1. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Chapter 13: Promotion Introduction to Integrated Marketing Communications

2. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill When you finish this chapter, you should 13-2 Chapter 13 Objectives 1. Know the advantages and disadvantages of the promotion methods a marketing manager can use in strategy planning. 2. Understand the integrated marketing communications concept and why most firms use a blend of different promotion methods. 3. Understand the importance of promotion objectives. 4. Know how the communication process affects promotion planning. 5. Understand how direct-response promotion is helping marketers develop more targeted promotion blends. 6. Understand how new customer- initiated interactive communication is different. 7. Know how typical promotion plans are blended to get an extra push from middlemen and help from customers in pulling products through the channel. 8. Understand how promotion blends typically vary over the adoption curve and product life cycle. 9. Understand how to determine how much to spend on promotion efforts. 10. Understand the important new terms.

3. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Exhibit 13-1 13-3 Basic Promotion Methods Target Market Target Market Price Promotion Place Product Sales Promotion Sales Promotion Personal Selling Personal Selling Publicity Advertising Mass Selling Mass Selling

4. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Exhibit 13-2 Aimed at middlemen Price deals Promotion allowances Sales contests Calendars Gifts Trade Shows Meetings Catalogs Merchandising aids Aimed at final consumers or users Contests Coupons Aisle displays Samples Trade shows Point-of-purchase materials Banners and streamers Trading stamps Sponsored events Aimed at companys own sales force Contests Bonuses Meetings Portfolios Displays Sales aids Training materials 13-4 Sales Promotion Activities

5. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill 0 Price Quantity D2D2 D1D1 A. To be more inelastic Promotion efforts may be targeted to make demand for the firms products more inelastic and so more resistant to counter-moves by the competition. 13-5 Promotion and the Demand Curve

6. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill 0 Price Quantity D D B. to the right 13-6 Promotion efforts may be targeted to increase the demand for the firms products. Promotion and the Demand Curve

7. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill 0 Price Quantity D D C. Both to the right and more inelastic Promotion efforts may be targeted to both increase demand for the firms products and to make demand more inelastic 13-7 Promotion and the Demand Curve

8. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill 0 Price Quantity D 0 Price Quantity 0 Price Quantity D2D2 D1D1 D D D B. to the rightA. To be more elasticC. Both to the right and more elastic 13-8 Promotion and the Demand Curve

9. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Promotion and the AIDA Model Exhibit 13-3 Promotion ObjectivesAdoption ProcessAIDA Model Informing Persuading Reminding Attention Interest Desire Action Awareness Interest Evaluation Trial Decision Confirmation } } { 13-9

10. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Exhibit 13-4 Feedback ReceiverDecoding Message channel EncodingSource Noise 13-10 The Traditional Communication Model

11. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Encoder Decoder Common frame of reference The same message may be interpreted differently by the encoder and the decoder 13-11 Message Interpretation

12. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Exhibit 13-5 Noise Sources Message Search Select a topic Message channel Receiver (Customer) 13-12 Customer-Initiated Interactive Communication

13. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Push-Pull Strategies Exhibit 13-6 Wholesaler Promotion Push Wholesaler Promotion Push Retailer Promotion Push Final Consumer Pull Business Customer Pull Promotion to Business Customers Promotion to Final Customers Promotion to Channel Members Producers Promotion Blend Personal Selling, Sales Promotion, Advertising, Publicity 13-13

14. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Exhibit 13-7 Time 13-14 The Adoption Curve Percent Adoption Innovators (3-5%) Early Adopters (10-15%) Early Majority (34%) Late Majority (34%) Laggards/ Nonadopters (5-16%) 0 5 20 50 90

15. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Setting the Promotion Budget Task Method! Uncommitted Resources? Per Unit? Match Competitors? Percentage of Sales? 13-15

16. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Receiver Noise Encoding Decoding Message Channel Pushing Pulling Adoption Curve Innovators Early Adopters Early Majority Late Majority Laggards Nonadopters Primary Demand Selective Demand Task Method Promotion Personal Selling Mass Selling Advertising Publicity Sales Promotion Sales Managers Advertising Managers Public Relations Sales Promotion Managers Integrated Marketing Communications AIDA Model Communication Process Source Key Terms 13-16