Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-1 Chapter Promotion and Pricing Strategies Marketing Management

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-2 Integrated Marketing Communications ●Promotion—communication link between buyer and seller that performs the function of informing, persuading, and influencing a purchase decision. –Focusing on Primary Demand –Focusing on Selective Demand

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-3 ●Promotional Campaign to Stimulate Primary Demand

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-4 Components of the Promotional Mix

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-5 Five Major Promotional Objectives

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-6 The Promotional Mix ●Promotional Planning –Increasing complexity and sophistication of marketing communications requires careful planning to coordinate strategies –Product Placement –Guerrilla Marketing

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-7 Advertising ●Types of Advertising –Product Advertising—consists of messages designed to sell a particular good or service –Institutional Advertising—involves messages that promote concepts, ideas, philosophies, or goodwill for industries, companies, organizations, or government entities –Advocacy Advertising (Cause Advertising): promotes a specific viewpoint on a public issue as a way to influence public opinion and the legislative process

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-8 Boys & Girls Clubs of America Institutional Advertising: Shaquille O’Neal Promotes Goodwill for the Boys and Girls Clubs of America

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-9 Advertising ●Advertising and the Product Cycle –Informative Advertising— to build initial demand for a product –Persuasive Advertising— to improve the competitive status of a product, institution, or concept,  Comparative Advertising –Reminder-oriented advertising— to maintain awareness of the importance and usefulness of a product, concept, or institution

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Use of Persuasive Advertising by the U.S. Army

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved ●Comparative Advertising

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Advertising ●Advertising Media –Must choose how to allocate advertising budget –All media offer advantages and disadvantages –Must consider cost and which media is best suited for communication

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Advertising Media

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Advertising ●Advertising Media –Newspaper –Television –Radio –Magazines –Direct Mail –Outdoor Advertising –Online and Interactive Advertising –Sponsorship ●Advantages/disadvantages, examples

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Advertising ●Advertising Media –Other Media Options  Infomercials: 30-minute programs that resemble regular TV programs, but are devoted to selling goods or services  Other Media options include: –Ads in movie theaters –Ads on airline movie screens –Printed programs, Subway tickets –Turnpike toll receipts –Automated teller machines –Naming stadiums and arenas –Naming statistics on sports shows –Naming trivia questions on sports shows

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Sales Promotion ●Sales promotion — non-personal marketing activities other than advertising, personal selling and public relations that stimulate consumer purchasing and dealer effectiveness. –Potential advantages:  Short-term increased sales  Increased brand equity  Enhanced customer relationships

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Sales Promotion ●Consumer-Oriented Promotions –Premiums—items given free or at a reduced price with the purchase of another product. –Coupons offer small price discounts –Rebates offer cash back to consumers –Sample—a gift of a product distributed by mail, door-to-door, in a demonstration, or inside packages of another product –Games, Contests, and Sweepstakes –Promotional Products (Specialty advertising)

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Sales Promotion ●Trade-Oriented Promotions –Point-of-purchase (POP) advertising— displays or demonstrations that promote products when and where consumers buy them  Takes advantage of many shoppers’ tendencies to make purchase decisions in the store –Trade shows—promote goods or services to intermediaries

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Personal Selling ●Personal selling—interpersonal promotional process involving a seller’s face-to-face presentation to a prospective buyer. ●Sales Tasks –Order Processing—involves identifying customer needs, pointing them out to customers, and completing orders –Creative Selling— skillful proposals of solutions for the customer’s needs ●Missionary Selling— specialized salespeople promote goodwill among indirect customers, often by assisting customers in product use

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Personal Selling ●The Sales Process –Seven Steps in the Sales Process

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Discussion ●In small groups –pick a product –develop 3 promotional schemes for it  who are you targeting  why do you think it will be effective ●Pick a product that needs to be sold face-to- face –what approach would you use? –what would you do at each step of the sales process?