Promotion

Promotion is the communication process of marketing…

Review of Communication Theory

Remember: Information changes what we know. Suppose one transmits 1000 bits (0s and 1s). If these bits are known in advance (absolute probability), then no information has been transmitted. If, however, each is equally and independently likely to be 0 or 1, 1000 bits (in the information theoretic sense) have been transmitted. Between these two extremes, information can be quantified as follows. If X is the set of all messages {x 1,...,x n } that X could be, and p(x) is the probability of x given some condition, then the entropy of X is defined:

Basically What this means is: Entropy is a measure of information transmitted. The lowest probability message carries the most information.

Communication: Meaning is transferred from one person to another Source Encoding Message: the physical form of a communication Medium: communication vehicle TV Radio Internet Magazines Newspapers Mail Billboards Flyers Person-to-person Decoding Receiver Noise

Promotion What are the objectives of promotion?

Promotion Objectives: 1.Create Awareness 2.Stimulate Demand 3.Encourage Product Choice 4.Identify Prospects (Customers)

Promotion Objectives: 5. Counter Competition 6. Reduce Sale Fluctuations 7. Persuade 8. Change Attitudes 9. Educate 10. Facilitate Channels

Push and Pull Push: Push product (or awareness) from production to customer

Push and Pull Pull: Pull product (or awareness) up to customer (customer driven)

Promotional Mix

Selecting the Promotional Mix Elements 1.Internal factors Resources Objectives of the firm or campaign Policies

Selecting the Promotional Mix Elements 2. Market Characteristics Size Location Demographics

Selecting the Promotional Mix Elements 3. Product Characteristics Life cycle Good/Service/Ideas Competition & Intensity of Coverage Product Usage

Selecting the Promotional Mix Elements 4. Cost and Availability of Methods Social Media CPM Effective Hits

Advertising: Paid massed non-personal communication

Personal Selling: Person-to-person communication

Sales Promotion: Short-term incentives and programs to encourage interest and the purchase of a product or service

Publicity (PR): Promotion through commercially significant vehicles of mass media, not paid for directly by sponsor

Direct Marketing: Direct communications with targeted customers by phone, , mail, etc.

Direct Marketing: Direct communications with targeted customers by phone, , mail, etc.

eMarketing

Promotional Mix How do we put all the parts of promotion together to obtain our goals?

Promotional Mix 1.Mass Appeals Advertising Public Relations Sales Promotions

Promotional Mix 2. Personal Appeals Sales Promotions Personal Selling Direct Marketing

Promotional Mix 3. Personal Appeals WOM Getting people to talk about product Viral Marketing: fun or entertaining messages that spread form one person to another Guerrilla Marketing: “ambushing”

Integrated Marketing Communications IMC Use of the promotion mix to create and maintain long-term relationships with customers by satisfying customer needs and/or wants.

Integrated Marketing Communications IMC Goals: 1.One unified voice 2.Begins with customer 3.Develop a relationship with customers 4.Create two-way communication 5.Include all stakeholders, not just customers 6.Generate a continuous stream of communication 7.Measure results from ACTUAL feedback

Integrated Marketing Communications IMC How: 1.Identify the target audiences 2.Establish objectives What are we trying to do: Hierarchy of Effects Awareness Inform Create desire Purchase Build loyalty

Integrated Marketing Communications IMC How: 1.Identify the target audiences 2.Establish objectives 3.Budget

Budget Types: 1.Affordability (28% goods, 28% industry) 2.Arbitrary Allocation (16% consumer goods, 24% industry) 3.Ratio to Sales (52% consumer goods, 32 industry) 4.Competitive Comparison 5.Marginal Analysis 6.Objective Task

Integrated Marketing Communications IMC How: 1.Identify the target audiences 2.Establish objectives 3.Budget 4.Create the campaign 5.Feedback and Evaluations

Advertising: Paid mass non-person communication

“Use facts, not fantasy. Don’t sermonize; advertise.” “If an ad doesn’t sell, if it doesn’t ultimately ring the cash register, it is a waste of money.” Jeffrey Fox

Product advertisements: are advertisements that focus on selling a good or service and which take three forms: (1) pioneering (or informational), (2) competitive (or persuasive), (3) reminder

Dial Soap What is the type and purpose of this advertisement? 15-41

Institutional advertisements: are advertisements designed to build goodwill or an image for an organization rather than promote a specific good or service

Institutional Advertisements Advocacy Pioneering Institutional Competitive Institutional Reminder Institutional 15-43

Chevron and Bridgestone What is the type and purpose of each advertisement?

Got Milk? and U.S. Army What is the type and purpose of each advertisement?

World Wide Fund, Candie’s, and Geico What is the appeal and purpose of each advertisement?

Advertising Advantages: 1.Cost/contact CPM = (cost/unit)/reach X 1000 Example: Jay Leno$35,000/ 30 sec reaches 3.6 million Super Bowl$3.8 mill/ 30 sec reaches 108 million CPM for Leno= $ 9.72 CPM for SB= $ 35.19

Advantages: 1.Cost/contact 2.Repetition Two-Factor Theory + - Valence

Advantages: 1.Cost/contact 2.Repetition 3.Versatility

Advantages: 1.Cost/contact 2.Repetition 3.Versatility 4.Atmosphere

Advantages: 1.Cost/contact 2.Repetition 3.Versatility 4.Atmosphere 5.Prestige

Prestige factor is very odd:

Advertising Disadvantages: 1.CostSuper Bowl is still $7.6 mill/ minute!!

Disadvantages: 1.Cost 2.Flexibility

Disadvantages: 1.Cost 2.Flexibility 3.Clutter

Disadvantages: 1.Cost 2.Flexibility 3.Clutter Also a problem with repetition

Disadvantages: 1.Cost 2.Flexibility 3.Clutter 4.Credibility “Alternative Explanation”

Disadvantages: 1.Cost 2.Flexibility 3.Clutter 4.Credibility “Alternative Explanation” 5.High Waste

Disadvantages: 1.Cost 2.Flexibility 3.Clutter 4.Credibility “Alternative Explanation” 5.High Waste 6.Lack of Action

Disadvantages: 1.Cost 2.Flexibility 3.Clutter 4.Credibility “Alternative Explanation” 5.High Waste 6.Lack of Action 7.Problem measuring effectiveness

DEVELOPING THE ADVERTISING PROGRAM 1. Identifying the Target Audience 2. Specifying the Advertising Objectives 3. Setting the Advertising Budget 15-63

DEVELOPING THE ADVERTISING PROGRAM 4. Designing the ads Humorous appeals Increases credibility Increases memory Increases likability 15-64

DEVELOPING THE ADVERTISING PROGRAM 4. Designing the ads Fear appeals Protection racket

DEVELOPING THE ADVERTISING PROGRAM 4. Designing the ads Sex appeals Careful! sex-appeal-advertising-works html ts/a/Sex-In-Advertising.htm

DEVELOPING THE ADVERTISING PROGRAM 5. Selecting the right media 15-67

Television, direct mail, and newspapers account for more than 65% of all advertising expenditures (in $millions) 15-68

Advertisers must consider the advantages and disadvantages of the many media alternatives 15-69

Alternative structures of advertising agencies used to carry out the advertising program 15-70

Public Relations and Publicity Promotion through commercially significant vehicles of mass media, NOT paid for directly by sponsor.

Public Relations and Publicity Promotion through commercially significant vehicles of mass media, NOT paid for directly by sponsor.

Public Relations and Publicity Promotion through commercially significant vehicles of mass media, NOT paid for directly by sponsor. 1.Should be proactive 2.Should have a “hook” 3.Should have a consistent theme 4.Should be integrated into total promotion effort 5.Should be done constantly

Public Relations and Publicity 5. Should be done constantly Gentle Rain vs. Flood

Advantages: 1.Credibility 2.Impact 3.Cost

Disadvantages: 1.Lack of control 2.Placement I have been in the Enquirer twice. I don’t think it added to my non-existent career….

Other functions of PR and Publicity 1.Advice and council 2.Publications 3.Relations with publics 4.Public opinion 5.Publicity

Other functions of PR and Publicity 6. Miscellaneous Speaker bureaus Corporate donations Scholarships Awards, etc. Honorary Degree for Bee Gees

Warning!!

Public Relations can be done with great impact and at little cost, but ….

Public Relations can be done with great impact and at little cost, but …. Who does the publicity office think they work for?

Public Relations can be done with great impact and at little cost, but …. Who does the publicity office think they work for? As a manager, make sure that the office believes it works for the organization, NOT for you. Publicity can become habit forming. Some people can become addicted to it.

Sales Promotion Short-term incentives and programs to encourage interest and the purchase of a product or service.

Sales Promotion Compared to advertising: 1.Both are paid 2.Both attempt to change attitudes and behavior 3.Ads: Long-term objectives SP: Short-term objectives 4.Ads: Can stand alone SP: Is a part of a larger promotional mix

Sales Promotion TypeTarget Trade showsTrade IncentivesTrade Push MoneyTrade POPTrade, Consumers PremiumsTrade, Consumers Promotional productsTrade, Consumers Contests (sweepstakes)Trade, Consumers RebatesTrade, Consumers CouponsConsumers, Trade

Sales Promotion TypeTarget SamplesConsumers

Sales Promotion TypeTarget SamplesConsumers Specials/bonusConsumers Patronage rewardConsumers Product/brand placement Consumers