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

2. 1. Identify the new and traditional tools that make up the promotion mix. 2. Contrast the advantages and disadvantages of various advertising media, including the Internet and social media. 3. Illustrate the steps of the B2B and B2C selling processes. LEARNING GOALS Chapter Sixteen 16-2

3. 4. Describe the role of the public relations department, and show how publicity fits in that role. 5. Assess the effectiveness of various forms of sales promotion, including sampling. 6. Show how word of mouth, e-mail marketing, viral marketing, blogging, podcasting, and mobile marketing work. LEARNING GOALS Chapter Sixteen 16-3

4. Profile Groupon grew faster than any e-company in history, from $740 million in 2010 to $4 billion in 2011. Google offered $6 billion in December 2010, but Mason rejected the offer. GrouponNow offers a variety of discounts via smartphone. ANDREW MASON Groupon 16-4

5. NAME that COMPANY Chapter Sixteen This beverage company has 8.5 million Facebook fans. It posts two daily messages and then monitors how many times each message is reviewed, how many times it is shared, and what the fan response to the messages are. It also uses Facebook to test potential ads before airing them on traditional media like TV. Name that company! 16-5

6. Promotion and the Promotion Mix Promotion Mix -- The combination of promotional tools an organization uses. The traditional mix includes: PROMOTION in an ORGANIZATION LG1 16-6

7. 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) LG1 Promotion and the Promotion Mix 16-7

8. Amy Scherber of Amy’s Bread can’t afford to outsource her promotions, so she needs to get creative.Amy’s Bread She sends newspaper editors stories about her company and has an assortment of company shirts. She builds strong word-of-mouth by keeping in touch with her community members. FRESH-BAKED PROMOTION Spotlight on Small Business 16-8

9. 1. Identify a target market 2. Define objectives 3. Determine a promotional budget 4. Develop a unifying message 5. Implement the plan 6. Evaluate effectiveness STEPS in a PROMOTIONAL CAMPAIGN LG1 Promotion and the Promotion Mix 16-9

10. CLASSIC CAMPAIGNS Brilliant Marketing Ideas LG1 Promotion and the Promotion Mix Source: Entrepreneur, February 2010 and Entrepreneur, February 2011. 16-10

11. Advertising: Informing, Persuading and Reminding 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 LG2 16-11

12. 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 LG2 Advertising: Informing, Persuading and Reminding 16-12

13. Social media advertising is growing so fast, marketers can’t keep up. Starbucks has over 12 million followers on Twitter.Starbucks McDonald’s has over 7 million fans on Facebook.McDonald’s SOCIAL ADVERTISING LG2 Advertising: Informing, Persuading and Reminding 16-13

14. c MAJOR CATEGORIES of ADVERTISING CategoryWhat it is RetailFrom retail stores to consumers TradeFrom manufacturers to wholesalers and retailers B2BFrom manufacturers to other manufacturers InstitutionalCreates a desirable image for an organization ProductCreates a desirable image for a product or service LG2 Advertising: Informing, Persuading and Reminding 16-14

15. MAJOR CATEGORIES of ADVERTISING (Continued) CategoryWhat it is AdvocacySupports a particular view of an issue ComparativeCompares competing products Interactive Customer-oriented ads that allows customers to choose information to receive OnlineComputer ads featured on different sites MobileAds that reach consumers on cell phones LG2 Advertising: Informing, Persuading and Reminding 16-15

16. ADVERTISING EXPENDITURE by MEDIA in $ MILLIONS RankMedia Projected 2010 Spending 1Direct Mail$52.3 2Broadcast TV36.8 3Newspaper23.4 4Cable TV27 5Radio15.9 6Yellow Pages11.9 7Consumer Magazine9.1 8Internet25.3 Other39.7 Total241.4 LG2 Advertising: Informing, Persuading and Reminding 16-16

17. 1. Plan: What should your mailing accomplish? 2. Get the Right List: The better the list, the better your chance of success. DEAR MR. POSTMAN… Steps in Launching a Direct-Mail Campaign 3. Stand Out: Make your ad like no other. 4. Get Help: Contact a marketing firm with direct mail experience. 5. Follow Up: One mailing is not enough. LG1 Promotion and the Promotion Mix 16-17

18. “Everybody doesn’t like something, but nobody doesn’t like ___________.” “We bring good things to life.” “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!” “Because you’re worth it.” MATCH GAME Match the Company with the Slogan LG2 Advertising: Informing, Persuading and Reminding 16-18

19. IT’S a DOG’S LIFE Famous and Not-so-Famous Dogs in Advertising LG2 Advertising: Informing, Persuading and Reminding 16-19

20. Television Advertising TV advertising is still the dominant media. Digital Video Recorders (DVRs) challenge TV advertising because viewers can skip ads. POPULAR ADVERTISING MEDIA LG2 Product Placement -- Advertisers pay to put their products into TV shows and movies where the audience will see them. 16-20

21. LET’S GO to the MOVIES Memorable Product Placements of 2011 LG2 Source: Fortune, February 28, 2011. Television Advertising 16-21

22. Infomercials and Online Advertising 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. Interactive Promotion -- Allows marketers to open a dialogue between buyers and sellers and let them work together to create a beneficial exchange. INFOMERCIALS and ONLINE ADVERTISING LG2 16-22

23. 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, www.fortune.com, accessed July 2011.www.fortune.com LG2 Infomercials and Online Advertising 16-23

24. 1. Brand messaging is key. 2. Site must be easy to navigate. 3. Make sure calls to action are effective. 4. Users want fast, readable sites. 5. Users with disabilities should be able to navigate. ONLINE EXPERIENCE How to Avoid Losing Customers Over a Bad Web Site Source: Entrepreneur, October 2010. LG2 Infomercials and Online Advertising 16-24

25. National Trust for Historic Preservation believes that investing in social media helps the Trust reach certain goals, such as building awareness for preservation. Kassie Rempel of SimplySoles sends out hand written thank-you notes and increases social media accessibility. Both can help marketers relate to customers on a personal level.SimplySoles SOCIAL MEDIA COMPLEMENTS OTHER PROMOTION (Social Media in Business) 16-25

26. 1. Be wary of requests for money transfers -- even from friends’ accounts. 2. Be wary when you use applications. Don’t give unnecessary information. 3. Use URL expanders to see the full address of links on friends’ pages. SOCIAL SCAMMERS How to Protect Yourself From Schemers Source: Kiplinger’s Personal Finance, December 2010. Photo Courtesy of: Paul Klintworth 16-26

27. Using Social Media to Monitor Ad Effectiveness Dr. Pepper posts messages on Facebook and monitors the results from their over 8.5 million fans.Dr. Pepper Richard Branson and Tony Hsieh all tweet their customer base to maintain two-way communication.Richard BransonTony Hsieh MONITORING AD EFFECTIVENESS LG2 Photo Courtesy of: Brent Moore 16-27

28. 1. Create a strong persona. 2. Have customers play along through Twitter and Facebook.Twitter Facebook 3. Engage bloggers. 4. Personalize the experience. 5. Keep your videos short and sweet! SOCIALLY SUPERIOR Lessons From the Wisdom of the Old Spice Man Source: Entrepreneur, September 2010. Using Social Media to Monitor Ad Effectiveness LG2 Photo Courtesy of: Dirk Houbrechts 16-28

29. You have received personal info on your phone about fellow workers, including your boss. You know that the info could lead to firing of those workers and managers. You also know that other workers have received the same info. Should you pass it along to your immediate supervisor or not? What are the ethical issues involved? What would you do? What do you expect to be the consequences of your actions? ELECTRONIC ETHICS (Making Ethical Decisions) 16-29

30. Global Advertising 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 LG2 16-30

31. India's 700 million rural consumers are spending more than ever. International brands are sending salesmen to reach these customers by giving free Castrol oil changes for tractors, passing out bowls of Nestlé noodles, and selling Unilever soaps. These salesmen must be aware of social customs to be successful. PROMOTION in RURAL INDIA (Reaching Beyond Our Borders) 16-31

32. Personal Selling: Providing Personal Attention 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 Salespeople need to listen to customer needs, help reach a solution and do everything possible to make the transaction as simple as possible. LG3 16-32

33. 1. Prospect and qualify 2. Pre-approach 3. Approach 4. Make a presentation 5. Answer objections 6. Close the sale Trial Close -- A statement or question that moves the process toward the purchase. 7. Follow up STEPS in the SELLING PROCESS LG3 Steps in the Selling Process 16-33

34. Steps in the Selling Process 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. LG3 16-34

35. Know your competition Understand your customer’s business Differentiate your product or service Sell to the people most likely to buy Build relationships Put the right people in the right selling spots BUY THIS! Successful Selling Strategies LG3 Steps in the Selling Process 16-35

36. Not feeling the customer’s pain Making money is the only goal Seeing sales as just a job Getting upset during the presentation Failing to properly prepare or over-preparing Not being yourself Neglecting the relationship WHOOPS! Sales Slip-Ups Source: Fortune Magazine. LG3 Steps in the Selling Process 16-36

37. STEPS in the B2C SELLING PROCESS LG3 The Business- to-Consumer Sales Process 16-37

38. Progress Assessment What are the four traditional elements of the promotion mix? What are the three most important advertising media in order of dollars spent? What are the seven steps in the B2B selling process? PROGRESS ASSESSMENT 16-38

39. Public Relations: Building Relationships 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 you’re responsive to their needs USING PUBLIC RELATIONS in PROMOTION LG4 16-39

40. Publicity: The Talking Arm of PR 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. Advantages of Publicity:  Free  Reaches people who would not look at an advertisement  More believable than advertising PUBLICITY LG4 16-40

41. No control over whether the media will use a story or when they may release it. It can be good or bad. Once a story has been run, it isn’t likely to run again. DISADVANTAGES of PUBLICITY LG4 Publicity: The Talking Arm of PR 16-41

42. Sales Promotion -- The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities. SALES PROMOTIONS Sales Promotion: Giving Buyers Incentives Categories of Sales Promotions: 1. B2B Sales Promotions 2. Consumer Sales Promotions LG5 16-42

43. Coupons Demonstrations Sampling Sweepstakes In-store Displays Contests SOME KEY CONSUMER PROMOTIONS LG5 Sales Promotion: Giving Buyers Incentives 16-43

44. Coupons, Inc EverSave RetailMeNot CouponCabin CLIP THESE Most Visited U.S. Coupon Clearing Sites LG5 Sales Promotion: Giving Buyers Incentives 16-44

45. Progress Assessment What are the three steps in setting up a public relations program? What are the sales promotion techniques used to reach consumers? What sales promotion techniques are used to reach businesses? PROGRESS ASSESSMENT 16-45

46. Word of Mouth and Other Promotional Tools 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 LG6 16-46

47. Viral Marketing 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 LG6 16-47

48. Blogging, Podcasting and E-mail Promotions 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. Email promotions increase brand awareness among commercial suppliers. BLOGS, PODCASTS, and E-MAILS LG6 16-48

49. Mobile Media Marketers make use of cell phones to text customers about product offers and other company information. MOBILE MEDIA LG6 16-49

50. Promotional Strategies 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. Pick Economy -- Refers to consumers who pick out their products from online outlets. PUSH, PULL, AND PICK PROMOTIONAL STRATEGIES LG6 16-50

51. Progress Assessment What’s viral marketing? What are blogging and podcasting? Describe a push strategy, a pull strategy and the pick economy. PROGRESS ASSESSMENT 16-51