1 Chapter 16: Promotional Planning for Competitive Advantage Prepared by Amit Shah, Frostburg State University Designed by Eric Brengle, B-books, Ltd. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Learning Outcomes 2 Discuss the role of promotion in the marketing mix Describe the communication process Explain the goal of promotion LO 1 LO 2 LO 3 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Learning Outcomes 3 Discuss the elements of the promotional mix Discuss the AIDA concept and its relationship to the promotional mix Discuss the concept of integrated marketing communications Describe the factors that affect the promotional mix LO 5 LO 6 LO 7 LO 4 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

The Role of Promotion in the Marketing Mix 4 Discuss the role of promotion in the marketing mix. LO 1 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

The Role of Promotion 5 Promotions – Communications by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

The Role of Promotion 6 Promotional Strategy - A plan for the optimal use of the elements of promotion: advertising, public relations, personal selling, and sales production. Competitive Advantage - One or more unique aspects of an organization that cause consumers to patronize that firm rather than competitors. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

The Role of Promotion in the Marketing Mix 7 Overall Marketing Objectives Marketing Mix Product Place Promotion Price Marketing Mix Product Place Promotion Price Target Market Promotional Mix Advertising Public Relations Sales Promotion Personal Selling Promotional Mix Advertising Public Relations Sales Promotion Personal Selling Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Competitive Advantage 8 Unique features Excellent service Low prices Rapid delivery High product quality Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome The Role of Promotion in the Marketing Mix 9 LO 1 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Marketing Communication 10 Describe the communication process. LO 2 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Communication 11 Online The process by which we exchange or share meanings through a common set of symbols. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Marketing Communication 12 Categories of Communication Categories of Communication Interpersonal Communication Interpersonal Communication Mass Communication Mass Communication Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Marketing Communication 13 As SendersAs Receivers  Develop messages  Adapt messages  Spot new communication opportunities  Inform  Persuade  Remind Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Noise Sender Encoding Message Feedback Channel Feedback Channel Message Channel Message Channel Decoding Message Decoding Message Receiver The Communication Process Copyright 2010 by Cengage Learning Inc. All Rights Reserved 14

The Impact of Blogging 15 Corporate Blogs- Sponsored by a company or one of its brands and maintained by one or more of the company’s employees. Noncorporate Blogs- Independent and not associated with the marketing efforts of any particular company or brand. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome The Communication Process 16 LO 2 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

The Goals of Promotion 17 Explain the goal of promotion. LO 3 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Goals of Promotion 18 Informing Reminding Persuading Target Audience Target Audience PLC Stages PLC Stages: Introduction Early Growth PLC Stages: Growth Maturity PLC Stages: Maturity Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Informing 19  Increase awareness  Explain how product works  Suggest new uses  Build company image Informative Promotion Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Persuading 20 Persuasive Promotion  Encourage brand switching  Change customers’ perceptions of product attributes  Influence immediate buying decision  Persuade customers to call Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Reminding 21 Reminder Promotion  Remind customers that product may be needed  Remind customers where to buy product  Maintain customer awareness Copyright 2010 by Cengage Learning Inc. All Rights Reserved

The Promotional Mix 22 Discuss the elements of the promotional mix. LO 4 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

The Promotional Mix 23 Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals. Advertising Public Relations Sales Promotion Personal Selling Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Advertising 24 Any form of impersonal (one-way) paid communication in which the sponsor or company is identified. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Advertising Media 25 Traditional Advertising Media Traditional Advertising Media New Advertising Media  Television  Radio  Newspapers  Magazines  Books  Direct mail  Billboards  Transit cards  Internet  Banner ads  Viral marketing  E- mail  Interactive video Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Public Relations 26 The marketing function that evaluates public attitudes, identifies areas within the organization that the public may be interested in, and executes a program of action to earn public understanding and acceptance. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

The Function of Public Relations Maintain a positive image Educate the public about the company’s objectives Introduce new products Support the sales effort Generate favorable publicity 27 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Personal Selling 28 A purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Personal Selling 29 Traditional Selling Traditional Selling Relationship Selling Relationship Selling Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Sales Promotion 30 Online Marketing activities– other than personal selling, advertising, and public relations– that stimulate consumer buying and dealer effectiveness. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Sales Promotion 31 End Consumers End Consumers Trade Customers Company Employees Company Employees Free samples Contests Premiums Trade Shows Vacation Giveaways Coupons Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Characteristics of the Elements in the Promotional Mix 32 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Elements of the Promotional Mix 33 LO 4 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Promotional Goals and the AIDA Concept 34 Discuss the AIDA concept and its relationship to the promotional mix. LO 5 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

The AIDA Concept 35 AIDA Concept (Attention, Interest, Desire, Action)- Model that outlines the process for achieving promotional goals in terms of stages of consumer Involvement with the message. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

The AIDA Concept 36 Action Desire Interest Attention Cognitive (thinking) Affective (feeling) Conative (doing) Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome The AIDA Concept 37 LO 5 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Integrated Marketing Communications 38 Discuss the concept of integrated marketing communications. LO 6 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Integrated Marketing Communications 39 The careful coordination of all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer. Copyright 2010 by Cengage Learning Inc. All Rights Reserved

IMC Popularity Growth Proliferation of thousands of media choices Fragmentation of the mass market Slash of advertising spending in favor of promotional techniques that generate immediate response 40 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Integrated Marketing Communications 41 LO 6 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Factors Affecting the Promotional Mix 42 Describe the factors that affect the promotional mix. LO 7 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Factors Affecting the Choice of Promotional Mix 43 Nature of the product Stage in PLC Target market factors Type of buying decision Promotion funds Push or pull strategy Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Stage in the Product Life Cycle 44 Pre- introduction Publicity, light advertising Heavy use of advertising & PR to build awareness; sales promotion for trial AD/PR decrease; limited sales promotion; personal selling for distribution Ads decrease; sales promotion; personal selling; reminder & persuasive Advertising, PR, brand loyalty; personal selling for distribution Introduction Growth Maturity Decline Sales ($) Time Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Target Market Characteristics 45 For…  Widely scattered market  Informed buyers  Brand-loyal repeat purchasers Advertising Sales Promotion Less Personal Selling Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Type of Buying Decision 46 Advertising Sales Promotion Routine Personal Selling Neither Routine nor Complex Neither Routine nor Complex Advertising Public Relations Print Advertising Complex Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Available Funds Trade-offs with funds available Number of people in target market Quality of communication needed Relative costs of promotional elements 47 Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Push and Pull Strategies 48 Manufacturer promotes to wholesaler Manufacturer promotes to wholesaler Wholesaler promotes to retailer Wholesaler promotes to retailer Retailer promotes to consumer Retailer promotes to consumer Consumer buys from retailer Consumer buys from retailer PUSH STRATEGY Orders to manufacturer Manufacturer promotes to consumer Manufacturer promotes to consumer Consumer demands product from retailer Consumer demands product from retailer Retailer demands product from wholesaler Retailer demands product from wholesaler Wholesaler demands product from manufacturer Wholesaler demands product from manufacturer Orders to manufacturer PULL STRATEGY Copyright 2010 by Cengage Learning Inc. All Rights Reserved

Review Learning Outcome Factors Affecting Promotional Mix 49 LO 7 Copyright 2010 by Cengage Learning Inc. All Rights Reserved