Promotional Concepts and Strategies Chapter 17

Section 17.1 The Promotional Mix

Promotion in Marketing Promotion is persuasive communication. Promotional techniques to enhance their public image and reputation, and to persuade people to value their products. Goals of promotional activities is AIDA A – first Attract I – then build Interest D – Desire A – finally ask for Action

Promotion in Marketing A business uses product promotion to convince prospects (potential customers) to select their goods or services instead of a competitors brand. Promotional activities include: Explain major features and benefits Identify where it is sold Advertise sales Answer customer questions Introduce new offerings

Promotion in Marketing Institutional promotion is a promotional method used to create a favorable image for a business, help it advocate change, or take a stand on trade or community issues Promotional activities include Website maintenance Does not directly sell a certain product

Examples of Each Different Type of Promotion The Promotional Mix Examples of Each Different Type of Promotion

Companies and nonprofit organizations rely on promotion. The Promotional Mix Promotion in Marketing Companies and nonprofit organizations rely on promotion.

Personal selling Advertising Direct marketing Sales promotion Types of Promotion in the Promotional Mix (A combination of 5 basic types of promotion) Personal selling Advertising Direct marketing Sales promotion Public relations

1. Personal Selling Generate direct contact with prospects and customers Examples include: personal meetings, in- home demonstrations, e-mail and telephone correspondence Most expensive forms of promotion

The Promotional Mix Types of Promotion in the Promotional Mix Personal Selling Direct contact Expensive

2. Advertising A form of non-personal promotion To promote ideas, goods, or services in a variety of media outlets Examples include billboards, business cards, brochures, Internet, magazines, newspapers, phone directories, grocery store receipts, radio, TV, sports arenas, cars and buses, restaurant menus and web sites.

The Promotional Mix Types of Promotion in the Promotional Mix Personal Selling Advertising Direct contact Advertising is everywhere Expensive

3. Direct Marketing A type of promotion that companies use to address individuals directly and not through a third party medium (such as TV, radio, or the internet)

Direct Marketing Direct Mail Telemarketing E-marketing Sent via standard mail to a home or business Telemarketing Customers are called on the phone and asked directly for goods or services E-marketing Any promotion delivered via the Internet (e-mail, mobile apps, social media, search engine marketing (paid search), web site optimization

Social Media Electronic media that allows people with similar interests to participate in a social network Facebook MySpace YouTube LinkedIn Twitter Helps businesses reach prospective customers

Direct Marketing Goals of direct marketing are to generate sales or leads for sales representatives to pursue Gives recipients an incentive to respond by visiting a store or Web site, calling a toll-free number, returning a form, or sending an e-mail Targeted customers receive special offers or incentives, such as money-off coupon

Direct Marketing Allows businesses to engage in one-way communication Congress passed the CAN-SPAM Act of 2003 Act requires senders of unsolicited commercial e- mail to give recipients a way to opt out of e-mails Prohibits the use of deceptive subject lines and headers Requires businesses to provide valid return addresses on e-mails.

The Promotional Mix Types of Promotion in the Promotional Mix Personal Selling Advertising Direct Marketing Direct contact Advertising is everywhere Mail Expensive E-marketing Telemarketing Social media

4. Sales Promotion According to AMA, sales promotion represents all marketing activities – other than personal selling, advertising and public relations – that are directed at business or retail customers to boost sales. Objectives are to: Increase sales Inform potential customers about new products Create positive business or corporate image

Sales Promotion Examples include Coupons Money-off Promotions Competitions Product Samples Point-of-Sale Displays

The Promotional Mix Types of Promotion in the Promotional Mix Personal Selling Advertising Direct Marketing Sales Promotion Direct contact Advertising is everywhere Mail Coupons Expensive E-marketing Money-off promotions Telemarketing Product samples Social media Displays

5. Public Relations and Publicity PR activities enable an organization to influence a target audience PR campaigns try to create influence general opinions and create a favorable image for a person, organization or a company, its products, or its policies Goal is to encourage media relations with reporters

Public Relations: New Releases Most important media tool An announcement that is sent to the appropriate media outlets Publicity is one tactic that public relations professionals use Publicity is free Not controlled by the business

Public Relations: Using Social Media Businesses interact with customers Get feedback on the company and its products and services Provide businesses with a way to obtain opinions and speak directly with potential and existing customers Potential to reach prospective customers is tremendous

Publicity Involves bringing news or newsworthy information about an organization to the public’s attention. Known as placement Can be used to make public aware of certain people, specific products or services, efforts by nonprofit agencies, political issue Publicity is free

The Promotional Mix Types of Promotion in the Promotional Mix Personal Selling Advertising Direct Marketing Sales Promotion Public Relations (PR) Direct contact Advertising is everywhere Mail Coupons News releases Expensive E-marketing Money-off promotions Social media Telemarketing Publicity Product samples Social media Displays

The Concept of Promotional Mix What is Promotional Mix? Combination of strategies and cost- effective allocation of resources Identify target market to measuring the results Strategies complement one another Elements of the mix must be coordinated

The Promotional Mix Types of Promotion in the Promotional Mix Types of Ads

Promotional Budget Roles of marketing dept Determines promotional mix Establishes the budget Allocates resources Coordinates the campaign Supervises outside resources Measures the results Determining the budget can be difficult It is the % of sales

The Push-Pull Concept Push Policy Manufacturer pushes product to the retailer Involves personal selling and sales promotion – trade shows Pull Policy Directs promotion towards consumers Create consumer interest and demand Involves advertising to consumers – premiums & samples

The Promotional Mix Types of Promotion in the Promotional Mix Put the number of users and nonusers in the appropriate spaces on the graphic organizer. Why or why not do you use these sites?

Develop a Promotional Mix The Promotional Mix The Concept of Promotional Mix Discuss the Six Steps of the Promotional Mix Develop a Promotional Mix

Section 17.2 Types of promotion

Sales Promotion definition Incentives that encourage customers to buy products or services Build brand awareness Encourage customers to try new products Increase purchases by current customers Reward customer loyalty

Types of Promotion Sales Promotions Sales promotions are usually supported by advertising activities that include trade promotions and consumer promotions.

Trade promotions Sales promotion activities designed to get support for a product from manufacturers, wholesalers, and retailers More money is actually spent on promoting to businesses than to consumers Good business ethics require that trade promotional payments and awards be offered in uniform manner.

Types of Promotion Sales Promotions Trade Promotions Promotional Allowances Cooperative Advertising Slotting Allowances Sales Force Promotions Trade Shows and Conventions

Types of Trade Promotions 1. Promotional Allowances Represent cash payments or discounts given by manufacturers to wholesalers or retailers for performing activities to encourage sales

2. Cooperative Advertising Manufacturer supports the retailer by helping to pay for the cost of advertising it product locally Known as cooperative advertising

3. Slotting Allowances A cash premium paid by a manufacturer to a retailer to help the retailer cover the costs of placing the manufacturer’s product on the shelves Range from a few thousand dollars to several million dollars per product Also pay retailer’s discount specials, charge for store shelves, penalties for poor sales, store advertising and display costs

4. Sales Force Promotions Awards given to dealers and employees who successfully meet or exceed a sales quota Sales force promotions vary, but can include bonuses or prizes such as merchandise awards or travel awards.

5. Trade Shows and Conventions Showcase a particular line of products Introduce new products, encourage increased sales of existing products & meet customers and partners in distribution

Consumer Promotions Sales strategies that encourage customers and prospects to buy a product or service Consumer promotions support advertising, personal selling and public relations efforts

Types of Consumer Promotions 1. Coupons Certificates that entitle customers to cash discounts on goods or services Placed inside product packages or in newspapers / magazines

2. Premiums Low-cost items given to consumers at a discount or for free Designed to increase sales by building product loyalty & attract new customers

2. Premiums Fundamental concept behind premium marketing is that people will be more motivated to buy a product when they are offered an added value gift in exchange Three types of premiums Factory Packs Traffic Builders Coupon Plans Drawback – customers think premiums are disposable

Three Different Types of Premiums and Descriptions Types of Promotion Sales Promotions Three Different Types of Premiums and Descriptions

2. Premiums Factory Packs, or in-packs, are free gifts placed in product packages or as a container premium Popular with cereal manufactures Traffic Builders – low cost premiums such as pens, key chains, pocket calendars, and coffee mugs New store or special event Coupon Plans – ongoing programs offering a variety of premiums in exchange for labels or coupons obtained from a product Ex – Send 3 soup labels in to manufacturer to receive a cookbook

3. Deals Deals or price packs offer short-term price reductions that are marked directly on the label or package Deal might “bundle” two-related products together, such as free wing chair with purchase of sofa

4. Incentives Are higher-priced products, awards, or gift cards that are earned and given away through contests- games of skill; sweepstakes-games of chance; and rebates. Create customer excitement & increase sales

5. Product Samples A free trial size of a product sent through the mail, distributed door-to-door, or given away at retail stores and trade shows

6. Sponsorship Company pays a fee for the right to promote itself and its products or services at or on a set location Negotiate the right to use logos and names on retail products

7. Promotional Tie-Ins, Cross-Promotion, Cross-Selling Cross-promotion and cross-selling campaigns Activities include sales promotional arrangements between one or more retailers or manufacturers They product mutually beneficially results

8. Product Placement A consumer promotion that involves using a brand-name product in a movie, television show, sporting event, or even in a commercial for another product +

9. Loyalty Marketing Programs Also called frequent buyer programs, reward, or frequent shopper programs reward customers by offering incentives for repeat purchases Frequent flyer promotions Customer loyalty means that customers are so satisfied with a brand or retailer that they continue to buy that brand or patronize that retailer

10. Online Loyalty Marketing Online versions of loyalty marketing programs Internet search engine award points

11. Point-of-purchase displays Displays designed primarily by manufacturers to hold and display their products High traffic area and promote impulse purchases Kiosks – web based or display screens that customers can use to interact with sales staff

Examples of Each Type of Consumer Promotion Types of Promotion Sales Promotions Examples of Each Type of Consumer Promotion

Examples of Different Types of Sales Promotions Types of Promotion Examples of Different Types of Sales Promotions