5Unit 11 Essential Question How is promotional knowledge and skill in communicating information used to achieve a desired marketing outcome?
6Essential Question 1 Promotion What is the role of promotion as a marketing function?
7What is promotion?Any form of communication used by a business to inform, persuade, or remind people about its products and improve its image.There are two forms of promotion:ProductInstitutional
8Forms of Promotion Product: Institutional: Creates an interest in the product.Introduces new products and businesses.Explains a product.Supports personal selling efforts.Creates new markets.Institutional:Creates a favorable impression and goodwill for a business or an organization.Presents information about the companies role in the community.
9Essential Question 2 Promotion What are the types of promotion?
10Types of Promotion Advertising Public Relations Direct Marketing Sales PromotionPersonal SellingDR. DIWAKAR NAGULA last week opened Southeast Spine & Rehabilitation at 130 North Gross Road, Kingsland. He specializes in treating chronic pain with traditional medicine as well as chiropractic manipulation and physical therapy. (Tribune & Georgian photo/Renee M. Liss)
11Types of PromotionAdvertising: Paid presentation of ideas, goods, or services directed toward a mass audience
12Types of PromotionPublic Relations: Activities used by an organization to create a favorable image for itself, its products, or its policies.
13Types of PromotionDirect Marketing: Type of advertising directed to a targeted group of prospects and customers rather than a mass audience.Snail Mail
14Types of PromotionSales Promotion: Marketing activities – other than advertising, public relations, and personal selling – that are used to stimulate purchasing and salesUsually involves short term activities.Offers some type of incentive: product earned or given awayCan be successfully used in all channels of distribution.
15Types of Promotion Types of Sales Promotions Trade Promotions: Activities designed to get support for a product from manufactures, wholesalers, and retailersPromotional AllowancesCooperative AdvertisingSlotting AllowancesSales Force PromotionsTrade Shows and Conventions
16Promotional Mix Types of Sales Promotions Consumer Promotions: Strategies that encourage customers to buy a product or serviceCouponsPremiumsDealsIncentivesProduct SamplesSponsorshipsPromotional Tie-InsProduct PlacementVisual Merchandising
17Types of PromotionPersonal Selling: Oral presentations to one or more potential buyers with the intent of making a sale.The responsibility of sales personnel.Order - taking personnelOrder - getting personnelThe most flexible and individualized type of promotion available.
18Essential Question 3 Promotion What are the elements of the promotional mix?
19Promotional MixPromotional Mix: Combination of promotional strategies and cost-effective allocation of resourcesStrategies are designed to complement one anotherAdvertising and direct marketing create awareness of a productPublic relations creates a favorable image and brand recognitionSales promotions stimulate sales and reinforce advertising and selling effortsPersonal selling builds on the previous by completing the sale
20Promotional Mix Special promotional mix strategies Push Policy: Uses a mix of personal selling, advertising, and buying discounts to push a manufactures products onto the retailer in the distribution channel.Pull Policy: Uses a mix of local and national advertising, in-store displays, sales promotion, and public relations to reach customers to create a demand which will pull the product into the retail outlet.
21Essential Question 4 Promotion What are the different promotional channels used to communicate with targeted audiences?
22Promotional ChannelsPromotional Channel: Method or means of communication used inform customers about products. They include:Advertising media (Newspaper, TV, etc.)Social media (Twitter, Facebook, etc.)Digital media (CDs, DVDs, etc.)Word-of-mouthDirect marketing (Postal mail, )Sales promotion (Coupons, Samples, etc.)Trade-show/exposition participationPublic relations activities
23Essential Question 5 Promotion What are the different types of advertising media and associated costs?
30Media CostsNewspaperClassified Ad: Advertise everything from services performed to houses for sale to job openings.Display Ad: Involve creative illustration of the product being advertised.
31Media CostsNewspaperRun-of-Paper Rate: Allows the newspaper to decide where to run the ad in the paper.Open Rate: Rate charged to businesses that advertise infrequently.Contract Rate: Discounted rate offered to business that advertise more frequently and for a specified period of time.
32Media CostsMagazineBleed: Ads are printed to the very edge of the page, leaving no white border. Generally costs 15 to 20 percent extra.Black-and-White Rates: Lowest rates offered and the ads are in black and white.Color Rates: Rates increase for each color added.Full-Color: The most expensive rate and all four print colors are used.
33Media CostsMagazinePremium Position: Rates determined as to where the ad is placed in the magazine.Frequency Discounts: Offered to advertisers who run the same ad several times during the year.Commission: A percentage of sales given by the magazine to the advertising agency for placing the ad for the advertiser.Cash Discounts: Offered to businesses for paying the bill earlier than its due date.
34Media Costs Radio Television Network Radio Advertising: Broadcast from a studio to all affiliated radio stations.National Spot Radio Advertising: Used by national firms to advertise on a local station-by-station basis.Local Radio Advertising: Used by local business for its target market.TelevisionVary with time of day. The most expensive is prime time 7 to 11 P.M.
35Media Costs CPM CPM = cost of ad X 1000 Circulation Cost Per Thousand Cost to expose 1000 readers to the ad.CPM = cost of ad X 1000Circulation
36Media Costs Facebook Twitter LinkedIn All use CPM rates on clicks, pass-through rates, likes, comments, retweets, etc.
37Essential Question 6 Promotion What are the components of advertisements?
38Advertisement Components Border: Separates the ad from the surrounding typeHeading: The key part of the sales message, may also contain subheads that either clarify or amplify the thought in the headlineIllustrations: Most effective way to draw the reader’s attention, illustrations that takes up 50 percent or more of the ad space increases readership by as much as 37 percent
39Advertisement Components Price: Price is presented in several ways:As part of the headingThe core the ad is built aroundPreceding the copyIn the text space.White space: Use as much as possible to minimize distractions and draw attention to what matters mostDoes not have to be white – just absent of illustrations and text.
40Advertisement Components Body copy: Expands benefits offered in the headline and should be written as though you were making friendly, personal conversationSignature: Is often a company logo or logotype and should not overpower other important aspects of the advertisement
41Advertisement Components The one second test: A way of determining whether a reader can tell at a glance what the advertiser is sellingColor: Achieve contrast in layout by effective use of different size type, bold type and colorCreativity: Simplicity, focal point and sequence in mind, will make the ad more visually appealing
43Essential Question 7 Promotion What are the various public relations activities?
44Public RelationsPublic Relations: The establishment and maintenance of a good image for the company, its products and services.Types of Public RelationsNews Releases: An announcement sent by a business or organization to media outletsFeature ArticlesPhotosPress Conference
45Public Relations Types of Public Relations Publicity: Involves bringing news or newsworthy information to the public’s attentionBuilds a business’ image.Publicity is free.Not much control over the message being sent to the public.
46Essential Question 8 Promotion What are the differences between internal and external audiences for public relations activities?
47Internal Public Relations Internal public relations activities are activities designed to keep groups within a company informed about various activities in order to maintain a good image for the company, its products and services.Internal audiences may include:Staff / EmployeesTop ManagementBoard of Directors
48External Public Relations External public relations activities are activities designed to keep groups outside a company informed about various activities in order to maintain a good image for the company, its products and services.External audiences may include:General Public / CustomersPartner OrganizationsDonors / Funders
49Essential Question 9 Promotion What is the nature of a promotional plan?
50Promotional Plan Contents of the Promotional Plan Objectives: Have a clear starting position; awareness of opinions, behavior and knowledge of the target audience; and available time and resources.Market Targets: Decide who exactly is to be the audience. Targeting the promotional activities and communications message to a specific audience guarantees a higher rate of success or return on investment.
51Promotional Plan Contents of the Promotional Plan The Message: There are three principles that should be remembered when developing the communications or promotional message:1. The KISS Principle (Keep It Simple Stupid)2. The AIDA Principle (Attention/Interest/Desire/Action)3. Communication objectives:• to be received (heard or read)• to be understood• to be accepted• to get action (change of behavior or attitude)
52Promotional Plan Contents of the Promotional Plan Estimated Budget: Determine a preliminary promotions budget. This initial estimate will be modified as the planning process proceeds and formal quotations are obtained.Promotional Elements (Tactics): Among the various elements of promotions are advertising, personal selling, reseller support, publicity, sales promotion and supplemental activities such as public relations.
53Essential Question 10 Promotion How are activities coordinated in a promotional plan?
54Coordinating Promotional Mix Ensure all the communication channels used will be good exposure for whatever is being promotedEnsure the communication channels used will appeal to the target marketYounger demographics are not going to read the newspaper as much as a social networkingThe mix should reflect who it is supposed to appeal to
55Coordinating Promotional Mix Ensure all strategies send the same message about the product or businessEnsure strategies chosen fit the product or businessFree samples work for food/beverage products but not major clothing wear such as shirts/pants