BASIC MARKETING For use only with Perreault/Cannon/ McCarthy texts, © 2011 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Chapter 14 Promotion – Introduction to Integrated Marketing Communication

At the end of this presentation, you should be able to: 1.Know the advantages and disadvantages of the promotion methods a marketing manager can use in strategy planning. 2.Understand the integrated marketing communications concept and why most firms use a blend of different promotion methods. 3.Understand the importance of promotion objectives. 4.Know how the communication process affects promotion planning. 5.Know how direct-response promotion is helping marketers develop more targeted promotion blends.

At the end of this presentation, you should be able to: 6.Understand how customer-initiated interactive communication is different. 7.Know how typical promotion plans are blended to get an extra push from wholesalers and retailers and help from customers in pulling products through the channel. 8.Understand how promotion blends typically vary over the adoption curve and product life cycle. 9.Understand how to determine how much to spend on promotion efforts. 10.Understand important new terms.

Marketing Strategy Planning Process

Promotion and Marketing Strategy Planning (Exhibit 14-1) CH 16: Advertising & Sales Promotion Promotion methods Managing promotion Effective communication Blending promotion CH 15: Personal Selling and Customer Service CH 14: Promotion Intro. to Integrated Marketing Communications

Several Promotion Methods Are Available Mass Selling Personal Selling Sales Promotion Different methods of promotion AdvertisingPublicity

Contests Coupons Aisle displays Samples Trade shows Point-of-purchase materials Banners & streamers Frequent buyer programs Sponsored events Contests Coupons Aisle displays Samples Trade shows Point-of-purchase materials Banners & streamers Frequent buyer programs Sponsored events Sales Promotion Tries to Spark Immediate Interest (Exhibit 14-2) Price deals Promotion allowances Sales constests Calendars & gifts Trade shows Meetings Catalogs Merchandising aids Videos Price deals Promotion allowances Sales constests Calendars & gifts Trade shows Meetings Catalogs Merchandising aids Videos Aimed at wholesalers or retailers Contests & Bonuses Meetings Portfolios & Displays Sales aids Training materials Contests & Bonuses Meetings Portfolios & Displays Sales aids Training materials Aimed at company’s own sales force Aimed at consumers or users

Sales Promotion

Someone Must Plan, Integrate, and Manage the Promotion Blend Sales Promotion Managers Advertising Managers Sales Managers Marketing Managers Integrated Marketing Communications

Which Method to Use Depends on Promotion Objectives Persuading Informing Reminding

Reminding May Be Enough © 2011 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Promotion Objectives Relate to the Adoption Process and AIDA Mode (Exhibit 14-3) Promotion ObjectivesAdoption ProcessAIDA Model Informing Awareness Interest Attention Interest Persuading Evaluation TrialDesire Reminding Decision ConfirmationAction { } }

Interactive Exercise: AIDA

The Traditional Communication Process (Exhibit 14-4) Noise Source Receiver Encoding Message channel Decoding Feedback

Encoding & Decoding Depend on a Common Frame of Reference (Exhibit 14-5)

Checking Your Knowledge Ron Popeil has been a pioneer in the use of direct-response television “infomercials.” Over the years his infomercials have promoted many products, including the Showtime Rotisserie Barbecue, a food dehydrating machine, and the world-famous “Veg-O-Matic.” The chief advantage of the infomercial is that it provides plenty of time to describe and demonstrate a product’s benefits in detail. The choice of the infomercial is related mainly to the _________ element of the communication process. A. message channel B. encoding C. decoding D. feedback E. noise

Encoding and Decoding © 2011 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Integrated Direct-Response Promotion Is Very Targeted Target Directly With a Database More Than Direct Mail Ethical Concerns

A Model of Customer-Initiated Interactive Communication (Exhibit 14-6) Noise Source’s message Message channel Search Select a topic Receiver (customer)

How Typical Promotion Plans Are Blended and Integrated (Exhibit 14-7)

Other Promotional Elements of Pushing

Pulling – Demand Pulls the Product through the Channel (Exhibit 14-7)

An Example of Pulling

Checking Your Knowledge Fido, Inc. is a producer of dog food and is getting ready to introduce a new brand. The firm’s marketing research department learns that a competitor is planning to launch another brand about two weeks after Fido’s launch. Fido’s marketing department quickly mails a set of dated coupons to several thousand consumers in a purchased database of dog owners, encouraging them to ask for the new Fido brand in their favorite store and to stock up on the new brand using the coupons. This is an example of: A. pulling. B. noise. C. pushing. D. encoding. E. decoding.

Adoption Processes Can Guide Promotion Planning (Exhibit 14-8)

Appeal for Innovators

Stimulating Adoption of an Image © 2011 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Promotion Varies Over the Life Cycle “This new idea is good” “Our brand is best” “Our brand is better, really” “Let’s tell those who still want our product”

Nature of Competition Requires Different Promotion

Setting the Promotion Budget Percentage of Sales Task Method

 Budget based on percent of past or expected sales  most common approach  main advantage is ease  can lead to major problems, including cutbacks when more money is needed  Task method—budgets for what needs to be accomplished  usually the sensible approach  requires that activities be evaluated against objectives  Same ideas apply in budgeting other types of marketing activities Setting the Promotion Budget

Which of the following is the main type of "mass selling"? A. Personal selling. B. Publicity. C. Sales promotion. D. Advertising. E. Both B and D. Study Question 1

A car company sent three automobile magazines some technical information and explanations about the features of its innovative new model. One of the magazines later printed a story about the car. This is an example of: A. personal selling. B. advertising. C. publicity. D. sales promotion. E. None of the above Study Question 2

Blending the firm's promotion efforts to convey a complete and consistent message is the goal of: A. Sales management communications. B. Sales promotion communications. C. Integrated promotional marketing. D. Integrated marketing communications. E. Integrated sales promotion. Study Question 3

What basic promotion objective should be emphasized by a producer introducing a really new product which satisfies customer needs better than any existing product? A. Persuading B. Reminding C. Maximizing D. Informing E. Communicating Study Question 4

What basic promotion objective should be sought by a producer whose Product is very similar to its many competitors' Products? A. Persuading B. Promoting C. Communicating D. Informing E. Reminding Study Question 5