1. MKT5 - Slide 1 to 14 1 5. Promotion Strategy MKT5

2. MKT5 - Slide 1 to 142 What is promotion? ► An organization communicating with customers ► A business’ total communications program is referred to as its Promotional Mix ► Promotional mix comprise:  Advertising  Personal selling  Sales promotion  Public Relations

3. MKT5 - Slide 1 to 143 Advertising ► Paid form of non-personal communication of ideas/products in the prime media ► Prime media:  TV  Newspapers  Magazines  Billboard posters  Radio  Cinema  Others ► 2 Aspects: message & medium

4. MKT5 - Slide 1 to 144 Personal Selling ► Most effective as it allows approach to be tailored to needs of the individual customer ► Involves:  Constructive dialogue with customers to identify their needs  Promote products & company benefits on an individual basis  Answer questions, resolve problems  Get feedback  Make a sale

5. MKT5 - Slide 1 to 145 Personal Selling (contd) ► May have to use sales force ► Sales force use ► Sales force use push strategy ► ► Push strategy: encouraging intermediaries to buy the product ► ► (Pull Strategy: support retailers by providing after sales service – encouraging consumers to demand the product)   Push used in personal selling, advertising and sales promotion ► ► Advantages & disadvantages? See p 299

6. MKT5 - Slide 1 to 146 Sales Promotion ► Providing incentives for customers/ distribution channel to stimulate demand for product ► Specific, usually short-term ► When used effectively, will help move old stocks, counteract competitor activity, merchandise new products & encourage repeat buying

7. MKT5 - Slide 1 to 147 Sales Promotion (contd) ► Commonly referred to as “Below the Line” promotion. Directed at:  Ultimate consumer (pull strategy)  Distribution channel (push strategy – known as “selling into the trade”) ► Methods:  Price promotions  Coupons  Gifts with purchase  Competitions & prizes  Money refunds  Frequent user/loyalty incentives  Point-of-sales displays

8. MKT5 - Slide 1 to 148 Publicity ► Communication of a product, brand or business by placing info in the media without paying for it directly ► ► News release to announce new product launches, company success, etc ► ► Articles to trade publications/newspapers ► ► Sponsorship ► ► Charitable donations

9. MKT5 - Slide 1 to 149 PR (contd) ► Defined: “The planned and sustained effort to establish and maintain goodwill and mutual understanding between an organisation and its publics” ► Publics: employees, shareholders, trade unions, customers, media, government ► Role of PR: identify the relevant publics and to influence their opinions by:  Reinforcing favorable opinions  Transforming neutral opinions to positive  Changing/neutralising hostile opinions

10. MKT5 - Slide 1 to 1410 PR (contd) ► Techniques in PR:  Consumer communications (thru promotional videos, press releases etc)  Business communications (thru corporate identity design, websites, etc)  Internal/employee communications (thru e.g., newsletters)  External communications  Financial communications

11. MKT5 - Slide 1 to 1411 Advantages/disadvantages of each type: ► See p 294 of your study materials

12. MKT5 - Slide 1 to 1412 Adoption & Diffusion Strategies ► Adoption curve: p 336 ► Characteristics: p 336-337 ► This curve shows when different groups accept ideas:  Innovators (first 2.5%)  Early adopters (next 13.5%) : likely to be young, mobile and creative  Early majority (Next 34%) : unlikely to be opinion leaders  Late majority (Next 34%) : are wary of new concepts  Laggards & non-adapters (Last 16%) : least open to new ideas

13. MKT5 - Slide 1 to 1413 Matching Promotion to Marketing Strategy ► Different promotional approaches suitable for different stages in the PLC ► Introduction: especially if the product is ground-breaking, customers need info on its uses & benefits – promote the idea, not necessarily the company’s product ► Once rival products come into the market, promotion shifts from building primary demand to stimulating company’s brands ► Shift from personal selling to mass selling ► As competition increases, persuasion becomes key promotion objective, hence, mass advertising ► When product’s share of the market is declining – either have promotion costs to remain profitable, or can raise promotion budget to remain profitable

14. MKT5 - Slide 1 to 1414 Matching Promotion to Marketing Strategy (contd) ► Market conditions determine which elements in the promotional blend the company concentrates on ► In markets approaching perfect competition, price becomes important. Hence, advertising concentrates on value-for- money & sales promotion on discounts ► Mix also dictated by company’s financial resources – ads can be expensive