13-1 Chapter 13 Themes for Class Discussion Integrated Promotion Decisions Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

13-2 The best product at the right price in the right channel may not sell if customers don’t know it exists. What are the tools to develop this final element of the marketing mix?

13-3 Exhibit 13.2 Decision Sequence for Developing Promotion Mix Define the audience to be targeted (1) Set the promotional objectives (2) Set the promotion budget (3) Design the promotional mix (4) Evaluate the results (5)

13-4 How do we decide whom is to be targeted?

13-5 What do useful objectives of any kind look like? Promotional objectives? What should they specify?

13-6 What are the merits and drawbacks of various approaches for budget setting?

13-7 Which elements of the promotion mix are primary? When? Which often play supporting roles?

13-8 Exhibit 13.3 Strategic Circumstances and the Relative Importance of Personal Selling as a Promotional Tool Source: Adapted from David W. Cravens, Strategic Marketing (Burr Ridge, IL: Richard D. Irwin, 1987), p Advertising relatively important Personal Selling relatively important Small High large Much High Push Negotiated Few Large Low Small Little Low Pull Preset Many Number of customers Buyers’ information needs Size and importance of purchase Postpurchase service required Product complexity Distribution strategy Pricing policy Resources available for promotion

13-9 How should one decide which elements of the promotion mix should be used?

13-10 Exhibit 13.4 Comparing the Merits of the Promotion Mix Elements (Part 1) Promotion mix Element Amount of Information to be Communicated Credibility Control over the Message Cost to reach one customer Strategic suitability Advertising Varies: little information in a radio or a TV ad, to lots on a website LowGoodLow Well-suited to a Pull Strategy Personal Selling Lots of information Depends on the credibility of the company and the personality and sales skills of the salesperson Poor, but training helps Very high in developed countries, can be low elsewhere Well-suited to a Push Strategy

13-11 Exhibit 13.4 Comparing the Merits of the Promotion Mix Elements (Part 2) Promotion mix Element Amount of Information to be Communicated Credibility Control over the Message Cost to reach one customer Strategic suitability Sales Promotion Virtually no information Not Applicable Good Low and Self- liquidating: generally pays for itself as the product is purchased Consumer promotion supports a pull strategy. Trade supports a push strategy Public Relations Lots of information HighPoor Very low or nil Supports both pull and push strategies

13-12 So, if advertising is planned, what decisions must be made? Set advertising objectives (SMART)Set advertising objectives (SMART) Choose mediaChoose media Develop creative strategy and messagesDevelop creative strategy and messages Measure effectiveness: pre or postMeasure effectiveness: pre or post

13-13 Media Choices MediumClutterInfoContentAbility to Target AdLifespanProductionCostCPM Newspaper Magazine TV Radio Outdoor Direct Mail Banner Ads

13-14 What’s involved in planning the personal selling portion of a marketing plan? Clarify sales task: objectives, activities, and length of sales cycleClarify sales task: objectives, activities, and length of sales cycle Design sales force architecture, account management policies, and systemsDesign sales force architecture, account management policies, and systems

13-15 What’s a sales cycle? Why does it matter in an early stage company?

13-16 Three Strategic Questions in Sales Force Design Build a sales force or hire outside agents?Build a sales force or hire outside agents? How to organize:How to organize: –Geographically? –By product or product line? –By customer type? –By selling function? How to use technology to enhance sales and customer service performance?How to use technology to enhance sales and customer service performance?

13-17 Q1: Should we use our own sales force or use outside agents? When and why?

13-18 Q2: In designing the sales force architecture, should it be organized geographically, around products, around customers, or around selling functions? When and why?

13-19 Q3: What technology applications can enhance personal selling? What are their merits? What are the risks?

13-20 The People Side of Sales Management: Some Advice Incentives and rewards (financial and otherwise) matter greatly in personal sellingIncentives and rewards (financial and otherwise) matter greatly in personal selling Selecting and training the right people makes a world of difference. In many companies, the top- producing sales people are paid more than some top managers -- and they’re worth it!Selecting and training the right people makes a world of difference. In many companies, the top- producing sales people are paid more than some top managers -- and they’re worth it!

13-21 The People Side of Sales Management: Some Advice “What gets measured gets done.” Good sales management systems measure sales, costs and margins, and behavior“What gets measured gets done.” Good sales management systems measure sales, costs and margins, and behavior In start-ups, the top management team often is and should be the primary sales forceIn start-ups, the top management team often is and should be the primary sales force

13-22 What about sales promotion? Two key questions Specify objectives (SMART)Specify objectives (SMART) –Most consumer and trade promotion is directly measurable Consumer or trade promotion, or both?Consumer or trade promotion, or both?

13-23 What about public relations? What does it take to get free publicity? What is it most useful for?