitor’s Promotional Activities: Explain major feature/benefits Communicate where sold? Advertise sales Answer customer questions Introduce new offerings Foster good relations with existing customers

4. Product vs. Institutional Institutional Promotion = used to create a favorable image for a business Institutional Promotion focuses on: Helping a company advocate for change Take a stand on a community issue Foster a favorable image

5. Types of Promotion in the Promotional Mix 1. Personal Selling 2. Advertising 3. Direct Marketing 4. Sales Promotion 5. Public Relations

6. Personal Selling Use of sales representatives Generate and maintain direct contact with prospects and customers Direct contact includes: Personal meetings Telemarketing E-mail contact Correspondence In-store employee/customer interaction

7. Advertising Form of nonpersonal promotion Companies pay to promote ideas, goods or services Examples: Magazines, newspapers, television, buses, websites One-way communication!

8. Direct Marketing Type of advertising One-way communication Product announcements, special promotions, bulletins, customer inquiries and order confirmations Directed to a targeted group of prospects and customers (rather than mass audience) Two forms: Direct Mail – sent via regular mail Electronic Mail

9. Direct Marketing – cont. Goals of Direct Marketing Generate sales or leads for sales representatives to pursue Generates response from targeted customer Coupons, discounts, special merchandise, delivery terms Provides recipients with incentive to respond Visiting store or Website Calling toll-free number Returning a form Sending an email

10. Direct Marketing - regulations Resulted from consumer complaints.. CAN-SPAM Act of 2003 (passed by Congress) Requires senders of unsolicited commercial e-mail to give recipients a way to opt-out Prohibits the use of deceptive subject lines and headers Requires businesses to provide valid return addresses on their emails

11. Sales Promotion Represents ALL marketing activities that are used to stimulate purchasing and sales. Except for: Personal Selling Advertising Public Relations Objectives of Sales Promotions: Stimulate sales Inform potential customers of new products Create positive business/corporate image

12. Sales Promotions – cont. Incentives that encourage customers to buy products or services Can be used to: Encourage customers to try a new product Build awareness Increase purchases Reward loyalty Sales promotions are usually supported by advertising activities Two types: Trade (B2B) or Consumer (B2C)

13. Public Relations vs. Publicity Public Relations Activities that enable an organization to influence a target audience. Create favorable image for the company. GOAL: cultivate media relations with reporters who cover a specific industry. Publicity Bringing newsworthy information about an organization to the public’s attention MAIN FUNCTION: develop a positive perception or awareness of the organization in the marketplace Placement is FREE Message can be positive or negative

14. News Releases An announcement that is sent to the appropriate media outlets Announces newsworthy developments about the company’s: Products/services Distribution channels Facilities & operations Revenues & earnings Partners & employees Events One of the most important media tools

15. Concept of a Promotional Mix Promotional Mix = a combination of strategies and a cost-effective allocation of resources. Why use a promotional mix? How do companies decide which mix will be most effective?

16. Marketing Department’s Role Determines promotional mix Establishes the budget Allocates resources Coordinates the campaign Supervises outside resources Measures results

17. Sample Promotional Mix PROMOTIONAL MIX Type of Promotion Week 1Week 2Week 3Week 4 Estimated Cost Facebook AdXXXX$50.00 Direct MailXX$125.00 Email Distribution XXXX$22.50 MagazineX$300.00 Radio AdsXX$345.00 TOTAL$842.50

18. Push vs. Pull Concept Manufacturer Retailer Consumer PUSH POLICY Types of promotion used Personal Selling, Sales Promotion, Buying Discounts Manufacturer Retailer Consumer PULL POLICY Types of promotion used Local & National Advertising, In-store displays, Samples, Demonstrations

19. SALES PROMOTION

20. Sales Promotions Incentives that encourage customers to buy products/services. Trade Promotions Sales promotion activities designed to gain support from manufacturers, wholesalers, and retailers. Consumer Promotions Sales promotion activities that encourage customers and prospects to buy a product/service.

21. Trade Promotions Sales promotion activities designed to get support for a product from: manufacturers, wholesalers, and retailers More money is actually spent promoting to business versus consumers Good business ethics require that: Trade promotional payments and awards be offered in a uniform manner Terms be clearly spelled out No one be penalized for not achieving the goals

22. Trade Promotions – cont. 1. Promotional Allowances Cash payments or discounts given by a manufacturer to a wholesaler or retailer Rewards performing activities to encourage sales Example: Stocking a large quantity of a product 2. Cooperative Advertising Manufacturer helps retailer by helping to pay the cost of advertising locally

23. Trade Promotions – cont. 3. Slotting Allowances A cash premium paid by manufacturer to help the retailer cover the costs of placing the product on the shelves. Slotting allowance range from a few thousand to several million dollars Slotting allowances: Buy store space Pay for retailer’s discount specials on product Charges for store shelves Penalties for poor sales Store advertising and display costs

24. Trade Promotions – cont. 4. Sales Force Promotions Awards given to dealers and employees who successfully meet or exceed sales quotas Include cash bonuses, merchandise, or travel awards

25. Trade Promotions – cont. 5. Trade Shows and Conventions Showcase a particular line of products Millions of dollars are spent in display booths Provide businesses with opportunity to: Introduce new products Encourage increased sales of existing products Meet customers and partners in the distribution chain Gain continued company and product support

26. BRAINSTORM Take 3 minutes to brainstorm which Trade Promotions might work for your project.

27. Consumer Promotions Sales strategies that encourage customers and prospects to buy a product or service. Consumer promotions support: Advertising Personal Selling Public Relations efforts

28. Consumer Promotions – cont. 1. Coupons Certificates that entitle customers to cash discounts Placed inside/outside of product packages Online printable coupons Stores that accept coupons are reimbursed the face value of the coupon plus handling charges.

29. Consumer Promotions – cont. 2. Premiums Low-cost items given to consumer at a discount or for free Designed to increase sales by building product loyalty and attracting new customers Also used to persuade nonusers to switch brands THREE TYPES: Factory Packs: free gifts placed in product packages (cereal) Traffic Builders: low-cost premiums given away to customers pens, key chains, coffee mugs, etc Coupon Plans: ongoing programs offering a variety of premiums in exchange for labels or coupons obtained from a product or label (UPC labels)

30. Consumer Promotions – cont. 3. Deals Short-term price reductions that are marked directly on the label or package Product bundling (two for price of one) 4. Incentives Higher-priced products earned and given away through contests, sweepstakes and rebates Contests = win scholarships, vacations and money Sweepstakes = games of chance Rebates = discounts given when items is purchased during specific period of time Create customer excitement and increase sales

31. Consumer Promotions – cont. 5. Product Samples Free trial size of a product: Sent through the mail Distributed door-to-door Given away at stores or trade shows Examples: Detergents, shampoos, deodorants and colognes)

32. Consumer Promotions – cont. 6. Sponsorship Sponsoring company pays a fee for the right to promote itself and its products/services at or on a set location Examples: Physical site (stadium), event (concert), group (car racing team), or person (golfer or tennis player) Title sponsor – organization that pays to have its name in the name of the sponsored location Mattel Children’s Hospital UCLA

33. Consumer Promotions – cont. 7. Product Placement Using a brand-name product in a movie, TV show, sporting event, or commercial for another product Helps an organization develop recognition for its products and gain increased exposure

34. Consumer Promotions – cont. 8. Loyalty Marketing Programs Reward customers for patronizing a company Also known as “Frequent Buyer Programs” Airlines: Frequent Flier Miles Hotels: Reward Points (Marriott Rewards Program) Punch cards: 10 th meal free

35. Consumer Promotions – cont. 9. Point-of-Purchase Displays Designed primarily by manufacturers to hold and display their products Usually placed in high-traffic areas and promote impulse purchases

36. BRAINSTORM Take 3 minutes to brainstorm which Consumer Promotions might work for your project.

37. ADVERTISING MEDIA

38. Advertising… The average person is exposed to more than 2,000 advertisements every week! With advertising, the advertiser controls: The message Where it will be seen or heard How often it will be repeated

39. Promotional vs. Institutional Promotional = goal to increase sales Targets consumers or B2B customers Promotional advertising can: Introduce a new business/product/service Advertise an existing one Encourage the use of a particular service Support other efforts such as direct selling, sales promotion activities, visual merchandising, etc. Institutional = goal to create a favorable image & foster goodwill in the marketplace Connecting company name to a worthy cause

40. Mass vs. Targeted Advertising Targeted = reaches select audience Business People General Population Mass = reaches large #’s of people

41. What is MEDIA? MEDIA = the agencies, means, or instruments used to convey advertising messages to the public.

42. Types of MEDIA 1. Print Media Newspaper Magazine Direct Mail Directory Advertising Outdoor Advertising Transit Advertising

43. Newspaper Advertising Local Newspapers Offer a variety of options for size, location, and frequency of ads Shopper Delivered free to residents who live in specific areas National Newspapers USA Today, Wall Street Journal Reach entire circulation or specific regions Online Options Local & National papers have online editions

44. Newspaper Advertising cont. ADVANTAGES 55% of adults in the U.S. read the paper DAILY! Reach is known Advertisers can target certain areas of the country, or different neighborhoods Reponses to ads and coupons easily tracked Relatively LOW COST! DISADVANTAGES Some newspapers are distributed to subscribers outside of the target market Limited shelf life – thrown away daily Limited color – primarily black ink Less visually appealing

45. Magazine Advertising Distributed locally, regionally & nationally National: U.S. News, Time, Newsweek Regional: Southern Living Local: Kansas City Homes & Gardens Published weekly, monthly & quarterly Readership based on personal pleasure or interest: TV Guide, People, Reader’s Digest, Sports Illustrated Advertising Age, Women’s Wear Daily

46. Magazine Advertising cont. ADVANTAGES Longer life span than newspapers People keep magazine around their home/office Higher chance that ads are reread or passed ot others Read more slowly and thoroughly than newspapers Printed in color and have better quality Variety of presentation formats DISADVANTAGES Cost is higher than newspapers Printed a month or two before publication Requires careful planning!

47. Direct Mail Advertising Highly focused form of advertising Two Types of Direct Mail 1. Printed & sent to home or business Newsletters, Catalogs, Coupons, Samplers, Price List, etc. 2. Electronic & sent to email address Same as printed Direct Marketing Great way to keep customers aware of new products, services and upcoming sales Most effective with existing customers!

48. Direct Mail Advertising cont. ADVANTAGES High ly selective Wide choice of printed ad formats Limited only by postal regulations Includes electronic campaigns Allows for testing DISADVANTAGES Low level of response 10% = excellent! Image problem Junk Mail Cost can be high Producing Printing Mailing List Postage

49. Directory Advertising Best example = telephone directory Yellow pages Businesses pay for an alphabetical listing Display ads can be purchased if desired

50. Directory Advertising cont. ADVANTAGES Relatively inexpensive Used to target all demographic groups Found in 98% of American households Kept for at least a year DISADVANTAGES Long shelf life Advertisers cannot adjust their information Offers may change within the year

51. Outdoor Advertising Local, Regional & National businesses use outdoor signs for advertising Two types of outdoor signs: Nonstandardized Used by companies at their place of business or another location throughout the country Example: Logo at entrance of office building Standardized Purchased from advertising companies Provided only in standard sizes Example: Billboards, Posters, Painted Bulletins, Spectaculars

52. Outdoor Advertising Standardized Billboards Posters Pre-printed sheets put up like wall paper on a wall or billboard Changed 3-4 times per year Painted Bulletins Painted signs Changed every 6 months to a year Spectaculars Outdoor signs purchased or rented from an advertising company Use lights or moving parts to attract attention

53. Outdoor Advertising cont. ADVANTAGES Highly visible Relatively inexpensive 24/7 message Can be located strategically to reach specific target market DISADVANTAGES Limited viewing time Hard to target specific market Increasing governmental regulations

54. Transit Advertising Transit Advertising Includes: Ads found on public transportation Printed posters inside trains, taxis, and buses Ads on public benches, bus stop shelters Ads on kiosks, newsstands and trash cans Station Advertising: Subway, Rail, Bus & Airline Terminals Advantages: Reaches a wide, captive audience Economical

55. BRAINSTORM Take 3 minutes to brainstorm which Print Media might work for your project.

56. Types of MEDIA 2. Broadcast Media Television Radio

57. Television & Radio Advertising Average person spends nearly 10 years (out of 70 year life) watching television!! 98 million homes have a television set Out of these, 66% have cable There are 11,600 local cable stations Local stations are affiliated with major networks: ABC, CBS, NBC or FOX Average person spends nearly 6 years listening to the radio!

58. Television Advertising Ultimate Advertising Medium for many businesses! Combines all creative elements to produce compelling message Sight, sound, action & color Very effective for demonstrating a product’s features & benefits Television advertising allows companies to direct messages to audiences with specified interest News, movies, sports, reality TV, etc. Most television advertisements are 30-60 seconds long Exception: Infomercial

59. Television Advertising cont. ADVANTAGES Combines all creative elements: Sight Sound Action Color DISADVANTAGES Highest production cost of any type of media High purchase cost Prime-time & special events may be too expensive Super Bowl Academy Awards

60. Radio Advertising More than 10,000 AM/FM station reach 96% of all people ages 12+ in a week! Ability to reach wide audience Extremely efficient Cost effective Mobile medium Heard anywhere Timely message Updated hourly – immediate! Targeted message Radio Stations target a specific segment of market Variety of message 10, 20, 30, or 60 second time periods Encourage people to buy using music, jingles, slogans, sound effects, etc.

61. Radio Advertising cont. ADVANTAGES Mobile medium Heard anywhere Timely updates Immediate! Targeted audience Encourage people to buy through music, jingles, sound effects Lower cost than television DISADVANTAGES Products/services can only be described, not seen. Cannot rely on listener’s attention Short life span

62. BRAINSTORM Take 3 minutes to brainstorm which Broadcast Media might work for your project.

63. Types of MEDIA 3. Online Advertising Banner & Pop-Up Ads

64. Online Advertising Form of advertising that uses email or the World Wide Web Small part of overall ad spending, but GROWING! Electronic direct mail advertising is sent via email. Sent to pre-qualified groups of people Opt-in email = recipients request or authorize it VERY COST EFFECTIVE

65. Banner & Pop Up Ads Banner Ads Most online advertising appear as banner ads. Various shapes & sizes Usually in a rectangle Button Ads Similar to banner ads, but smaller in size Placed in strategic place on Web page Pop Up Interstitial Ads TV-like spots that pop up between Web pages and are inserted in audio or video streams Live or on demand. Use must click on ad to link to advertiser’s Web site or close window to resume surfing

66. Online Advertising cont. ADVANTAGES Bold colors Top of page placement Animation Calls to action Limited number of exposures = increased click-throughs DISADVANTAGES Response rates as low as 1% Only 1/100 actually click-through to visit the advertiser’s site.

67. BRAINSTORM Take 3 minutes to brainstorm which Online Advertising might work for your project.

68. Types of MEDIA 4. Specialty Media Giveaways or advertising specialties! Relatively inexpensive Useful items featuring the advertiser’s name or logo Items must be practical and used frequently Placed in locations with high visibility Examples: Pens, Pencils, Calendars, Mugs, Hats, etc.

69. Specialty Media cont. ADVANTAGES Relatively inexpensive Promotes company name or logo DISADVANTAGES Distribution of items is limited Items might be given to people who will never consider buying the product.

70. Types of Media 5. Other Advertising Media In-Store Advertising: Electronic shelf ads Supermarket cart displays Instant coupon machines Floor mats Sound systems

71. PROJECT TIME! Use all of the information you have just learned on Promotion and Advertising to complete new sections of your project.