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Copyright 2013, Pearson Education Global Marketing Communications Decisions II: Sales Promotions & Personal Selling Chapter 14.

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Presentation on theme: "Copyright 2013, Pearson Education Global Marketing Communications Decisions II: Sales Promotions & Personal Selling Chapter 14."— Presentation transcript:

1 Copyright 2013, Pearson Education Global Marketing Communications Decisions II: Sales Promotions & Personal Selling Chapter 14

2 Copyright 2013, Pearson Education Introduction In addition to advertising, publicity and PR, the promotion mix includes: – Sponsorships – Sales promotion – Direct marketing – Personal selling – Internet – Infomercials Shanghai World Expo Park

3 Copyright 2013, Pearson Education Sales Promotion Sales promotion refers to any paid consumer or trade communication program of limited duration that adds tangible value to a product or brand – Price vs. non-price promotions – Consumer vs. trade promotions 14-3

4 Copyright 2013, Pearson Education Sales Promotion Provide a tangible incentive to buyers Reduce the perceived risk associated with purchasing a product Provide accountability for communications activity Provide method of collecting additional data for database 14-4 Home and Garden shows attract homeowners

5 Copyright 2013, Pearson Education Sales Promotion: Global or Local In countries with low levels of economic development, low incomes limit the range of promotional tools available Market maturity can also be different from country to country Local perceptions of a particular promotional tool or program can vary Local regulations may rule out use of a particular promotion in certain countries Trade structure in the retailing industry can affect the use of sales promotions In countries with low levels of economic development, low incomes limit the range of promotional tools available Market maturity can also be different from country to country Local perceptions of a particular promotional tool or program can vary Local regulations may rule out use of a particular promotion in certain countries Trade structure in the retailing industry can affect the use of sales promotions 14-5

6 Copyright 2013, Pearson Education Sampling Kikkoman soy sauce launched a sampling program in supermarkets in the U.S.; today the U.S. contributes 85% of profit from international operations 14-6 Sampling – Provides consumer with opportunity to try product at no cost – May be distributed in stores, in the mail, through print media, at events, or door-to- door Wine tasting in South Africa

7 Copyright 2013, Pearson Education Couponing Couponing accounts for 70% of consumer promotion spending in the U.S. Free-standing inserts, in-pack, on-pack, cross coupons Couponing accounts for 70% of consumer promotion spending in the U.S. Free-standing inserts, in-pack, on-pack, cross coupons 14-7 Couponing – Printed certificates entitle the bearer to a price reduction or some other special consideration for purchasing a particular product Couponing – Printed certificates entitle the bearer to a price reduction or some other special consideration for purchasing a particular product

8 Copyright 2013, Pearson Education Couponing 14-8

9 Copyright 2013, Pearson Education Sales Promotion: Issues and Problems Fraud – Pepsi promotion with Apple Regulations vary by country Cultural dispositions to coupons and other sales promotions – Malaysians see coupon usage as embarrassing – Islam frowns on gambling so sweepstakes may not work Fraud – Pepsi promotion with Apple Regulations vary by country Cultural dispositions to coupons and other sales promotions – Malaysians see coupon usage as embarrassing – Islam frowns on gambling so sweepstakes may not work 14-9

10 Copyright 2013, Pearson Education Personal Selling Person-to-person communication between a company representative and a prospective buyer Focus is to inform and persuade prospect Short-term goal: make a sale Long-term goal: build a relationship Person-to-person communication between a company representative and a prospective buyer Focus is to inform and persuade prospect Short-term goal: make a sale Long-term goal: build a relationship 14-10

11 Copyright 2013, Pearson Education Personal Selling Hurdles Political Risks – unstable or corrupt governments change the rules for the sales team Regulatory Hurdles – Governments can set up quotas or tariffs that affect the sales force Currency Fluctuations – increase and decrease in local currencies can make certain products unaffordable Market Unknowns – lack of knowledge of market conditions, the accepted way of doing business, or positioning of the product may derail the sales teams efforts 14-11

12 Copyright 2013, Pearson Education The Strategic/Consultative Selling Model 14-12

13 Copyright 2013, Pearson Education Evolved in response to: Increased competition More complex products More emphasis on customer needs Long-term relationships

14 Copyright 2013, Pearson Education The Strategic/Consultative Selling Model Personal Selling Philosophy – commitment to the marketing concept and a willingness to adopt the role of problem solver/partner Relationship Strategy – game plan for establishing and maintaining high-quality relationships with prospects/customers Product Strategy – plan that can assist the sales representative in selecting and positioning products to satisfy customer needs 14-14

15 Copyright 2013, Pearson Education The Strategic/Consultative Selling Model Customer Strategy – plan that ensures that the sales professional will be maximally responsive to customer needs Presentation Strategy – consists of setting objectives for each sales call and establishing a presentation plan to meet those objectives 14-15

16 Copyright 2013, Pearson Education The Presentation Plan Approach Presentation Demonstration Negotiation Close Servicing the sale 14-16

17 Copyright 2013, Pearson Education Approach Initial contact with the customer/prospect Must completely understand the decision- making process and the roles of each participant

18 Copyright 2013, Pearson Education Presentation Prospects needs are assessed and matched to the companys products The style and message of the presentation must be tailored to the audience

19 Copyright 2013, Pearson Education Demonstration Salesperson has the opportunity to tailor the communication effort to the customer Can show how the product can meet the customers needs 14-19

20 Copyright 2013, Pearson Education Negotiation Ensures that both the customer and the salesperson come away from the presentation winners

21 Copyright 2013, Pearson Education Close Ask for the sale Must be culturally sensitive 14-21

22 Copyright 2013, Pearson Education Servicing the Sale To ensure customer satisfaction – Implementation process must be outlined – Customer service program established

23 Copyright 2013, Pearson Education Sales Force Nationality Expatriates Host-country nationals Third-country nationals Other options 14-23

24 Copyright 2013, Pearson Education Expatriates Advantages – Superior product knowledge – Demonstrated commitment to service standards – Train for promotion – Greater HQ control Disadvantages – Higher cost – Higher turnover – Cost for language and cross-cultural training

25 Copyright 2013, Pearson Education Host-Country Nationals Advantages – Economical – Superior market knowledge – Language skills – Superior cultural knowledge – Fast implementation Disadvantages – Needs product training – May be held in low esteem – Language skills may not be important – Difficult to ensure loyalty

26 Copyright 2013, Pearson Education Third-Country Nationals Advantages – Cultural sensitivity – Language skills – Economical – Allows regional sales coverage Disadvantages – May face identification problems – May be blocked for promotions – Income gaps – Needs product and/or company training – Loyalty not assured

27 Copyright 2013, Pearson Education Other Options Sales agents Exclusive license arrangements Contract manufacturing or production Management-only agreements Joint ventures Sales agents Exclusive license arrangements Contract manufacturing or production Management-only agreements Joint ventures 14-27

28 Copyright 2013, Pearson Education Special Forms of Marketing Communications Direct Marketing – Direct mail – Catalogs – Infomercials, teleshopping Event Sponsorship – Concerts, sporting events – Product placement in movies Internet Communications 14-28

29 Copyright 2013, Pearson Education Direct Marketing Any communication with a consumer or business recipient that is designed to generate a response in the form of: – An order – Request for further information – A visit to a store or other place of business 14-29

30 Copyright 2013, Pearson Education Direct Marketing vs. Mass Marketing 14-30

31 Copyright 2013, Pearson Education Catalogs German supermodel Yvonne Catterfeld with Otto Catalog Catalog: magazine-style publication that features photographs, illustrations, and extensive information about a companys products U.S. 1/3 of world market, 17 billion mailed in 2008 EU: Elimination of barriers has led to a boom

32 Copyright 2013, Pearson Education Infomercials and Teleshopping An infomercial is a form of paid TV in which a particular product is demonstrated, explained, and offered for sale to viewers who call a toll- free number on the screen Teleshopping on channels like HSN and QVC is exclusively devoted to demonstration and selling

33 Copyright 2013, Pearson Education Interactive Television ITV allows viewers to interact with the programming content they are viewing In the U.K., more than half of pay-TV subscribers use ITV Remote controls have buttons to push to order products shown on screen

34 Copyright 2013, Pearson Education Sponsorships A company pays a fee to be associated with an event, team, athletic association, or sports facility Combines elements of PR and sales promotion Draws media attention

35 Copyright 2013, Pearson Education Product Placement Arranging to have the companys products and brand names appear in TV shows, movies, and other types of entertainment Marketers also lend or donate products to celebrities and other public figures

36 Copyright 2013, Pearson Education Looking Ahead to Chapter 15 Strategic Elements of Competitive Advantage

37 Global Marketing Global Edition Warren J. Keegan Mark C. Green Strategic Elements of Competitive Advantage Chapter 16 Copyright 2013, Pearson Education Global Marketing Warren J. Keegan Mark C. Green Global Marketing Warren J. Keegan Mark C. Green Strategic Elements of Competitive Advantage Chapter 16

38 Copyright 2013, Pearson Education Introduction This chapter looks at: – Factors that shape competition – Competitive advantageat the industry and national levels

39 Copyright 2013, Pearson Education Industry Analysis: Forces Influencing Competition Industry – group of firms that produce products that are close substitutes for each other Michael Porter identifies five forces that influence competition

40 Copyright 2013, Pearson Education Porters Force 1: Threat of New Entrants New entrants mean downward pressure on prices and reduced profitability Barriers to entry determines the extent of threat of new industry entrants

41 Copyright 2013, Pearson Education Threat of New Entrants: Threat of New Entrants: Barriers to Entry Economies of Scale – Refers to the decline in per-unit product costs as the absolute volume of production per period increases Product differentiation – The extent of a products perceived uniqueness Capital requirements – Required investment for manufacturing, R&D, advertising, field sales and service, etc. Switching costs – Costs related to making a change in suppliers or products

42 Copyright 2013, Pearson Education Porters Force 2: Threat of Substitute Products Availability of substitute products places limits on the prices market leaders can charge High prices induce buyers to switch to the substitute

43 Copyright 2013, Pearson Education Porters Force 3: Bargaining Power of Buyers Buyers=manufacturers and retailers, not consumers Buyers seek to pay the lowest possible price Buyers have leverage over suppliers when: – They purchase in large quantities (enhances supplier dependence on buyer) – Suppliers products are commodities – Product represents significant portion of buyers costs – Buyer is willing and able to achieve backward integration

44 Copyright 2013, Pearson Education Bargaining Power of Buyers

45 Copyright 2013, Pearson Education Porters Force 4: Bargaining Power of Suppliers When suppliers have leverage, they can raise prices high enough to affect the profitability of their customers Leverage accrues when – Suppliers are large and few in number – Suppliers products are critical inputs, are highly differentiated, or carry switching costs – Few substitutes exist – Suppliers are willing and able to sell product themselves

46 Copyright 2013, Pearson Education

47 16-47 Porters Force 5: Rivalry Among Competitors Refers to all actions taken by firms in the industry to improve their positions and gain advantage over each other – Price competition – Advertising battles – Product positioning – Differentiation

48 Copyright 2013, Pearson Education Competitive Advantage Achieved when there is a match between a firms distinctive competencies and the factors critical for success within its industry Broad market strategies – Cost Leadershiplow price – Product Differentiationpremium price Narrow market strategies – Cost Focuslow price – Focused Differentiationpremium price

49 Copyright 2013, Pearson Education Cost Leadership Based on a firms position as the industrys low-cost producer Must construct the most efficient facilities Must obtain the largest market share so that its per unit cost is the lowest in the industry Only works if barriers exist that prevent competitors from achieving the same low costs

50 Copyright 2013, Pearson Education Cost Leadership

51 Copyright 2013, Pearson Education Product Differentiation Product that has an actual or perceived uniqueness in a broad market has a differentiation advantage Extremely effective for defending market position Extremely effective for obtaining above- average financial returns; unique products command a premium price

52 Copyright 2013, Pearson Education Product differentiation

53 Copyright 2013, Pearson Education Cost Focus Firms lower cost position enables it to offer a narrow target market and lower prices than the competition Sustainability is the central issue for this strategy – Works if competitors define their target market more broadly – Works if competitors cannot define the segment even more narrowly

54 Copyright 2013, Pearson Education Cost Focus

55 Copyright 2013, Pearson Education Focused Differentiation The product not only has actual uniqueness but it also has a very narrow target market Results from a better understanding of customers wants and desires Ex.: High-end audio equipment

56 Copyright 2013, Pearson Education Global Competition and National Competitive Advantage

57 Copyright 2013, Pearson Education Factor Conditions Human Resources – the quantity of workers available, skills possessed by those workers, wage levels, and work ethic Physical Resources – the availability, quantity, quality, and cost of land, water, minerals, and other natural resources Knowledge Resources – the availability within a nation of a significant population having scientific, technical, and market-related knowledge

58 Copyright 2013, Pearson Education Factor Conditions Capital Resources – the availability, amount, cost, and types of capital available; also includes savings rate, interest rates, tax laws, and government deficit Infrastructure Resources – this includes a nations banking, healthcare, transportation, and communication systems

59 Copyright 2013, Pearson Education Demand Conditions Composition of Home Demand – determines how firms perceive, interpret, and respond to buyer needs Size and Pattern of Growth of Home Demand – large home markets offer opportunities to achieve economies of scale and learning in familiar, comfortable markets

60 Copyright 2013, Pearson Education Related and Supporting Industries The advantage that a nation gains by being home to internationally competitive industries in fields that are related to, or in direct support of, other industries

61 Copyright 2013, Pearson Education Firm Strategy, Structure, and Rivalry Domestic rivalry in a single national market is a powerful influence on competitive advantage Domestic rivalry in a single national market is a powerful influence on competitive advantage – The absence of significant domestic rivalry can lead to complacency in the home firms and eventually cause them to become noncompetitive in the world markets Differences in management styles, organizational skills, and strategic perspectives also create advantages and disadvantages for firms competing in different types of industries

62 Copyright 2013, Pearson Education Firm Strategy, Structure, and Rivalry Capital markets and attitudes toward investments are important components of the national environments Chance events are occurrences that are beyond control; they create major discontinuities Government is also an influence on determinants by virtue of its roles as a consumer, policy maker, and commerce regulator

63 Copyright 2013, Pearson Education


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