1. Promotion

2. Sales Promotion

3. Marketing activities that provide extra value or incentives to the sales force, distributors, or the ultimate consumer and can stimulate immediate sales. Broken into two categories –Consumer-oriented –Trade-oriented

4. Sales Promotion Consumer Oriented Directed to ultimate consumers (sometimes called consumer promotions) Sales tools used to support a company’s advertising and personal selling

5. Sales Promotion Consumer Oriented Coupons offer consumers a chance to buy a product or service at a discount Advantages –Only about 2% are redeemed –Can get online (www.couponsonline.com)www.couponsonline.com Disadvantages –Can reduce revenue from existing customers –Coupons can cost the company up to 3 times the face value –Coupon fraud

6. Sales Promotion Consumer Oriented Deals are short-term price reductions Advantages –Consumer may be more willing to try product Disadvantages –Consumers may wait to buy to get the deal –Consumers may perceive the product to be of less value

7. Sales Promotion Consumer Oriented Premiums are merchandise offered for free or a lot less than retail price –Clinique Bonus Week –Get a dog toy with 2 proofs of purchase for $8.99 Advantages –Consumers enjoy getting items for free or reduced prices –Get consumers to buy product repeatedly Disadvantages –Consumers may not like your product, they just want the premium

8. Sales Promotion Consumer Oriented Contests are when consumers can win a prize for participating in some activity. Usually involves a lot of thought, creative thinking. –Brawny Man, enter contest with essay and win a Dodge Advantages –Get consumers involved with the product Disadvantages –May require a lot of effort on the consumers part

9. Sales Promotion Consumer Oriented Sweepstakes require consumers to submit an entry, but require no analytical or creative effort by the consumer Advantages –Get consumers involved with the product Disadvantages –Consumers may not buy after the sweepstakes is over Pepsi’s “Music Giveaway”

10. Sales Promotion Consumer Oriented Samples are products offered for free or greatly reduced prices Advantages –Little risk for consumers –Creates awareness Disadvantages –Expensive for company

11. Sales Promotion Consumer Oriented Loyalty programs are used to encourage and reward repeat purchases by acknowledging every purchase made –Frequent flier miles –Kroger Plus card points Advantages –Loyalty from customers Disadvantages –Expensive for company

12. Sales Promotion Consumer Oriented Point-of-purchase displays are located in store aisle ways, can be signs or cut-outs holding product and/or product literature Advantages –Get consumers attention –Good location Disadvantages –Hard to get that good location

13. Sales Promotion Consumer Oriented Rebates offer money back for purchasing a product or service Advantages –People like the idea of getting money back –Gets people to buy product –On low-priced items, many people never redeem because of effort involved Disadvantages –Expensive –Rebate fraud

14. Sales Promotion Consumer Oriented Product placement is getting a brand name product into a movie, tv show, video, or commercial for another product Advantages –Gets consumers attention in a non-threatening way Disadvantages –Expensive (usually) –Loss of control over product

15. Sales Promotion Trade-Oriented Sales tools supporting advertising directed to wholesalers, retailers, or distributors –Allowances and discounts –Cooperative advertising –Training of sales force

16. Sales Promotion Trade-Oriented Allowances and Discounts –Reimbursing a retailer for extra support of a product (merchandise allowancing). Newspaper ads –Case allowances are discounts on cases ordered during a certain time period

17. Sales Promotion Trade-Oriented Allowances and Discounts –Finance allowance pays retailers for costs or losses during consumer sales promotions Get retailer to warehouse a lot of product during the promotion, if doesn’t sell then buys it back or give a discount on next order Give freight allowances on orders shipped from manufacturers warehouse –Disadvantages Some retailers might only buy when allowances or discounts are offered

18. Sales Promotion Trade-Oriented Cooperative Advertising –Manufacturer pays some of retailer’s cost of advertising their product Training Sales force –Get salespeople more knowledgeable about manufacturers product

19. Public Relations

20. The management function which evaluates public attitudes, identifies the policies and procedures of an individual or organization with the public interest, and executes a program of action to earn public understanding with acceptance Uses publicity along with lots of other tools: special publications, community activities, fundraising, event sponsorship, etc.

21. Public Relations Programs are not a one time event that happens all at once, last months sometimes years Is much more than just an activity to sell a product –Creates goodwill –Announce organizational changes –State companies position on an issue

22. Public Relations PR activities are sometimes designed to help fulfill marketing objectives –Raises awareness about a product or service –Informs and educates about a product or service, or company –Helps to gain understanding and trust from consumers

23. Public Relations Supporting Marketing Objectives Build marketplace excitement before media advertising begins –New product announcements Providing a value-added service –Butterball established a hot line around the holidays on how to prepare your turkey

24. Building “brand-to-consumer” bonds –Pillsbury Bake-off Provide product information or company information to opinion leaders Defending a product at risk and give a reason to buy –Working with environmental groups (McDonald’s) Public Relations Supporting Marketing Objectives

25. Examples –Campbell’s Soup For the 40 th anniversary of Swanson frozen dinners, released press releases only and had a 44% increase in sales –WD-40 Asked consumers how they use WD-40 and had over 1,200 people respond and coverage on television news and newspapers Public Relations Supporting Marketing Objectives

26. Who is Targeted by Public Relations? Employees of the firm –Maintain and showcasing results of employees efforts –Organizational newsletters –Bulletin boards –Paycheck envelope stuffers –Social events (corporate sports teams, picnics, Christmas parties)

27. Who is Targeted by Public Relations? Stockholders and Investors –Annual Report shows financials and can inform readers of why company is doing well or not, what their future plans are, etc. Promotes goodwill. One year McDonald’s Annual Report told of their recycling efforts and one year they had a 12-page insert on nutrition

28. Who is Targeted by Public Relations? Community Members –People that live and/or work in the area where a company is located –Have releases showing how the company is involved in community activities Reducing air pollution Protecting wildlife

29. Who is Targeted by Public Relations? Suppliers and Customers –Want to maintain goodwill with suppliers and the public –If customers and suppliers do not think the company is socially conscious they may buy/sell somewhere else

30. Who is Targeted by Public Relations? Suppliers and Customers –Ex: San Diego Gas and Electric Had extremely high rates Management mistakes caused even higher rates Announced a plan to build a nuclear plant near the ocean Company cars were vandalized Campaign: TV spots showed how to save energy and in turn, save money. Print ads tried to show management in positive light, and created community involvement programs

31. Who is Targeted by Public Relations? Media (External) –Most critical –They determine what people see in newspapers and the news, and how the news is presented –Issue press releases, allow interviews, and have special events for media

32. Public Relations Tools Press Release (or news release) –Provides factual information to the press –Usually won’t be used unless it’s of interest to readers/viewers of medium it’s sent to Exclusives –Offering a medium exclusive rights to a particular story (that medium usually reaches many target audience members) –May increase acceptance of story

33. Public Relations Tools Press Conference (or news conference) –Political figures, organizations, and corporations use very effectively –Has to be of major interest to a specific group –Used to report: Major accomplishments (Super Bowl or Olympics location) Major breakthroughs (medical cures) Emergencies or catastrophes Local community events or developments Introduction of new product or advertising campaign Pepsi used to announce termination of Michael Jackson contract

34. Public Relations Tools Interviews –People usually pay attention to personal interviews –Jack in the Box 4 people died from eating contaminated hamburgers President of company gave personal interviews to tell of corrective actions taken by the company Using highly visible individuals –Coordinated with advertising, etc.

35. Public Relations Tools Community Involvement –Membership in local organizations Chamber of Commerce, Kiwanis, Jaycees –Photo kits, trade shows –Sponsorship of children’s sports teams –In 1993 and 1997 there were huge floods in the Midwest Maytag issued press releases telling how to deal with waterlogged appliances State Farm established flood relief centers

36. Advantages of Public Relations Credibility –Not viewed as advertising because most people do not realize that the organization paid for communication either directly or indirectly –Media aren’t being compensated so some view information as more truthful Article on benefits of aspirin in newspaper may appear more credible than an ad for brand of aspirin –Can use news about a product as focus of ad “Best…”, “Product of the Year according to…”

38. Cost –Very low compared to advertising Not “cluttered” –Perceived as news items, not cluttered with ads Reach specific groups –Small companies can’t afford a lot of advertising and promotional activities so by using public relations they can get their message to these groups Advantages of Public Relations

39. Image building –Develops a positive image for organization –In 1982, 7 people died after taking Extra Strength Tylenol contaminated with cyanide –Within 1 week, Tylenol market share fell from 35% to 6% –Strong public relations efforts and a strong product and corporate image helped the brand recover Advantages of Public Relations

40. Biggest disadvantage is the message may not reach targeted audience Disadvantages of Public Relations

41. Publicity

42. The nonpersonal communications regarding an organization, product, service, or idea not directly paid for or run under identified sponsorship. Usually in the form of a news story, editorial, or announcement about an organization and/or its products and services.

43. How is Publicity Different from Public Relations? Publicity is usually short-term, public relations efforts extend over a period of time Public relations provides positive information about the organization and is usually controlled by the organization or its agent. Publicity is sometimes positive, but can be negative and is not necessarily in the control of the organization.

44. Power of Publicity If the publicity is generated inside the organization, the public relations department usually controls it Highly credible because not perceived as advertising or company sponsored –Consumer Reports had an ad campaign telling how they accept no advertising so they can be objective – Consumer Reports is a form of publicity

45. Power of Publicity Has news value and creates exposure –Lay’s potato chips ad had Larry Bird and Kareem Abdul-Jabbar, this ad was greatly publicized by the media

46. Examples of Publicity O.J. Simpson trial –Bruno Magli shoes sales increased by 30% after it was reported that the murderer wore this brand of shoes –Back Saver chair sales increased 42% after Judge Ito and the attorneys in the case requested this chair during the trial Consumer Reports –Gave the Isuzu Trooper a negative write-up and sales decreased by 83% Cabbage Patch Kids and Tickle Me Elmo

47. Controlling Publicity When negative information is released, the organization has to understand how powerful it can be and react to it

48. Controlling Publicity Tree Top –News media reported that a chemical used by apple growers caused cancer in kids, scientific and medical reports said otherwise –Some schools took apples and apple products out of their cafeterias –In response to this negative publicity, Tree Top ran ads, sent direct mailings to nutritionists and day cares

50. Advantages/Disadvantages of Publicity Advantages –Credibility –News value –Word of mouth communication –Perception of media endorsements Disadvantages –Timing Too early, too late, not at all –Accuracy