1. Introduction to Promotion
Lecture One MKT 385
Introduction to Promotion

2. Integrated Marketing Communications
a concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines - for example, general advertising, direct response, sales promotion, and public relations- and combines these disciplines to provide clarity, consistency, and maximum communications impact.
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Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 1998 3 3

3. Elements of the Promotions/Communications Mix
Advertising
Sales Promotion
Publicity/PR Management
Personal Selling
Direct Marketing AND Social Media Marketing

4. Advertising “salesmanship in print” Albert Lasker
Generally Paid ( except PSAs)
Identifiable Sponsor
Mass Media
Inform or Persuade
Structured communication

5. Advertising Advantages Disadvantages Cost of Production Cost Effective
Emotional Appeals
Brand Equity
Changing technology with Interactive media (Internet) and nontraditional media (blimps, shopping carts)
Disadvantages
Cost of Production
Clutter
Zipping/Zapping

6. The Communication Process
Source
Encoding
Message
Channel
Decoding
Receiver
Feedback
Noise

7. How Does The Communication Process Relate to Advertising ?
Source
Encoding
Message
Channel
Decoding
Receiver
Feedback
Noise
Sponsor
Appeal Design
Message
Autobiographical, narrative, drama
Medium
Reception process
Consumer
Implied (ideal), sponsorial (management), actual
Purchase/Call
Distractions

8. Functions and Effects of Advertising
To identify products and differentiate
To communicate information about the product, features and location
To stimulate trial
To stimulate distribution
To build value, brand preference, loyalty
Lower Costs

9. Economic Role of Advertising
Market Power School
less price sensitivity
distraction
encourages loyalty
differentiates
Market Competition School
increases sensitivity
stimulates competition
lower prices for everyone!

10. Economic Impacts of Advertising
Value - perception of added value
Prices - are they raised or lowered?
Competition
Consumer Demand
Consumer Choice
Business Cycle

11. Advertising The Major Players
The Advertiser
The Agency
The Media

12. Classifications of Advertising
Advertising to Consumer Markets
Retail advertising, product advertisements, branding
PSAs
Advertising to Business Markets
Business to Business
Professional – teachers, lawyers, doctors
Trade – aimed at resellers
Agricultural – farmers and agribusiness
Advertising To The Consumer Market
National Advertising - advertising done by a company on a nationwide basis or most regions of the country that is targeted at the consumer market
Retail/Local Advertising - advertising done by major retailers or smaller local merchants to encourage consumers to patronize their stores or use their local services (banking, restaurants)
Primary versus Selective Demand Advertising - primary demand advertising - advertising designed to stimulate demand for the general product class or an entire industry
Selective demand advertising - advertising that focuses on creating demand for a specific company's product or service
Advertising To the Business and Professional Market
Industrial Advertising - advertising that is targeted at individuals who influence the purchase of industrial goods or other services
Professional Advertising - advertising targeted to professional groups such as doctors, lawyers, dentists or engineers
Trade Advertising - advertising directed to resellers such as wholesalers and retailers to encourage them to carry a company's products
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Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 1998 5 5

13. What is Marketing?
The process of planning and executing the conception, pricing, distribution and promotion of ideas, goods and services to create exchanges that satisfy the perceived needs, wants and objectives of individuals and organizations

14. 4 P’s Influence on Advertising
Product
Consumer packaged goods advertising
Service advertising
Hi-tech advertising
Price
Image advertising (brand)
Sale advertising
Price advertising

15. 4 P’s Influence on Advertising
Place (Distribution)
Global advertising – unified message
International advertising – specific messages by market
Promotion – see following slides!

16. Sales Promotion
Incentive or extra value to encourage the consumer to act in a certain fashion.
Examples: coupons, sweepstakes, trade shows, rebates, free samples

17. Sales Promotion Advantages/Disadvantages
Short-term sales boost
stimulates trial
incentives for intermediaries to cooperate
Sacrifice long-term performance for short term gain
Clutter
Sacrifice brand equity

18. Public Relations
the management function which evaluates public attitudes, identifies the policies and procedures of an individual or organization with the public interest, and executes a program of action to earn public understanding and acceptance.

19. Publicity
nonpersonal communication regarding the organization, product, service or idea that is not directly paid for nor run under identified sponsorship, usually coming from a news story, editorial, or announcement about an organization or its products and services.
Additional tools include: collateral materials such as press kits, instruction booklets, brochures, catalogs, fliers

20. Publicity/PR tools Advantages/Disadvantages
Credibility
Low Cost
Lack of Control
Negative Publicity very harmful and difficult to overcome
Miss the Target Audience

21. Personal Selling
involves the direct contact between the buyer and seller in which the seller attempts to persuade and assist the prospective customers to purchase the company’s products or service or to act on an idea.

22. Personal Selling Advantages/ Disadvantages
High cost per contact
uniformity of message delivery
Flexibility
Immediate Feedback

23. Direct Marketing
Any direct communication delivered the consumer to designed to generate a response or a transaction in the form of an order, request for information or visit
Direct mail
catalogs, specialty promos
Telemarketing
Direct selling
Direct response advertising

24. Direct Marketing Negatives Positives
Viewed often as sales oriented, not relationship oriented
Intrusive
Women working
Do Not Call Lists
Expensive per contact
Positives
Measurable results
Many forms work around customer schedules

25. Social Media Marketing
Recognizing and utilizing social media outlets to promote interest, communication and dialogue relating to a product, individual, service or event
Social Media can be utilized by developing pages, boosting posts, advertising, etc. to form relationships in the marketplace

26. Evolution of Advertising
Early Ads
Gutenberg’s invention of the printing press changed the world we live in …
Now we could become literate, communicate information and sell products!
1472 – first ad appeared in the form of a handbill tacked on church doors selling prayer books
By the early 1700’s clutter takes hold!
1704 – Boston Newsletter begins to carry ads and Ben Franklin makes them artsy!

27. Industrial Age and Ad Agencies
Second half of the 19th century through the 20th
Commodities markets saturated and branding began in the form of consumer packaged goods
Advertising primarily fell to wholesalers who disseminated information on goods
Volney Palmer set up business as a media buyer
N.W. Ayer & Sons was the first agency to charge commission based on space

28. Evolution of Advertising
Golden Age of Advertising ( )
Following the advent of radio, television again inspired creativity and advertising flourishes
Market segmentation, positioning, USP
Post Industrial Age
Demarketing to slow demand for products consuming and manufactured from natural resources

29. Global Interactive Age
Evolution of cable and satellite TV (segmentation), TiVo (ad skipping), digital technology (how to compete?)
Use of web sites, social networking, downloadable entertainment with sponsorships