1. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Chapter 14: Promotion — Introduction to Integrated Marketing Communications

2. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit 14-1 14-3 Basic Promotion Methods Target Market Target Market Price Promotion Place Product Sales Promotion Sales Promotion Personal Selling Personal Selling Publicity Advertising Mass Selling Mass Selling

3. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Promotion (Marketing Communications) Mix Promotion is communicating information between seller and potential buyer or others in the channel to influence attitudes and behavior. It consists of: Personal selling - direct spoken communication between sellers and potential customers. Advertising - any paid form of nonpersonal presentation of ideas, goods or services by an identified sponsor. Publicity - any unpaid form of nonpersonal presentation of ideas, goods or services. Sales promotion - promotion activities, other than advertising, publicity and personal selling, that stimulate interest, trial, or purchase by final customers or others in the channel (see next slide). Integrated communications - the intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message.

4. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit 14-2 Aimed at middlemen Price deals Promotion allowances Sales contests Calendars Gifts Trade Shows Meetings Catalogs Merchandising aids Aimed at final consumers or users Contests Coupons Aisle displays Samples Trade shows Point-of-purchase materials Banners and streamers Trading stamps Sponsored events Aimed at company’s own sales force Contests Bonuses Meetings Portfolios Displays Sales aids Training materials 14-4 Sales Promotion Activities

5. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit 14-3A 0 Price Quantity D2D2 D1D1 A. To be more inelastic Promotion efforts may be targeted to make demand for the firm’s products more inelastic and so more resistant to counter-moves by the competition. 14-5 Promotion and the Demand Curve

6. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit 14-3B 0 Price Quantity D D B. to the right 14-6 Promotion efforts may be targeted to increase the demand for the firm’s products. Promotion and the Demand Curve

7. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit 14-3C 0 Price Quantity D D C. Both to the right and more inelastic Promotion efforts may be targeted to both increase demand for the firm’s products and to make demand more inelastic 14-7 Promotion and the Demand Curve

8. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Promotion and the AIDA Model Exhibit 14-4 Promotion ObjectivesAdoption ProcessAIDA Model Informing Persuading Reminding Attention Interest Desire Action Awareness Interest Evaluation Trial Decision Confirmation } } { 14-9

9. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit 14-5 Feedback ReceiverDecoding Message channel EncodingSource Noise 14-10 The Traditional Communication Model

10. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit 14-6 Encoder Decoder Common frame of reference The same message may be interpreted differently by the encoder and the decoder 14-11 Message Interpretation

11. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit 14-7 Noise Source’s Message Search Select a topic Message channel Receiver (Customer) 14-12 Customer-Initiated Interactive Communication

12. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Push-Pull Strategies Exhibit 14-8 Wholesaler Promotion Push Wholesaler Promotion Push Retailer Promotion Push Final Consumer Pull Business Customer Pull Promotion to Business Customers Promotion to Final Customers Promotion to Channel Members Producer’s Promotion Blend Personal Selling, Sales Promotion, Advertising, Publicity 14-13

13. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Exhibit 14-9 Time 14-14 The Adoption Curve Percent Adoption Innovators (3-5%) Early Adopters (10-15%) Early Majority (34%) Late Majority (34%) Laggards/ Nonadopters (5-16%) 0 5 20 50 90

14. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Promotion Blends Vary Over the PLC May have to build primary demand - demand for the general product idea - during the introduction stage. During market growth, emphasis shifts to stimulating selective demand - demand for a company’s own brand. Promotion becomes more persuasive during the market maturity stage. Promotional efforts may be decreased during the decline stage.

15. For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Setting the Promotion Budget Task Method Uncommitted Resources “All You Can Afford” Uncommitted Resources “All You Can Afford” Per Unit Match Competitors Percentage of Sales 14-15