2 Think silently ... then share with us What do these all have in common?Think silently ... then share with us
3 PROMOTION is persuasive communication. Product Promotion - persuade people to select its products instead of competitors.Institutional Promotion – used to create favorable image for a business, help it advocate for a change or take a stand on trade or community issues.Companies maintain websites to provide news, product & general information, & to answer questions. Its purpose is not to directly sell a product but it may help sales.
4 PROMOTIONNon-profit organizations use it to educate public about an issue or trend or to advocate for change in a law or policy.Goals of Promotional activities are summarized by AIDAAttract attentionbuild Interest and Desireask for Action
6 5 Types of Promotion in Promotional Mix Personal selling requires direct personal contact with the customer.Other 4 types of promotion (i.e. Advertising, Direct marketing, Sales Promotion, & Public Relations) communicate with customers in ways other than direct contact.
7 5 Types of Promotions in Promotional mix Public relationsmedia relationspublicity – free mediaobjectivitynews releasePersonal sellingdoor-to-doorPersonal meetingstelemarketingmailexpensiveSales promotionsanything elsecoupons, samplespoint of sales displaysPromotional mixtarget marketcoordinate strategiesbudgetresultsAdvertisingnon-personal, one-wayprint, TV, radioproduct placementswebsites, , text messagesDirect marketingDirected to target groupsIn the form of mail, orsales or sales leadsincentive – special offer : coupon etc.Incentive to call toll free #, website
8 Concept of Promotional Mix Develop an effective promotional mix to reach promotional goals.How do companies choose promotional mix? They use following steps:Identify the target marketDetermine the promotional strategiesEstablish the budgetAllocate resourcesCoordinate the campaignMeasure the results
9 Push – Pull conceptManufacturers with products that have weak brand identity might use push or pull strategy to reach customers.Push PolicyGet next-in-chain of Distribution to carry your products (i.e. convince the retailer to stock the products on their limited shelf space)A manufacturer uses a mix of personal selling, advertising, buying discounts, sales promotions (especially at trade shows) to promote a product to large retailers that sell its products.
10 Push – Pull concept Pull Policy Get consumers to want your product Designed to create consumer interest and demand.Consumer demand can pull or encourage retailers to carry a product.Relies heavily on advertising geared towards consumers, product samples, and in-store product displays and demonstrations
11 Types of Promotion Sales promotions 2 Types of Sales Promotions are incentives that encourage consumers to buy and try a new productBuild awarenessIncrease purchases by current customersReward loyalty2 Types of Sales PromotionsTrade promotion (Business-to-Business or B2B)Consumer promotion (Business-to-Consumer or B2C)
12 Trade Promotion Targets manufacturers, wholesalers, retailers More $ spent on promoting to businesses than to consumers5 Types of Trade Promotions1) Promotional allowancesare cash payments or discounts given by manufacturers to wholesalers or retailers for performing activities to encourage sales.Result Retailers are more likely to promote the product to customers.
13 Trade Promotion Cooperative advertising 5 Types of Trade Promotions….Continued.Cooperative advertisingManufacturer helps retailer by paying for the cost of advertising its product locally.Slotting AllowancesManufacturer pays a cash premium to a retailer to help the retailer cover the costs of placing the manufacturer’s product on the shelves.Can range from a few thousands to millions of dollars per product.Pay for a retailer’s discount specials on a product, charges for store shelves, penalties for poor sales, store advertising, & display costs.
14 Trade Promotion 4) Sales force promotions 5 Types of Trade Promotions….Continued.4) Sales force promotionsare awards given to dealers & employees who meet or exceed a sales quotaSales quota can apply to a specific period of time, such as one day, a month, or a year, for a particular product or line of products.Awards may include cash bonuses or prizes such as merchandise or travel awards.
15 Trade Promotion 5 Types of Trade Promotions….Continued. 5) Trade shows and conventionsShowcase a particular line of products.Provide businesses opportunities tointroduce new products,encourage increased sales of existing products,meet customers & partners in the distribution chain,gain continued company & product support.
16 Consumer Promotions are inducements to buy or try a product or service Consumer Sales Promotion devices include:CouponsEntitles customers to cash discounts on goods or servicesAre placed on or inside product packages, or printed in newspapers and magazinesSome get consumers to download & print electronic coupons online or redeem coupons by purchasing product online.
17 Consumer Sales Promotion devices Continued…. PremiumsAre low-cost items given to consumers at a discount or for free.3 types of popular consumer premiumsFactory Packs or in-packs – are free gifts placed in product packages E.g. in cereal boxes.Traffic Builders – are low-cost premiums such as coffee mugs that are given away to consumers for visiting a new store or attending a special event.Coupon Plans – offer a premiums in exchange for labels or coupons obtained from a product or label. E.g. three soup-can labels in exchange for recipe book.
18 Consumer Promotions Deals or Price Packs Incentives Offer short-term price reductions that are marked directly on the label or package.E.g. Two for one deal i.e. two similar or related products for the price of one Shampoo & ConditionerIncentivesAre used to promote products since they create customer excitement & increase sales.Are higher-priced products earned & given away through contests, sweepstakes, & rebates.
19 Consumer Promotions Incentives…Continued Contests – are games or activities that required demonstration of a skill.E.g. scholarships, vacation, & moneySweepstakes – are games of chance and winners are picked randomlyRebates – are discounts offered by manufacturers to customers who purchase an item during a given period of time.
20 Consumer PromotionsProduct SamplesIs a free trial size of a product sent through the mail, distributed door-to-door, or given away at stores & trade shows.E.g. drug manufacturers often given samples to Doctors & Dentists so their patients can try the new products.
21 Consumer Promotions Sponsorship Sponsoring company pays a fee for the right to promote itself & its products or services at or on a set location.Sponsors often negotiate the right to use its logos & names on retail products.E.g. Ted Rogers School of Management at Ryerson UniversityMust be able to withstand public & media scrutiny
22 Consumer Promotions Promotional Tie-Ins Also known as Cross-Promotion & Cross-selling campaignsInvolves sales promotional arrangements between one or more retailers or manufacturers.Produce mutually beneficial results.Is becoming increasingly popular on the Internet
23 Consumer Promotions Product Placement Involves using a brand-name product in a movie, television show, sporting event, or even in a commercial for another product.E.g. Use of Coca-Cola Drinks in American IdolE.g. Warner Bros movie “You’ve Got Mail” featured America Online (AOL)AOL paid between $3 & $6 million to Warner Bros for the international film exposure for its product and services.
24 Consumer Promotions Loyalty Marketing Programs Also known as frequent buyer programsReward customers for being loyal to the company.Customer loyalty – means that customers are so satisfied with a brand or retailer that they continue to buy that brand or company (e.g. retailer) even when they have others from which to choose.Airline industry – frequent flier program – reward customers with free air travel once they have accumulated a designated amount of travel miles.
25 Online Loyalty Marketing Consumer PromotionsLoyalty Marketing Programs…ContinuedOnline Loyalty MarketingThe Internet search engine Yahoo! Awards points to web surfers who buy from certain retailer web sites.Then, web surfers can convert their points into frequent flier miles in the airline industry.
26 Consumer Promotions Point-of-Purchase Displays Are displays designed primarily by manufacturers to hold & display their products.Are placed in high-traffic areas & promote impulse purchases.Purpose – is to stimulate sales & serve as in-store advertising.