2 The Role of PromotionPromotion – is any form of communication a business organization uses to inform, persuade, or remind people about its products and improve its public image.Product Promotion – companies use this type of promotion to convince customers to buy products from them instead of their competitors.
3 Institutional Promotion Institutional Promotion – is used to create a favorable image for itself. The purpose of this type of promotion is not to sell a specific product but to “sell” the company to potential consumers.
4 Four Types of Promotion AdvertisingPublicitySales Promotion andPersonal Selling
5 AdvertisingAdvertising – is any paid form of non-personal presentation of ideas, goods, or services by an identified sponsor. Advertising is identified by three features.The time or space has been paid forIt uses a set format to carry the message rather than personalIt identifies the sponsor of the message.
6 Brainstorm and List all of the different forms of advertising. Activity #1Brainstorm and List all of the different forms of advertising.
7 Advantages of Advertising Large numbers of people see the message (REACH)The cost per customer is lower than other types of promotionsBusinesses can choose the most appropriate media to reach their target market.Repeat viewing (FREQUENCY)Pre-selling of products
8 Disadvantages of Advertising Cannot focus well on individual needsSome forms of advertising can be to expensive for some businesses.Adverting can be wasteful and inefficient because the people who see or hear the message are not part of the target market.Due to costs, ads must be brief.
9 PublicityPublicity – involves placing newsworthy information about a company, product, or person in the media. Events such as groundbreaking ceremonies can be published in the newspaper.Principle function of Publicity – to build a favorable image.
10 ImageImage – the way that a business or organization is defined in people’s minds.Positive Publicity = Positive ImageSponsoring events, concerts, art exhibits, awarding scholarships or prizes, donating land or money etc… (McDonalds with the Olympics)Negative Publicity = Negative ImageAccidents, unsafe products etc… (FIRESTONE)
11 Advantages of Publicity Can Create a positive imageFreeThe audience for news is hugeMedia is respected as a viable source of informationPeople are more likely to believe a news story over an advertisement because the media is not biased.
12 Disadvantages of Publicity Company looses control over what is saidCompany cannot choose the time when the message is delivered.Negative Publicity can have serious implications and seriously harm the image of the business.
13 Sales PromotionSales Promotion – involves all marketing activities other than personal selling, advertising, and publicity that are used to stimulate consumer purchasing and sales effectiveness. There are three characteristics of Sales Promotion:Short term activities (as opposed to ads)Incentives to make a purchaseCan be used by all channels of distribution.
14 Consumer Oriented Promotions Licensing – Manufacturers, movie makers, sports teams and celebrities may license for a fee their logo, trademark, characters, or personal endorsements to a business to be used in promoting the business’s products.
15 Visual Merchandising & Displays Visual Merchandising – coordination of all of the physical elements in place of business so that it projects the right image to its consumers.Displays – refers to the window, floor, counter and in-store display techniques.
16 Premiums and Incentives Premiums – are low-cost items given away free to customers as a condition of purchase.CouponsFactory Packs – free gifts found inside the package.Traffic Builders – low cost premiums such as pens, key chains, calendars, which are given away to customers visiting a store or trying a product.Coupon Plans – ongoing programs offering a variety of premiums in exchange for labels, coupons or other tokens from one or more purchases.
17 IncentivesContests – require the participant to demonstrate a skill. Contest winners are awarded a prize.Sweepstakes – are games of chance.Rebates – are discounts offered by manufacturers to customers who purchase an item during a given time period.
18 Product SamplesProduct Samples – is a free trial size of a product that is sent through the mail, distributed door-to-door, or through retail stores.
19 Advantages & Disadvantages of Sales Promotions Each promotional device is unique & has appeal to a potential customer.Gives to customer something of valueBuying increases in the short – termCustomers can have fun in the processDisadvantages:Difficult to end without the customer becoming disappointed that its over.Promotional efforts cannot make up for poor products.
20 Personal SellingPersonal Selling – making an oral sales presentation to one or more potential buyers.Two types of Personal Selling:Order Taking (telephone)Order Getting (salespeople)
21 Adv. & Disadvantages of Personal Selling Most flexible & individualized of the promotional activities.Disadvantages:Salespeople can only help one person at a timeTrain the salespeople.The costs are higher than other types of activities.
22 Promotional MixPromotional Mix – a combination of different types of promotion. Each type of promotion is designed to complement one another.