2 Introduction DEFINITION: Promotion is communication with actual and potential buyersOBJECTIVE:To convince target market of the product’s differential advantageNECESSARY PREREQUISITE:Ought be guided by a promotional strategy: a plan for the optimal use of the promotional mix
3 Elements of the Promotional Mix AdvertisingIngredientsof thePromotionMixPublicityPersonal SellingSales Promotion
4 The Effects (outcomes) of Advertising Advertising influences:market sharethe consumers’ behaviourbrand loyaltyperceptions of attributes
5 Promotion and the Demand Curve PricePriceD1DD2DQuantityQuantityA. To be more inelasticB. to the rightPromotion efforts may be targeted to make demand for the firm’s products more inelastic and so more resistant to counter-moves by the competition.Promotion efforts may be targeted to increase the demand for the firm’s products.
6 Promotion and the Demand Curve PricePromotion efforts may be targeted to both increase demand for the firm’s products and to make demand more inelasticDDQuantityC. Both to the right and more inelasticPricePricePriceDD1DD2DDQuantityQuantityQuantityA. To be more elasticB. to the rightC. Both to the right and more elastic
7 Major Types of Advertising Corporate ImageInstitutionalAdvertisingAdvocacy AdvertisingTypesofAdvertisingPioneeringProductAdvertisingCompetitiveComparative
8 Major Types of Advertising (cont) Institutional advertisingto establish, change or maintain the firm’s identity - not an attempt to sell anythingProduct advertisingpioneering advertisingstimulate demand for a new product: primary demandcompetitive advertisingattempts to increase sales: brand insistencecomparative advertisingdirectly or indirectly compares two brands
10 Choosing Media Major Kinds of Media Yellow Pages Outdoor Internet MagazineTelevisionDirect MailRadioNewspapersMajor Kinds of Media
11 Advertising on the Internet Many FormsSeek Direct ResponseMore ExposureBetter TargetingContext Ads/PointcastingPay for Results??????
12 Public Relations and Publicity Public relations: shape the public’s perceptions of and attitudes towards the firmCommunicates with stakeholders in manners other than advertisingPublicity: non-paid for media exposure for the firm: both positive and negative
13 Personal SellingTwo people in a purchasing situation trying to influence each otherEach part has its own objectivesbuyer wants to minimise costs or buy the best qualityseller wants to maximise price, sales and profitsOften a well-prepared presentationModern approach is relationship selling
14 Steps in the Personal Selling Process Evaluate needs of established customersProspect for new customerSet effort prioritiesSelect target customerPreplan sales call and presentation(s)Make sales presentationClose saleFollow up to establishFollow up to maintainFeedback
15 Sales PromotionAll marketing activities other than advertising, personal selling and public relations, that stimulates sales and dealer effectivenessShort-term, immediate stimulation of demandCan be aimed at consumers, intermediaries or employeesExamples: free samples, coupons etc.
16 Sales Promotion Activities Aimed at finalconsumers or usersAimed at middlemenAimed at company’sown sales forceContestsCouponsAisle displaysSamplesTrade showsPoint-of-purchasematerialsBanners andstreamersTrading stampsSponsored eventsPrice dealsPromotion allowancesSales contestsCalendarsGiftsTrade ShowsMeetingsCatalogsMerchandising aidsContestsBonusesMeetingsPortfoliosDisplaysSales aidsTraining materials
17 The Communication Process NoiseSenderEncodingChannelDecodingReceiverChannel
18 Integrated Marketing Communications Ideally communication from each promotional element ought to be integratedThe message reaching the consumer must be consistent irrespective of the medium usedOrganisational arrangements must ensure IMCThe responsibility of the marketing communications manager
19 Goals and Tasks of Promotion InformingRemindingTargetAudiencePersuading
20 AIDA and the Hierarchy of Effects PurchaseConvictionPreferenceLikingKnowledgeAwarenessAttentionInterestDesireActionCognitiveAffectiveConative
21 When Elements of Promotion Are Most Useful AdvertisingPersonalsellingEffectivenessSalespromotionPublicrelationsAwarenessKnowledgeLikingPreferenceConvictionPurchaseVery effectiveSomewhat effectiveNot effective
22 Factors that Affect the Promotion Mix Nature of the ProductStage in the ProductLife CycleTarget Market CharacteristicsType of Buying DecisionAvailable Funds$ $ $Push–and–Pull Strategies
23 Creating a Promotion Plan Analyse the MarketplaceIdentify Target MarketSet Promotion ObjectivesDevelop Promotion BudgetChoose Promotion Mix
24 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
25 Examples of Promotion Objectives Informative (Awareness) ObjectiveTo increase the top-of-mind awareness level for Black Cat peanut butter from 16 percent to 24 percentPersuasion (Attitudinal) ObjectiveTo increase the percentage of parents who feel that Black Cat peanut butter is the best peanut butter for their children from22 percent to 35 percentReminder ObjectiveTo remind consumers that Black Cat peanut butter is the creamiest peanut butter and is available at their nearest grocery and convenience stores
26 Techniques for Setting Promotion Budgets • Arbitrary Allocation• All - You - Can - Afford• Competitive Parity• Percent of Sales• Market Share• Objective and Task