1 CHAPTER TWELVE MARKETING COMMUNICATION AND PERSONAL SELLING Prepared by Jack Gifford Miami University (Ohio) © 2001 South-Western College Publishing

2 THE ROLE OF PROMOTION IN THE MARKETING MIX n Promotion is communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence their opinions or elicit a response

© 2001 South-Western College Publishing3 PROMOTIONAL STRATEGY n Optimal use of the elements of promotion n Consistent with the overall goals of the marketing mix n A coordinated plan n An integral part of the marketing strategy for reaching the target market

© 2001 South-Western College Publishing4 PROMOTION: COMMUNICATION WITH A PURPOSE n Promotion is communication used by marketers to inform, remind, and/or persuade potential buyers through…. n Advertising n Personal selling n Publicity n Public Relations

© 2001 South-Western College Publishing5 THE PROMOTIONAL MIX n PERSONAL SELLING u Person-to- person dialogue between buyer and seller u Purpose & Advantages u Disadvantages u Inform, persuade remind u Flexible u Bi-directional u Interpersonal u Feedback u Relationship building u Expensive u Time consuming

© 2001 South-Western College Publishing6 THE PROMOTIONAL MIX n ADVERTISING u Non-personal u Paid u Identified sponsor u Indirect u Uniform message (some ability to now customize in interactive electronic media) u Communicate to large numbers of people u Low cost per contact u Multiple media options

© 2001 South-Western College Publishing7 THE PROMOTIONAL MIX n SALES PROMOTIONS u Time specific u Provide incentives for purchase behavior u Not routine events u Aimed at customers, salespeople, or channel members u Coupons u Free goods with purchase u Prizes or contests u Trips u Fashion shows u Channel member displays or training

© 2001 South-Western College Publishing8 THE PROMOTIONAL MIX n PUBLICITY / PUBLIC RELATIONS u Unpaid message u Less control over content u Always involves a third party u Higher level of credibility u More factual than persuasive u Can be positive or negative u Frequently orchestrated by the marketer u Systematically planned and distributed to media

© 2001 South-Western College Publishing9 MARKETING COMMUNICATIONS n Communication IS THE PROCESS by which we exchange or share meanings through a common set of symbols. u Interpersonal communication: Direct face-to-face communications between two or more people u Mass communications: Communicating to a large audience, usually through a mass medium

© 2001 South-Western College Publishing10 THE COMMUNICATION PROCESS Source EncodingMessage Channel DecodingReceiver Feedback Noise

© 2001 South-Western College Publishing11 n ENCODING THE MESSAGE u Words u Sounds u Colors u Space u Themes u Symbols u Pictures u Numbers u Gestures u Movement THE COMMUNICATION PROCESS

© 2001 South-Western College Publishing12 THE COMMUNCATION PROCESS n ENCODING THE MESSAGE u Words u Sounds u Colors u Space u Themes u Symbols u Pictures u Numbers u Gestures u Movement Channel or Medium DECODING

© 2001 South-Western College Publishing13 THE COMMUNICATION PROCESS n To determine the successful matching of encoding to decoding, marketers must receive feedback from the receiver in terms of action of a measurable change in mental state or attitude.

© 2001 South-Western College Publishing14 THE COMMUNICATION PROCESS OBJECTIVE ENCODING = DECODNG

© 2001 South-Western College Publishing15 INTEGRATED MARKETING COMMUNICATIONS (IMC) n Ideally, marketing communications from each promotional mix element (personal selling, advertising, sales promotions, public relations) should be integrated. n The message reaching the target consumer(s) should be the same regardless of whether it is from an advertisement, a salesperson in the field, a magazine article, or a coupon in a newspaper insert.

© 2001 South-Western College Publishing16 INTEGRATED MARKETING COMMUNICATIONS (IMC) n Marketing managers must carefully work out the roles the various promotional elements will play in the marketing mix. n Timing of promotional activities are coordinated and the results of each campaign are carefully monitored to improve future use of the promotional mix tools. Perfect Promotional Mix

© 2001 South-Western College Publishing17 THE GOALS AND TASKS OF PROMOTION: INFORM n Inform F A better mousetrap is of limited value unless consumers know that it exists, where it can be purchased, the price, and product details. F Essential for the existence of a free enterprise system F Results in an improved standard of living

© 2001 South-Western College Publishing18 THE GOALS AND TASKS OF PROMOTION: INFORM n Inform (CONTINUED) F Increase brand awareness F Explaining how a product works F Suggesting new uses for a product F Building a company image

© 2001 South-Western College Publishing19 THE GOALS AND TASKS OF PROMOTION: PERSUADE n Promotion persuades u Persuasion that encourages purchases or changes attitudes is a primary goal of promotion u Influence customers to buy now u Persuading customers to call

© 2001 South-Western College Publishing20 THE GOALS AND TASKS OF PROMOTION: REMIND n Promotion Reminds u Maintain store or brand loyalty u Combat competitor’s persuasive messages u Increase product awareness and usage u Reminding customers where to buy the product “You’re in good hands with……” “We’re ready when you are.”

© 2001 South-Western College Publishing21 PROMOTIONAL GOALS AND THE AIDA CONCEPT n Attention Interest Desire Action Steps n The AIDA concept assumes that promotion propels consumers along these steps in the decision process. ATTENTION DESIRE ACTION INTEREST

© 2001 South-Western College Publishing22 FACTORS AFFECTING THE PROMOTIONAL MIX n Nature of the product n Stage in the Product Life Cycle n Target market Characteristics n Type of buying decision n Available funds n Push vs Pull strategies n Business or consumer product? n Costs and risks associated with purchase? n Convenience, shopping or specialty good?

© 2001 South-Western College Publishing23 FACTORS AFFECTING THE PROMOTIONAL MIX n Nature of the product n Stage in the Product Life Cycle n Target market Characteristics n Type of buying decision n Available funds n Push vs Pull strategies n Introduction = informational n Growth & maturity = persuasive and brand n Maturity = reminder and persuasive n Decline = limited promotion of any kind

© 2001 South-Western College Publishing24 FACTORS AFFECTING THE PROMOTIONAL MIX n Nature of the product n Stage in the Product Life Cycle n Target market Characteristics n Type of buying decision n Available funds n Push vs Pull strategies n Level of product knowledge n Degree of brand loyalty n Geographical dispersion n Commonality of behavioral characteristics

© 2001 South-Western College Publishing25 FACTORS AFFECTING THE PROMOTIONAL MIX n Nature of the product n Stage in the Product Life Cycle n Target market Characteristics n Type of buying decision n Available funds n Push vs Pull strategies n Routine or complex buying decision n Automatic re- buy or new purchase task n Level of personal or professional involvement

© 2001 South-Western College Publishing26 FACTORS AFFECTING THE PROMOTIONAL MIX n Nature of the product n Stage in the Product Life Cycle n Target market Characteristics n Type of buying decision n Available funds n Push vs Pull strategies n Promotional budget may dictate possible parameters n Optimize return on promotional dollars n Minimize costs per contact dollar generated

© 2001 South-Western College Publishing27 FACTORS AFFECTING THE PROMOTIONAL MIX n Nature of the product n Stage in the Product Life Cycle n Target market Characteristics n Type of buying decision n Available funds n Push vs Pull strategies

© 2001 South-Western College Publishing28 PUSH AND PULL STRATEGIES n Promotion may be aimed at the final consumer or a channel member PULL Promote to final consumer; encourage them to ask their local retailers to carry the good PUSH Promote to channel members to gain distribution; promise promotional support and strong final consumer demand

© 2001 South-Western College Publishing29 PERSONAL SELLING n Is direct communication between a sales representative and one or more prospective buyers in an attempt to influence each other in a purchase situation n Generally becomes more important u As the number of customers decreases u As the complexity of the product increases u As the value of the product grows n Relationship selling (consultative selling) involves multi-stage selling and personalization over the long-term

© 2001 South-Western College Publishing30 STEPS IN THE SELLING PROCESS n Also referred to as the sales process or sales cycle n Is simply a set of steps a salesperson goes through to sell a particular product or service n Some of these steps are very quick, while others take months. This is also true of the entire sales cycle. n These steps are...

© 2001 South-Western College Publishing31 THE SALES CYCLE ¬Generating leads ­Qualifying leads ®Approaching the customer and probing needs ¯Developing and proposing solutions °Handling objections ±Closing the sale ²Following up

© 2001 South-Western College Publishing32 SALES MANAGEMENT ¬Defining sales goals and the sales process ­Determining the sales force structure ®Recruiting and training the sales force ¯Motivating and compensating the sales force °Evaluation of the sales force