Chapter 9 PROMOTION

Objectives Developing & Managing an Advertising Program Deciding on Media & Measuring Effectiveness Sales Promotion Public Relation Principles of Personal Selling

Major Decisions in Advertising Objectives Setting Major Decisions in Advertising Budget Decisions Message Decisions Media Decisions Campaign Evaluation

Advertising Objectives Specific Communication Task Accomplished with a Specific Target Audience During a Specific Period of Time Informative Advertising Build Primary Demand Persuasive Advertising Build Selective Demand Comparison Advertising Compares One Brand to Another Reminder Advertising Keeps Consumers Thinking About a Product.

The Five Ms of Advertising Message Message generation Message evaluation and selection Message execution Social-responsibility review Media Reach, frequency, impact Major media types Specific media vehicles Media timing Geographical media allocation Money Factors to consider: Stage in PLC Market share and con- sumer base Competition and clutter Advertising frequency Product substituta- bility Mission Sales goals Adver- tising objectives Measure- ment Communi- cation impact Sales

Advertising Budget Factors Market Share & Consumer Base Competition & Clutter Stage in the Product Life Cycle Advertising Frequency Product Substitutability

Profiles of Major Media Types Newspapers Advantages: Flexibility, timeliness; good local market coverage; broad acceptance, high believability Limitations: Short life; poor reproduction quality; small pass-along audience Television Advantages: Combines sight, sound, motion; high attention; high reach; appealing to senses Limitations: High absolute costs; high clutter; fleeting exposure; less audience selectivity Direct Mail Advantages: Audience selectivity; flexibility, no ad compe- tition within same medium; allows personalization Limitations: Relative high cost; “junk mail” image

Profiles of Major Media Types Radio Advantages: Mass use; high geographic and demographic selectivity; low cost Limitations: Audio only; fleeting exposure; lower attention; nonstandardized rates; fragmented audiences Magazines Advantages: High geographic and demographic selectivity; credibility and prestige; high-quality reproduction; long life; good pass-along readership Limitations: Long ad purchase lead time; waste circulation; no guarantee of position Outdoor Advantages: Flexibility; high repeat exposure; low cost; low message competition Limitations: Little audience selectivity; creative limitations

Classification of Advertising Timing Patterns Concen- trated (1) (2) (3) Level Rising Falling Alternating (4) Continuous (8) (7) (6) (5) (9) Inter- mittent (10) (11) (12) Number of messages per month Month

Advertising Strategy Message Execution Testimonial Evidence Slice of Life Turning the “Big Idea” Into an Actual Ad to Capture the Target Market’s Attention and Interest. Lifestyle Typical Message Execution Styles Scientific Evidence Fantasy Technical Expertise Mood or Image Personality Symbol Musical

Advertising Evaluation Advertising Program Evaluation Advertising Evaluation Communication Effects Is the Ad Communicating Well? Sales Effects Is the Ad Increasing Sales?

Why the increase in Sales Promotion? Growing retailer power Declining brand loyalty Increased promotional sensitivity Brand proliferation Fragmentation of consumer market Short-term focus Increased managerial accountability Competition Clutter Retailer - scanner data, industry consolidation -MFGs want to break through Loyalty & Sensitivity & proliferation - we did that Frag - more media, more targeted Short-term&Account - US Business, stock mkt, not BE

Long-Term Promotional Allocation 10 20 30 40 50 60 1986 88 90 92 94 1996 Year %t of total - 3 yr.MA Trade Promo Media Adv Cons. Promo Cox Direct 19th Annual Survey of Promotional Practices

Channels of Sales Promotions MANUFACTURER CONSUMER Consumer Promotions RETAILER Trade Promotions Push Pull Retail Promotions

Consumer Promotion Consumer-Promotion Objectives Consumer-Promotion Tools Entice Consumers to Try a New Product Point-of-Purchase Displays Premiums Price Packs Cash Refunds Coupons Samples Patronage Rewards Games Sweepstakes Contests Advertising Specialties Lure Customers Away From Competitors’ Products Get Consumers to “Load Up’ on a Mature Product Hold & Reward Loyal Customers Consumer Relationship Building

“Deal Proneness,” Liechtenstein, Burton, & Netemeyer, Journal of Retailing, Summer 1997 Examination of “deal proneness” among consumers in a supermarket setting Surveys & Grocery Receipts used Eight types of deals: Cent-off, One-free, Gift, Display, Rebate, Contest, Sale, & Coupon

“Deal Proneness,” Liechtenstein, Burton, & Netemeyer Cluster analysis yielded two interpretable results: 49% are “deal prone,” 51% not 24% High “Deal prone,” 50% intermediate, 26% deal insensitive “Deal-proneness” a generalized construct - (crosses type of promotion) Younger & Less educated more likely to be deal prone

Trade Promotions Trade-Promotion Tools Trade-Promotion Objectives Specialty Advertising Items Contests Free Goods Buy-Back Guarantees Allowances Price-Offs Patronage Rewards Push Money Discounts Premiums Displays Persuade Retailers or Wholesalers to Carry a Brand Give a Brand Shelf Space Promote a Brand in Advertising Push a Brand to Consumers

Business-to-Business Promotion Business-Promotion Objectives Business-Promotion Tools Generate Business Leads Conventions Trade Shows Sales Contests Stimulate Purchases Reward Customers Motivate Salespeople

Major Public Relations Tools Web Site News Public Service Activities Speeches Corporate Identity Materials Father of PR was Edward Bernays, turns out he was Freud’s nephew! Value of some good brand publicity/movie placements: SPECIAL EVENTS: Reeses Pieces sales jumped 85% after E.T. Mumford High sold $1M in school shirts after Beverly Hills Cop CA. Raisin Board paid $25K for bus-stop sign and raisin eating scene in Back to the future. Coke and Pepsi scout out roles full time. Special Events Audiovisual Materials Written Materials

When might you decide to use Personal Selling? Tight budget (straight commission) Concentrated Market Few buyers High value product Product must be customized Personal contact important Must demonstrate product Product involves trade-in/up

Designing the Sales Force Sales force objectives Sales force strategy Sales force structure Sales force size Sales force compensation

Sales Force Structures Territorial Product Complexity Market

Workload Approach to Sales Force Size Classify customers by size Determine desirable call frequencies Determine total sales calls needed per year Determine average number of sales calls per sales representative per year Divide total by number per rep

Sales Force Compensation Fixed Variable Expense Allowances Benefits

Recruiting & selecting sales representatives Managing the Sales Force Training sales representatives Supervising sales representatives Motivating sales representatives Evaluating sales representatives

Time and Duty Analysis Preparation Travel Administration Selling Food & Breaks Waiting

Sales Representative Motivation Effort Performance Rewards Satisfaction

Sources of Information Evaluating Salespeople Call Reports Work Plan Sources of Information Annual Territory Marketing Plan

Improving Sales Force Effectiveness Training in sales techniques & professionalism Negotiation skills Relationship-building skills

The Zone of Agreement $ Final contract Zone of agreement Seller’s surplus Buyer’s surplus x Final contract $ Seller’s reservation price (seller wants s or more) Seller wants to move x to the right s Buyer’s reservation price (buyer wants b or less) Buyer wants to move x to the left b

Performance Evaluation Current-to-Past Customer Satisfaction Qualitative Evaluation

Steps in the Selling Process Step 1. Prospecting and Qualifying Steps in the Selling Process Step 2. Pre-approach Identifying and Screening For Qualified Potential Customers. Step 3. Approach Learning As Much As Possible About a Prospective Customer Before Making a Sales Call. Step 4. Presentation/ Demonstration Knowing How to Meet the Buyer to Get the Relationship Off to a Good Start. Telling the Product “Story” to the Buyer, and Showing the Product Benefits.

Steps in the Selling Process Step 5. Handling Objections Steps in the Selling Process Step 6. Closing Seeking Out, Clarifying, and Overcoming Customer Objections to Buying. Asking the Customer for the Order. Step 7. Follow-Up Following Up After the Sale to Ensure Customer Satisfaction and Repeat Business.

Alternative Steps: Find ’em Sell ‘em Keep ‘em Grab ‘em Show ‘em Answer ‘em Sell ‘em Keep ‘em