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Promotion Concepts. What is Promotion? Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence.

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Presentation on theme: "Promotion Concepts. What is Promotion? Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence."— Presentation transcript:

1 Promotion Concepts

2 What is Promotion? Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. Informing Reminding Persuading Target Audience Target Audience

3 The Evolution of Advertising Fragmentation –Av HH has 150+ channels; 17,000 magazines (5,000 consumer); 400,000 highway billboards; 30,000 plastered buses Clutter –330 ads per day (21 ads/hour) Alienation –65% believe they are constantly bombarded with too much advertising –69% are interested in products that would help them skip or block marketing

4 The Evolution of Advertising The death of network TV? –Where did males go? They are not coming back… The death of the :30 TV spot? –The power of TiVo: –2005: 10 million HH PVR –2007: 20% of HH PVR Online block out Media Zone out –Multitasking

5 Communication Solutions Advertising yields to communication solutions Reaching the target audiences with relevant communications based on central brand based creative idea that is delivered through optimal mix of consumer touch points; tracking results for continuous optimization and ROI analysis Other terms: Media neutral planning; channel neutral planning

6 Developing Effective Marketing Communications Identify the target audience Determine Communication objectives Design the message Select the communication channels Budget Determine the media mix Measure the results Manage the IMC process

7 Promotional Mix Advertising Elements of the Promotional Mix Elements of the Promotional Mix Public Relations Personal Selling Sales Promotion

8 How the money gets divided…

9 Communication Objectives Cognitive, Affective or Behavioral response Some of these tend to be qualitative in nature -

10 A ttention I nterest D esire A ction Design the Message: ADIA Concept

11 ADIA and the Promotional MixAwarenessAwarenessInterestInterestDesireDesireActionActionAdvertising Very effective Very effective Somewhat effective Not effective Not effective PublicRelationsPublicRelations Very effective Very effective Very effective Very effective Very effective Very effective Not effective Not effective SalesPromotion Somewhat effective Somewhat effective Very effective Very effective Very effective PersonalSelling Somewhat effective Very effective Very effective Somewhat effective Somewhat effective

12 Designing the Message Message content –Rational appeals, moral appeals, emotional appeals Message structure –One sided vs. two sided messages Message format Message source –Source credibility

13 Select Communication Channels Personal communication channels Nonpersonal communication channels (which is what we will focus on for this class)

14 Establishing the Budget Affordable method Percentage of sales method Competitive parity method Objective and task method

15 Determining the Promotional Mix Advertising Sales Promotion Public relations and publicity Direct marketing Personal selling

16 Factors Affecting the Promotional Mix Nature of Product Stage in PLC Target Market Factors Type of Buying Decision Promotion Funds Push or Pull Strategy FactorsAffecting Choice of Promotional Mix FactorsAffecting Choice of Promotional Mix

17 Product Life Cycle and the Promotional Mix Light Advertising, pre- introduction Publicity Heavy use of advertising, PR for awareness; sales promotion for trial AD/PR decrease Limited Sales Promotion, Personal Selling for distribution Ads decrease. Sales Promotion, Personal Selling Reminder & Persuasive Advertising, PR, Brand loyalty Personal Selling for distribution Introduction Growth Maturity Decline Sales ($) Time

18 Push and Pull Strategies Manufacturer promotes to wholesalerManufacturer wholesalerWholesaler retailerWholesaler retailerRetailer consumerRetailer consumerConsumer buys from retailerConsumer retailer PUSH STRATEGY Orders to manufacturer Manufacturer promotes to consumerManufacturer consumerConsumerdemandsproduct from retailer Consumerdemandsproduct Retailerdemandsproduct from wholesaler Retailerdemandsproduct Wholesalerdemands product from manufacturerWholesalerdemands manufacturer Orders to manufacturer PULL STRATEGY

19 Measuring the Results Recognize Recall Behavioral responses Sales & market share Word of mouth


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