Using Effective Promotions Chapter 16 McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Promotion Mix -- The combination of promotional tools an organization uses. The traditional mix includes: PROMOTION in an ORGANIZATION 16-2

ADVERTISING 16-3

Advertising -- Paid, non- personal communication through various media by organizations and individuals who are in some way indentified in the message. Major goals of advertising:  Inform  Persuade  Remind ADVERTISING in the FIRM 16-4

Total advertising expenditures exceed $241 billion yearly. Consumers benefit because production costs of TV programs, radio programs, newspapers and magazines are paid for by advertisers. Marketers choose ad media that will reach the target market. IMPACT of ADVERTISING 16-5

Social media advertising is growing so fast, marketers can’t keep up. Starbucks has over 12 million followers on Twitter. McDonald’s has over 7 million fans on Facebook. SOCIAL ADVERTISING 16-6

“Everybody doesn’t like something, but nobody doesn’t like ___________.” “It takes a licking and keeps on ticking.” “With a name like _________, it has to be good.” “Good to the last drop.” “Betcha can’t eat just one!” MATCH GAME Match the Company with the Slogan 16-7

TV advertising is still the dominant media. Digital Video Recorders (DVRs) challenge TV advertising because viewers can skip ads. POPULAR ADVERTISING MEDIA Product Placement -- Advertisers pay to put their products into TV shows and movies where the audience will see them. 16-8

Infomercial -- A full length TV program devoted exclusively to promote a particular product. Online Ads are attempts to get potential customers to a web site to learn about a product. INFOMERCIALS and ONLINE ADVERTISING 16-9

Veg-O-Matic Ginsu Knives The Clapper Thigh Master George Foreman Grill Bowflex INFOMERCIAL HALL of FAME The Biggest Hits Over the Past 40 Years Source: Fortune, accessed July

Dr. Pepper posts messages on Facebook and monitors the results from their over 8.5 million fans. Richard Branson tweets his customer base to maintain two-way communication. MONITORING AD EFFECTIVENESS Photo Courtesy of: Brent Moore 16-11

ADVERTISING GLOBALLY 16-12

ADVERTISING EXPENDITURE by MEDIA in $ MILLIONS RankMedia Projected 2013 Spending 1Direct Mail$52.3 2Broadcast TV36.8 3Newspaper23.4 4Cable TV27 5Radio15.9 6Yellow Pages11.9 7Consumer Magazine9.1 8Internet25.3 Other39.7 Total

Globalism requires marketers to develop a single product and promotional strategy to implement worldwide. Problems can arise in global markets with using one advertising campaign in all countries - especially bad translations. GLOBAL ADVERTISING STRATEGY 16-14

Regionalism – specific ads for each country or for specific groups within a country. (most effective) REGIONAL ADVERTISING STRATEGY 16-15

PERSONAL SELLING 16-16

Personal Selling -- The face-to-face presentation and promotion of a product, including the salesperson’s search for new prospects and follow-up service. PERSONAL SELLING 16-17

1. Prospect and qualify STEPS in the B2B SELLING PROCESS 16-18

Prospecting -- Researching potential buyers and choosing those most likely to buy. PROSPECTING and QUALIFYING in SELLING Qualifying -- Making sure customers have a need for a product, the authority to buy and the willingness to listen to a sales message. Prospect -- A customer who meets the qualifying criteria

2. Approach 3. Make a presentation 4. Answer objections 5. Close the sale Trial Close -- A statement or question that moves the process toward the purchase. 6. Follow up STEPS in the B2B SELLING PROCESS 16-20

STEPS in the B2C SELLING PROCESS 16-21

USING PUBLIC RELATIONS in PROMOTION 16-22

Public Relations (PR) -- Evaluates public attitudes, changes policies and procedures in response to the public, and executes a program of action and information to earn public understanding and acceptance. 3 steps of a good PR program: 1) Listen to the public 2) Change policies and procedures 3) Inform people that organization is responsive to their needs USING PUBLIC RELATIONS in PROMOTION 16-23

Publicity -- Any information about an individual, product or organization that’s distributed to the public through the media and is not paid for or controlled by the seller. PUBLICITY 16-24

ADVANTAGES of PUBLICITY Free Reaches people who would not look at an advertisement More believable than advertising

No control over whether the media will use a story or when they may release it. Once a story has been run, it is not likely to run again. There is such a thing as bad publicity. DISADVANTAGES of PUBLICITY 16-26

SALES PROMOTIONS 16-27

Sales Promotion -- The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities. SALES PROMOTIONS 16-28

Coupons Demonstrations Sampling Sweepstakes In-store Displays Contests SOME KEY CONSUMER SALES PROMOTIONS 16-29

Word-of-Mouth Promotion -- People tell others about products they have purchased. Word-of-Mouth is important for products like:  Restaurants  Daycare and Eldercare  Car Repair Shops  Hair Stylists  Hotels USING WORD-of-MOUTH PROMOTION 16-30

Viral Marketing -- Paying customers to say positive things on the Internet or setting up multiple selling schemes whereby consumers get commissions. People who promote through viral marketing often receive SWAG which can include free tickets, shirts, and other merchandise. EMERGING PROMOTIONAL TOOLS 16-31

Blog -- Short for web log; an online diary that looks like a webpage, but is easier to create and update by posting text, photos, videos, or links. Podcasting -- A way to distribute audio and video programs via the Internet. BLOGS, PODCASTS, and S 16-32

Marketers make use of cell phones to text customers about product offers and other company information. MOBILE MEDIA 16-33

Push Strategy -- Producers use advertising, personal selling, sales promotion, and other tools to get their products stocked on shelves. Pull Strategy -- Directs heavy advertising and sales promotions efforts towards consumers and gets the public to request their products from retailers. PUSH and PULL PROMOTIONAL STRATEGIES 16-34

PUSH, PULL, PROMOTIONAL STRATEGIES   Convince wholesalers and retailers to stock and sell   Producer uses trade discounts, personal selling, cooperative advertising to convince the intermediaries   Idea is to push the product through the distribution system to the stores   Heavy advertisements and sales promotion efforts   Directed at consumers so that they will request the products from retailers   Products are pulled down through the distribution system

MANAGING THE PROMOTION MIX   Large, homogeneous groups of consumers are best reached through ADVERTISING   Large organizations are best reached through PERSONAL SELLING   SALES PROMOTION motivates to buy now   PUBLICITY adds support and creates a good impression   WORD OF MOUTH is often the most powerful promotional tool

Integrated Marketing Communication (IMC) -- Combines the promotional tools into one comprehensive strategy. IMC is used to:  Create a positive brand image.  Meet the needs of consumers.  Meet the strategic marketing and promotional goals of the firm. INTEGRATED MARKETING COMMUNICATION (IMC) 16-37