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Performance Indicator

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Presentation on theme: "Performance Indicator"— Presentation transcript:

1 4.01 Acquire a foundational knowledge of promotion to understand its nature and scope. PR:001
Performance Indicator (A.) Explain the role of promotion as a marketing function

2 The role of promotion is to help a business/company achieve its marketing goals. For most businesses the basics marketing goals are to sell products and make a profit. Promotion helps businesses reach their goals by communicating with potential customers. Companies rely on promotion to inform people about their products and services.

3 Lesson opener: Choose a product you’ve purchased within the last several months. What made you want or need to buy it? How did you hear about the product? How did you know where to buy to product? How did you know about the price or how much it would cost?

4 Promotion is: 1. Promotion is marketing communication
Promotion is: 1. Promotion is marketing communication. In other words, promotion is the business of communicating with customers. It will provide information that will assist them in making a decision to purchase a product or service. The razzmatazz, pace and creativity of some promotional activities are almost alien to normal business activities.

5 2. Promotion is a marketing function needed to communicate information about goods, services, images, and/or ideas to achieve a desired outcome.

6 3. Promotion is the element of the marketing mix that encourages customers to buy or to have certain views or opinions about goods, services, images, and/or ideas.

7 What does promotion communicate?
Answer: Businesses communicate messages to their customers who receive the message. The message is to tell customers about certain goods, services, or ideas, and persuades the customers to buy or to form an opinion.

8 Have students describe a commercial or ad that they have seen recently, and explain what the commercial or ad communicated to them. Can you think of some promotions that caught your attention?

9 . List users of promotion
Any organization that has something to sell uses promotion at one time or another. Nearly all organizations, whether for-profit or not-for-profit, in all types of industries, must engage in some form of promotion. Such efforts may range from multinational firms spending large sums on securing high-profile celebrities to serve as corporate spokespersons to the owner of a one-person enterprise passing out business cards at a local businessperson’s meeting.

10 Activities What does your school sell? What does a university sell? What does your doctor’s office sell? What do Presidential candidates sell?

11 Describe the benefits of using promotion
1. Promotion benefits: a. Companies/organizations/businesses b. Customers c. The economy

12 2. Promotion benefits by:
a. Creating increased sales b. Giving a company or product a strong position Companies use product promotion to convince potential customers to select their products or services instead of a competitor’s brands. c. Increasing customer loyalty Product promotion helps companies’ foster good relations with existing customers, thereby enhancing customer loyalty.

13 d. Increasing the awareness of a company/product
Through a company’s web site, promotion provides customers with product and general information, answers questions, provides news, and sometimes shows the product in detail. e. Customers are better informed f. Customers are more satisfied

14 g. Increased employment opportunities
Promotion provides job opportunities to millions. While many companies hire staff and maintain their own in-house promotions, others hire the services of professional public relations and advertising agencies. Promotion also creates demand for products and with demand comes mass production. Mass production in turn creates more jobs.

15 h. Increased media support
Promotion helps to pay for mass media, meaning television, radio, billboards, Internet, magazines, newspapers, etc. Without promotional dollars from advertisers, mass media would probably pass the costs to all of us (we the media users).

16 D. Describe the cost associated with the use of promotion
Companies use many methods of promotion. Some are free or nearly free, such as issuing a press release about a new or improved product. Many other methods can be costly. When marketers plan promotions, they know that there will be costs associated with each task involved.

17 The cost associated with promotion or advertising goods and services often represents a sizeable proportion of the overall cost of producing an item. Considering costs involved ahead of time helps marketers create reasonable promotional budgets for each promotional effort.

18 Costs include: a. Advertising fees b. Costs for sales promotion and contests c. Salaries for promotional and sales staff

19 Describe types of promotional objectives
Companies and organizations have three main promotional objectives. To inform: Potential customers must know something about a product if they are to buy at all.  A firm with a really new product may not have to do anything but inform consumers about it - and show that it meets consumer needs better than other products.  For example, when Mazda introduced its stylish and affordable Miata roadster, the uniqueness of the car simplified the promotion job.  Excitement about the product also generated a lot of free publicity in car magazines.

20 To persuade: When competitors offer similar products, the firm must not only inform customers that its product is available but also persuade them to buy it.  A 'persuading' objective means the firm will try to develop a favorable set of attitudes so customers will buy - and keep buying – its product.  Promotion with a persuading objective often focuses on reasons why one brand is better than competing brands.

21 For example, to help convince consumers to buy Tylenol rather than some other firm's brand, Johnson & Johnson's ads tout Tylenol as the pain relief medicine most often used in hospitals. Companies often use tools such as coupons, free samples, rebates, and contests as part of their persuasive promotions. These incentives may provide a boost to the customer to choose one product over the other. Other methods of persuasion include emphasizing the product to be “new and improved,” contain “extra strength,” are “environmentally friendly,” or “vitamin enriched.”

22 To remind: If target customers already have positive attitudes about a firm's marketing mix, a 'reminding' objective might be suitable.  This objective can be extremely important in some cases.  Even though customers have been attracted and sold once, they are still targets for competitors' appeals.  Reminding them of their past satisfaction may keep them from shifting to a competitor. 

23 Examples Campbell realizes that most people know about its soup - so much of its advertising is intended to remind. State Farm is reminding the customers that they are always there for them with the slogan, “like a good neighbor State Farm is there.” Restaurants that give customers matchbooks bearing the company’s address and logo are reminding customers of their establishment.

24 Companies may go into detail and consider the following (more specific objectives):The possible objectives for marketing promotions may include the following: Build Awareness – New products and new companies are often unknown to a market, which means initial promotional efforts must focus on establishing an identity. In this situation the marketer must focus promotion to: 1) effectively reach customers, and 2) tell the market who they are and what they have to offer.

25 Create Interest – Moving a customer from awareness of a product to making a purchase can present a significant challenge. As we saw with our discussion of consumer and business buying behavior, customers must first recognize they have a need before they actively start to consider a purchase. The focus on creating messages that convince customers that a need exists has been the hallmark of marketing for a long time with promotional appeals targeted at basic human characteristics such as emotions, fears, sex, and humor.

26 Provide Information – Some promotion is designed to assist customers in the search stage of the purchasing process. In some cases, such as when a product is so novel it creates a new category of product and has few competitors, the information is simply intended to explain what the product is and may not mention any competitors. In other situations, where the product competes in an existing market, informational promotion may be used to help with a product positioning strategy.

27 Stimulate Demand – The right promotion can drive customers to make a purchase. In the case of products that a customer has not previously purchased or has not purchased in a long time, the promotional efforts may be directed at getting the customer to try the product. This is often seen on the Internet where software companies allow for free demonstrations or even free downloadable trials of their products.

28 For products with an established customer-base, promotion can encourage customers to increase their purchasing by providing a reason to purchase products sooner or purchase in greater quantities than they normally do. For example, a pre-holiday newspaper advertisement may remind customers to stock up for the holiday by purchasing more than they typically purchase during non-holiday periods.

29 Reinforce the Brand – Once a purchase is made, a marketer can use promotion to help build a strong relationship that can lead to the purchaser becoming a loyal customer. For instance, many retail stores now ask for a customer’s address so that follow-up s containing additional product information or even an incentive to purchase other products from the retailer can be sent in order to strengthen the customer-marketer relationship.

30 Discuss the relationship of promotion and marketing
1. Promotion is the element of the marketing mix that encourages customers to buy a product or to have certain views or opinions. 2. Promotion is a marketing function needed to communicate information about goods, services, images, and/or ideas to achieve a desired outcome. Before a business can be successful, it must interest people in buying its products and services. The best product in the world will not sell itself.

31 3. Promotion is sometimes described as marketing communication because it involves sending a message to a target audience. a. Tell customers that the product is available b. Tell customers about the features and benefits of the product. c. Tell customers where the product can be purchased. d. Encourage people to buy the product.

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