Presentation on theme: "Elements of the Promotion Mix"— Presentation transcript:
1 Elements of the Promotion Mix AdvertisingIngredientsof thePromotionMixPublic RelationsPersonal SellingSales Promotion
2 The Communication Process NoiseSenderEncodingChannelDecodingReceiverChannel
3 Goals and Tasks of Promotion InformingRemindingTargetAudiencePersuading
4 AIDA and the Hierarchy of Effects PurchaseConvictionPreferenceLikingKnowledgeAwarenessAttentionInterestDesireAction
5 When Elements of Promotion Are Most Useful AdvertisingPersonalsellingEffectivenessSalespromotionPublicrelationsAwarenessKnowledgeLikingPreferenceConvictionPurchaseVery effectiveSomewhat effectiveEither not effective or inefficient
6 Factors that Affect the Promotion Mix Nature of the ProductStage in the ProductLife CycleTarget Market CharacteristicsType of Buying DecisionAvailable Funds$ $ $Push–and–Pull Strategies
7 Creating a Promotion Plan Analyze the MarketplaceIdentify Target MarketSet Promotion ObjectivesDevelop Promotion BudgetChoose Promotion Mix
8 Criteria for Setting Promotion Objectives Promotion objectives should:be measurable, concretebe based on sound research, with awell-defined target audiencebe realisticreinforce the overall marketing plan andrelate to specific marketing objectives
9 Examples of Promotion Objectives Objective: To Inform (Awareness)To increase the top-of-mind awareness level for Peter Pan peanut butter from 16 percent to 24 percentObjective: To Persuade (Attitudinal)To increase the percentage of parents who feel that Peter Pan peanut butter is the best peanut butter for their children from22 percent to 35 percentObjective: To RemindTo remind consumers that Peter Pan peanut butter is the creamiest peanut butter and is available at their nearest grocery and convenience stores
10 Techniques for Setting Promotion Budgets • Arbitrary Allocation• All - You - Can - Afford• Competitive Parity• Percent of Sales• Market Share• Objective and Task
11 Regulation of Promotion Self-Regulation• National Advertising Division (NAD)• National Advertising Review Board (NARB)Federal Regulation• Federal Trade Commission (FTC)
12 Effects of Advertising Diminishingreturnson additionalspendingIncreasing efficiencyas ad budget becomessufficientReturn on Advertising ExpendituresAdvertising Spending
13 Major Types of Advertising Corporate ImageInstitutionalAdvertisingAdvocacy AdvertisingTypesofAdvertisingPioneeringProductAdvertisingCompetitiveComparative
14 Advertising Campaign Decision Process Determine the campaign objectives.Make creative decisions.Make media decisions.Evaluate the campaign.
15 Common Advertising Appeals ProfitSave money, keep from losing moneyHealthBody-conscious, healthyLove or RomanceSell cosmetics and perfumesFearSocial embarrassment, growing old, losing health, powerAdmirationCelebrity endorsement effectiveConvenienceFast-food and microwave productsFun and PleasureVacations, beer, amusement parksVanity and EgotismExpensive, conspicuous items
16 Executional Styles for Advertising ScientificSlice-of-LifeMusicalLifestyleCommonExecutionalStylesDemon-strationSpokes-person/TestimonialMood or ImageFantasyReal/AnimatedProductSymbolsHumorous
17 Methods Used to Evaluate Advertising Campaigns PretestsExamples:• Consumer jury tests• Portfolio or unfinished rough tests• Physiological testsPost-testsExamples:• Recognition tests• Recall tests• Attitude measures• Audience size measurement
18 The Tools of Public Relations New Product PublicityProduct PlacementMajorToolsUsed ByPRProfessionalsCustomer SatisfactionPhone LinesConsumer EducationEvent SponsorshipIssue SponsorshipWeb Sites
19 Types of Consumer & Sales Promotion Goals Type of buyer Desired results Sales promotion examplesLoyal customers Reinforce behavior, • Loyalty marketing programs,People who buy your increase consumption, such as frequent-buyer cardsproduct most or all change purchase timing or frequent-shopper clubsof the time • Bonus packs that give loyalconsumers an incentive tostock up or premiums offeredin return for proofs-of-purchaseCompetitor’s Break loyalty, persuade • Sampling to introduce yourcustomers to switch to your brand product’s superior qualitiesPeople who buy a compared to their brandcompetitor’s product • Sweepstakes, contests, ormost or all of the time premiums that create interestin the productBrand switchers Persuade to buy your • Any promotion that lowers thePeople who buy a brand more often price of the product, such asvariety of products coupons, price-off packages,in the category and bonus packs• Trade deals that help make theproduct more readily availablethan competing productsPrice buyers Appeal with low prices • Coupons, price-off packages,People who or supply added value refunds, or trade deals thatconsistently buy the that makes price less reduce the price of brand toleast expensive brand important match that of the brand thatwould have been purchasedSource: From Sales Promotion Essentials, 2E by Don. E. Schultz, William A. Robinson, and Lisa A. Petrison. Reprinted by permission of NTC Publishing Group, Lincolnwood, IL.
20 Tools for Consumer Sales Promotion CouponsPremiumsSixCategoriesofConsumerSalesPromotionsFrequent Buyer ProgramsContests andSweepstakesSamplesPoint-of-PurchaseDisplays
22 Advantages of Personal Selling Detailed InformationMessage ControlTargetedCost ControlClosing Sales
23 Advertising Versus Personal Selling Personal Selling is more important if...The product has a high value.It is a custom-made product.There are few customers.The product is technically complex.Customers are geographically concentrated.Advertising/Sales Promotion is more important if...The product has a low value.It is a standardized product.There are many customers.The product is simple to understand.Customers are geographically dispersed.
24 Differences Between Traditional & Relationship Selling Traditional Personal SellingSell products (goods and services)Focus on closing salesLimited sales planningSpend most contact time telling customers about productConduct “product-specific” needs assessment“Lone-wolf” approach to the accountProposals and presentations based on pricing and product featuresSales follow-up focused on product deliveryRelationship SellingSell advice, assistance, and counselFocus on improving the customer’s bottom lineConsiders sales planning as top prioritySpend most contact time attempting to build a problem-solving environment with the customerConduct discovery in the full scope of the customer’s operationsTeam approach to the accountProposals and presentations based on profit impact and strategic benefits to the customerSales follow-up is long term, focused on long-term relationship enhancementSource: Robert M. Peterson, Patrick L. Shul, and George H. Lucas, Jr., “Consultative Selling: Walking the Walk in the New Selling Environment,”National Conference on Sales Management, Proceedings, March 1996.
25 Steps in the Selling Process Generating Sales LeadsQualifying Sales LeadsBasicSteps intheSellingProcessMaking the Sales ApproachMaking the Sales PresentationHandling ObjectionsClosing the SaleFollowing Up
26 Functions of Sales Management Set Sales ObjectivesEvaluate Sales ForceStructure Sales ForceManage TurnoverMajor Tasks of Sales ManagementDetermine Sales Force SizeMotivate Sales ForceDevelop Compen-sation PlanTrain Sales ForceRecruit Sales Force
27 Cost Determinants of Price 1234567891050100150200MCATCDollarsAVCAFCQuantity
28 Break-Even Analysis Total Revenue Profits Break Even Total Costs Price ($)Fixed CostsLossesQuantity (units)
29 Steps in Setting the Right Price Establish Pricing GoalsEstimate Demand, Costs,and ProfitsChoose StrategyFine-Tune Base Price$ $ $ $ $ $ $ $Right Price
30 Legal and Ethical Issues in Pricing Unfair Trade PracticesKey Legaland EthicalIssuesRelated toPricePrice FixingPrice DiscriminationPredatory Pricing
31 Discounts, Allowances, and Rebates CashDiscountQuantityFunctionalTrade LoadingEDLPSeasonalDiscountsPromotionalAllowancesRebatesPriceReductions
32 Geographic Pricing Pricing Tactics Based on Geography FOB Origin Uniform DeliveredPricingTacticsBased onGeographyZone PricingFreight-AbsorptionBasing-Point
33 Special Pricing Tactics SinglePriceTwo-PartPricingFlexiblePricingBundlePricingCommonSpecial PricingTacticsProfessionalServicesOdd-EvenPricingPriceLiningBaitPricingLeaderPricing