1. Promotion

2. Agenda Topic 19: The Marketing Communications Program (Chapter 18)
Topic 20: Advertising (Chapter 20)
Video: TV commercials
Topic 21: Sales Promotion (Chapter 20)
Video Case: Rollerblade
Topic 22: Personal selling/ Salesforce management (Chapter 19)

3. The Marketing Communications Program
Topic 19
The Marketing Communications Program

4. Promotion
Promotion is the element is an organization’s marketing mix that serves to inform, persuade, and remind the market regarding the organization and/or its products and services

5. Marketing Communication Methods
Personal selling
personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships
Advertising
any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor
Sales promotion
short-term incentives to encourage the purchase or sales of a product or service

6. Marketing Communication Methods (cont.)
Public relations
planned communication effort by an organization to contribute to generally favorable attitudes and opinions toward an organization and its products
Example: Labatt sponsors the Montreal International Jazz Festival
Publicity
special form of public relations that involves news stories about an organization or its products

7. Marketing communication process
Message as
intended
Encoding
Message
channel
Decoding
Message as
received
Noise
Response
Feedback

8. Marketing communication process (cont.)
Message as intended: original promotional idea in marketer’s mind
Encoding: changing an idea into a specific form of message
Message channel: the media and vehicle of the message
Decoding: process of a receiver’s perception and interpretation of the message
Message as received: the message perceived and interpreted by a receiver
Response: change of a receiver’s knowledge, beliefs, attitude, feelings, and behavior
Feedback: the part of the receiver’s response communicated back to the sender
Noise: the unplanned distortion during the communication process

9. Goals of Promotion Economic perspective Marketing perspective
increase a product’s sales volume at given price by shifting the demand curve to the right
affect the demand elasticity for a product so that it is more inelastic when the price is increased and more elastic when the price is decreased
Marketing perspective
to inform, persuade, and remind prospective customers about a company and its products

10. A shift in the demand curve to the right
Changing the elasticity of the demand curve
Demand
with promotion
Demand
with promotion
Price
Price
Demand
without
promotion
Demand
without
promotion
Quantity
Quantity

11. Marketing Communication Mix
A combination of personal selling, advertising, sales promotion, public relations, and publicity
Factors to be taken into consideration
Target market
Nature of the product
Stage of the product life cycle
Promotional fund available

12. Marketing Communication Mix: Factors to be considered
Target market
Readiness to buy
awareness ® knowledge ® liking ® preference ® conviction ® purchase
Other target market factors

13. Marketing Communication Mix: Factors to be considered (cont.)
Stage of the Product life cycle

14. Marketing Communication Mix: Factors to be considered (cont.)
Nature of product
Funds available

15. Marketing Communication Mix: Push Strategy
involves “pushing” the product through distribution channels to final consumers
a push strategy directs promotional efforts at channel members to induce them to carry the product and to promote it
Producer marketing
activities
(personal selling,
trade promotion, other)
Reseller marketing
activities
(personal selling, advertising
consumer promotion, other)
Consumers
Producer
Retailers &
wholesalers

16. Marketing Communication Mix: Pull strategy
involves building up consumer demand, which in turn motivates retailers and wholesalers to carry the product
a pull strategy has the promotion directed at the final consumers to induce them to buy the product
Producer marketing activities
(consumer advertising, sales promotion, other)
Consumers
Producer
demand
Retailers &
wholesalers
demand

17. Marketing Communication Mix: Push and Pull strategy
Push strategy is effective when
there is no brand loyalty in a category
brand choice is made in the store
impulse item
product benefits are well understood
Pull strategy is effective when
there is high brand loyalty
high involvement in the category
people perceive difference between the brands
people choose brand before they go to the store

18. Marketing Communication Budget
Percentage of sales
setting the promotion budget as a certain percentage of current or forecasted sales
Advantages
simple to use
setting the cost of marketing communication in relations to sales income
Disadvantages
sales as a cause of promotion rather than sales as a result of promotion
budgeting based on availability of funds rather than on market opportunity or long-term plans
the basis for choosing a specific percentage?

19. Marketing Communication Budget (cont.)
All available funds
frequently used for new products with the objective to build sales and market share rapidly
Disadvantage
uncertain annual promotion budget
Follow competition
setting the promotion budget to match competitors’ outlays
Disadvantages
competitors’ decision might not be appropriate
competitors’ goal might be different

20. Marketing Communication Budget (cont.)
Task or Objectives
Setting promotion budget by
1. defining specific objectives
2. determining the tasks that must be performed to achieve these objectives
3. estimating the costs of performing these tasks
Advantages
emphasis on the relationship between promotional cost and promotional outcome
Disadvantages
difficult to use

21. Topic 20
Advertising

22. Advertising
Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor
All advertisements have four common features
a verbal and/or visual message
a sponsor who is identified
delivery through one or more media
payment by the sponsor to the media carrying the message

23. Types of Advertising Target audience What is being advertised
Consumer advertising generally appears in mass media and is directed to end consumers
Business-to-Business advertising is directed to a business market
What is being advertised
Product advertising is designed to promote the sale of a specific product or service
Institutional Advertising promotes the firm or tries to create a positive image

24. Types of Advertising (cont.)
Objectives of Ad
Primary-demand advertising is intended to stimulate use of a category products
Selective-demand advertising is intended to encourage purchase of a particular brand or the product and services of a specific firm
Co-operative advertising
co-operative advertising involves the sharing of the cost of advertising by two or more sponsors: a manufacturer and retailers (vertical) or a group of retailers (horizontal)

25. Advertising Decision Process
Creating
a message
Defining
advertising
objectives
Establishing
ad budget
Evaluation
Selecting
media

26. Defining Advertising Objectives
To inform
to inform consumers about a new product or features and to build primary demand
To persuade
to build selective demand for a brand by persuading consumers
To remind
to keep consumers thinking about a product

27. Establishing Ad Budget
Percentage of sales
All available funds
Follow competition
Task or objectives

28. Creating a message A successful Ad must Attention
hold the attention of the target audience
influence the target audience in desired way
Attention
Attract attention by using:
novelty and contrast
eye-catching pictures and headlines
distinctive formats
message size and position
color,shape, and movement

29. Creating a message Influence Type of appeals used in ads comparative
humor
fear appeal
mood
celebrity endorsers

30. Selecting Media Media selection steps Decide type of media
magazines, newspapers, television, radio, direct mail, world wide web
Decide category of medium
general interest magazines, magazines for housewives
Decide type of vehicle
specific type of magazine (e.g., Maclean’s, Toronto Life)

31. Selecting Media Factors to be considered selecting media and vehicles
objective of the ad
audience coverage
requirements of the message
time and location of the buying decision
media cost
Cost per thousand (CPM) person reached

32. Selecting Media (Cont.)

33. Evaluating the Ad effort
The effect of advertising on sales
It is difficult to measure
Sales are influence by all marketing mix variables
Ads have different goals
Ads have an effect over time

34. Evaluating the Ad effort
Methods for Ad effectiveness evaluation
Direct test
the effect of an ad to the sales volume
possible where ad stimulate immediate sales
Indirect test
Advertising recall test
Recognition, Aided recall, Unaided recall
Pretests
Pre-Ad test ® Exposure to an ad ® Post-Ad test

35. Topic 21
Sales Promotion

36. Sales Promotion Sales Promotion
demand-stimulating devices designed to supplement advertising and facilitate personal selling
Types
coupons, premiums, in-store display,trade shows, samples, in-store demonstration, and contests
sales promotions are short-term in orientation

37. Trade promotion and Consumer promotion
Manufacturers
Trade promotion
Intermediaries
Consumer
promotion
Consumers

38. Sales Promotion Decision Process
Defining
sales promotion
objectives
Determining
budget
Selecting
appropriate
techniques
Evaluation

39. Defining sales promotion objectives
Sales promotion goals
stimulating business-user or household demand for a product
improving the marketing performance of intermediaries and sales people
supplementing advertising and facilitating personal selling

40. Selecting appropriate sales promotion techniques
Type of sales promotion
Sales promotion directed at consumers
Sales promotion directed at intermediaries
Sales promotion directed at producer’s own sales force
Factors to be considered for selecting sales promotional devices
nature of target audience
promotional objectives: push vs.pull
nature of the product
cost of device
current economic conditions

41. Selecting appropriate sales promotion techniques
Sales promotion directed at consumers (= consumer promotion)
Samples
most effective, but most expensive
in-store, by mail, attached to another product, attached to print ad
Coupons
low redemption rate
by mail, in newspapers and magazines, shelf-dispensers

42. Selecting appropriate sales promotion techniques
Cash rebates
price reduction occurs after purchase
Premiums (gifts)
goods offered free or at low-cost as an incentive to buy a product
e.g., free gifts for the purchase of cosmetics
Prizes (contests, sweepstakes, games)
offering chance to win cash, trip, or merchandise as a result of purchasing something

43. Selecting appropriate sales promotion techniques
Point-of-Purchase displays/ demonstrations
displays and demonstrations at point-of-purchase
Advertising specialties
useful articles (e.g., baseball caps, pens, key chains, t-shirts) imprinted with an advertiser’s name
Patronage rewards
cash or other rewards offered for regular use of company’s products or services
e.g., frequent flyer plans, coffee cards

44. Selecting appropriate sales promotion techniques
Sales promotion directed at intermediaries (= trade promotion)
discounts
quantity discount
allowances
advertising allowance
display allowance
free goods

45. Selecting appropriate sales promotion techniques
Sales promotion directed at producer’s own sales force
sales contests
incentive programs for achieving pre-determined sales goals
specialty advertising
e.g., pens, pencils, calendars, memo pad, etc.

46. Evaluation of sales promotion
It is easier to evaluate sales promotion results
most sales promotions have definite starting and ending points
most sales promotions are designed to impact sales directly

47. TV commercials Two humor ads People pay attention
Beer: Holster Pils
Airline
People pay attention
Generate positive feeling
Sometimes the message is not clear

48. TV commercials Ads HBO Ads Attitude toward the brand
Why many ads do not deliver strong arguments
Cognitive
response
Attitude
toward
the brand
Ads
Attitude
toward Ad

49. TV commercials
Sprite
comparative advertising
persuasive goal