1. Part 6 Promotion Decisions
MARKETING
17e
Hult • Pride • Ferrell
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2. 16: Integrated Marketing Communications
17: Advertising and Public Relations
18: Personal Selling and Sales Promotion
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3. Objectives
To describe the nature of integrated marketing communications
To examine the process of communication
To understand the role and objectives of promotion
To explore the elements of the promotion mix
To examine the selection of promotion mix elements
To understand word-of-mouth communication and how it affects promotion
To understand product placement promotions
To examine criticisms and defenses of promotion
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4. Integrated Marketing Communications
Coordination of promotion and other marketing efforts for maximum informational and persuasive impact
Fosters long-term relationships and efficient use of promotional resources
Coordinating multiple marketing tools to produce this synergistic effect requires a marketer to employ a broad perspective
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5. Integrated Marketing Communications
Integrated marketing communication is increasingly accepted
Consistent message to customers
Coordinate/manage promotional efforts
Synchronization of promotional elements
Use more precisely targeted promotional tools
Use of database marketing
Protect consumer privacy
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6. Promotion and the Communication Process
Communications – A sharing of meaning through the transmission of information
Source – A person, group, or organization with a meaning it tries to share with a receiver or an audience
Receiver – The individual, group, or organization that decodes a coded message
Coding Process (Encoding) – Converting meaning into a series of signs or symbols
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7. The Communication Process
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8. Decoding the Message
Communication Channel – The medium of transmission that carries coded message from the source to the receiver
Decoding Process – Converting signs or symbols into concepts and ideas
Noise – Anything that reduces a communication’s clarity and accuracy
Feedback – The receiver’s response to a decoded message
Channel Capacity – The limit on the volume of information a communication channel can handle effectively
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9. Sources of News Information for Americans
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10. Discussion Point
Follow the hyperlink to access a list of cross-cultural marketing mistakes
What are the problems with these messages?
How did noise interfere with the reception of the message?
What could these companies have done differently to avoid costly and embarrassing communications mistakes?
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11. Promotion
Communication to build and maintain favorable relationships by informing and persuading one or more audiences to view an organization positively and to accept its products
Promotion’s goal is to stimulate product demand and build customer relationships
Most organizations expend a large amount of resources on promotion
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12. Role and Objectives of Promotion
Discussion Point
Role and Objectives of Promotion
What are the promotional objectives behind this Ethos Water advertisement?
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13. Information Flows Are Important in Integrated Marketing Communications
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14. Possible Objectives of Promotion
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15. Create Awareness
Awareness is crucial to initiating the product adoption process for new products
For existing products, promotional efforts create increased awareness of
Brands
Product features
Image-related issues
Operational characteristics
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16. Stimulate Demand Primary Demand
Demand for a product category rather than a specific brand
Pioneer Promotion
A way to stimulate primary demand
Promotion that informs consumers about a new product
Selective Demand
Demand for a specific brand
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17. Discussion Point Stimulate Demand
What method(s) does Red Mango utilize to stimulate demand in this advertisement?
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18. Encourage Product Trial
If customers stall in the evaluation stage, marketers can use methods to encourage product trial in order to move them to product adoption
Trial Techniques:
Free samples
Coupons
Test drives
Limited free-use offers
Contests
Games
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19. Identify Prospects
Certain types of promotional efforts aim to identify customers who are interested in the firm’s product and are likely potential buyers
Techniques Include:
Television advertisement encouraging the viewer to visit the company’s website to share information and receive something of value
Company should respond with phone calls, , or personal contact by salesperson
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20. Retain Loyal Customers
The primary goal of marketing is to maintain long-term customer relationships
Keeping current customers is less costly than acquiring new customers
Retention techniques include:
Frequent-user programs
Special offers for existing customers
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21. Customer Retention Listening to the customer
Loyalty programs to reward most-valued customers
e-Communications – e-newsletters, e-cards, or e-alerts
Interactive promotions – Sweepstakes and contests
Events – Seminars, workshops, etc.
Client appreciation programs – Invitations to special events, etc.
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22. Facilitate Reseller Support
Strong relationships with resellers are important to an organization’s ability to maintain a sustainable competitive advantage
Various promotional methods help achieve this goal
Resellers view promotion as form of support
Share promotional expense
Special offers/buying allowances
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23. Combat Competitive Promotional Efforts
Promotional activities may aim to offset or lessen the effect of a competitor’s promotional and marketing activities
This type of promotional activity does not necessarily increase sales or market share
A combative promotional objective is used most often by firms in highly competitive consumer markets
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24. Reduce Sales Fluctuations
A business cannot operate at peak efficiency when sales fluctuate widely
Holidays
Seasonal products
Promotional activities are often designed to stimulate sales during slumps
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25. The Four Possible Elements of a Promotional Mix
Promotion mix: A combination of promotional methods used to promote a specific product
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26. Advertising
A paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media
Advertising is changing as mass media consumption habits are changing
The Internet and digital media aim at smaller, more targeted audiences
Advertising is highly flexible and can reach large or small audiences depending on need
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27. Advantages and Disadvantages of Advertising
Cost-efficient when it reaches a vast number of people at a low cost per person
It lets the source repeat the message several times
Visibility gained from advertising can enhance a firm’s image
Disadvantages:
Absolute dollar outlay is high
Rarely provides rapid feedback
Difficult to measure its effect on sales
Less persuasive than personal selling
Generally limited time exposure
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28. Personal Selling
A paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation
Advantages
Is a more specific form of advertising
Has greater impact on consumers
Provides immediate feedback
Limitations
Is expensive
Is labor intensive and time consuming
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29. Types of Interpersonal Communication
Kinesic Communication
Body language; communicating through the movement of head, eyes, arms, hands, legs, or torso
Proxemic Communication
Communicating by varying the physical distance between two parties in face-to-face interactions
Tactile Communication
Communication through touching
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30. Public Relations
A broad set of communication efforts used to create/maintain favorable relationships between organization and stakeholders
Publicity is a non-personal communication in a news-story form about an organization, its products, or both
Is transmitted through a mass medium at no charge
Public relations should be viewed as an ongoing program during crises and good times
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31. Public Relations Tools
Publicity
Annual reports
Brochures
Event sponsorships
Sponsorship of socially responsible programs
Press releases/Conferences/Feature articles
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32. Sales Promotion
Activities or materials that act as a direct inducement, offering added value or incentive for the product to resellers, salespeople, or customers
Free samples
Games
Rebates
Sweepstakes
Contests
Premiums
Coupons
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33. Discussion Point Sales Promotion
What type of sales promotion is McDonald’s using in this advertisement?
What is the goal for this type of promotion?
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34. Top Coupon Categories
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35. Selecting Promotion Mix Elements
Promotional
Mix
Resources,
Objectives,
Policies
Characteristics
of the Target
Market
of the Product
Cost and
Availability of
Methods
Push and Pull
Channel Policies
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36. Promotional Resources, Objectives, and Policies
The size of an organization’s promotional budget affects the number and intensity of promotional methods used
A company’s objectives and policies influence the types of promotions used
Different objectives will require different promotional mixes
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37. Characteristics of the Target Market
Crucial Elements of the Target Market:
Size
Often drives what promotional elements are chosen
Small target markets often rely on personal selling
Geographic distribution
Dispersed customers often rely more heavily on advertising
Demographic characteristics
Age, income, education, etc. will affect consumers’ media consumption patterns and are important considerations when developing the promotion mix
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38. Characteristics of the Product
Business products concentrate on:
Personal selling
Sales promotion
Consumer products concentrate on:
Convenience goods = advertising
Durables and expensive products = personal selling
Both = public relations
Product price is an important factor
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39. Stage of the Product Life Cycle
The stage of a product’s life cycle affects decisions regarding the promotion mix
Introduction
Advertising plus personal selling and sales promotion to generate awareness
Growth/Maturity
Consumer goods = advertising
Business advertising = personal selling and sales promotion
Decline
Reduction of all promotional activities
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40. Distribution Intensity of the Product
Intensive Distribution
Advertising, sales promotion
Selective Distribution
Promotion mixes vary
Exclusive Distribution
Personal selling
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41. Costs and Availability of Promotional Methods
National Advertising / Sales Promotion
Have higher expense but low cost per individual
International Promotion
Can be difficult because of lack of promotional channels
Personal selling
Is dependent on recruiting and hiring qualified sales people
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42. Push and Pull Channel Policies
Push Policy
Promoting a product only to the next institution down the marketing channel
Pull Policy
Promoting a product directly to consumers to develop strong consumer demand that pulls products through the marketing channel
Organizations may use both push and pull policies at the same time
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43. Comparison of Push and Pull Promotional Strategies
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44. Growing Importance of Word-of-Mouth Communications
Word-of-Mouth (WOM) Communication
Personal, informal exchanges of communication that customers share with one another about products, brands, and companies
Most customers are likely to be influenced by friends and family members when making purchases
Effective WOM relies on marketers identifying opinion leaders
Electronic WOM is becoming increasingly important
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45. Growing Importance of Word-of-Mouth Communications
Buzz Marketing
An attempt to incite publicity and public excitement surrounding a product though a creative event
Viral Marketing
A strategy to get consumers to share a marketer’s message, often through or online video, in a way that spreads dramatically and quickly
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46. Discussion Point
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47. Product Placement
A form of advertising that strategically locates products or product promotions within entertainment media to reach the product’s target market
In-program product placements have become a successful method of reaching consumers, rather than relying on commercial breaks
Has become more important as more consumers bypass advertisements through digital video recorders, TiVo, and the Internet
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48. Criticisms and Defenses of Promotion
Is promotion deceptive?
Some are, but not all promotion should be condemned
Laws, government regulation, and industry self-regulation have helped decrease deceptive promotion
Does promotion increase prices?
If promotion is working to stimulate demand, producing and marketing larger quantities can actually help reduce prices
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49. Criticisms and Defenses of Promotion
Does promotion create needs?
Marketing does not create needs, but makes consumers aware of needs they already have
Does promotion encourage materialism?
Marketers assert that values are instilled at home and promotion does not change people into materialistic consumers
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50. Criticisms and Defenses of Promotion
Does promotion help customers without costing too much?
Promotions inform customers about a product’s uses, features, advantages, prices, or purchase locations
Should potentially harmful products be promoted?
Defenders argue that, as long as it is legal to sell a product, promoting it should also be allowed
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