1. chapter Marketing Communications & PROMOTIONAL MIX 4.01

2. ©2003 South-Western Chapter Version 3e2 10 Year Old Statistics  U.S. advertising spending exceeds $215 billion per year  Industry employs only 272,000  Ad budgets of some firms exceed over $2 billion per year 1 1

3. ©2003 South-Western Chapter Version 3e3 Advertising and Market Share  New brands spend proportionately more for advertising than old ones.  A certain level of exposure is needed to affect purchase habits.  Beyond a certain level, diminishing returns set in. 1 1

4. ©2003 South-Western Chapter Version 3e4 Advertising and the Consumer  Average U.S. citizen is exposed to hundreds of ads each day.  Advertising may change a consumer’s attitude toward a product.  Advertising can affect consumer ranking of brand attributes. 1 1

5. ©2003 South-Western Chapter Version 3e5 Promotional Mix

6. ©2003 South-Western Chapter Version 3e6 What is promotion?  Any form of communication a business or organization uses to inform, persuade, or remind people about its products.

7. ©2003 South-Western Chapter Version 3e7 The Promotional Mix is a combination of the different types of promotion.

8. ©2003 South-Western Chapter Version 3e8 Elements of the Promotion Mix Advertising Ingredients of the Promotion Mix Ingredients of the Promotion Mix Public Relations Personal Selling Sales Promotion

9. ©2003 South-Western Chapter Version 3e9 What is promotion?  There are two forms of promotion –Product –Institutional  It is important to our economy  Billions of dollars are spent on promotion and promotion activities provide millions of people with jobs.

10. ©2003 South-Western Chapter Version 3e10 Major Types of Advertising Corporate Image Advocacy Advertising Types of Advertising Types of Advertising Pioneering Competitive Comparative Product Advertising Institutional Advertising

11. ©2003 South-Western Chapter Version 3e11 Major Types of Advertising Institutional Advertising Institutional Advertising Designed to enhance a company’s image rather than promote a particular product. Product Advertising Product Advertising Designed to tout the benefits of a specific good or service. 2 2

12. ©2003 South-Western Chapter Version 3e12 Major Types of Advertising 2 2 Enhance corporation’s identify Pioneering Competitive Comparative ProductAdvertisingProductAdvertising InstitutionalAdvertisingInstitutionalAdvertising Advocacy advertising

13. ©2003 South-Western Chapter Version 3e13 Product Advertising PioneeringPioneering Stimulates primary demand for new product or categoryCompetitiveCompetitive Influence demand for brand in the growth phase of the PLC. Often uses emotional appeal. ComparativeComparative Compares two or more competing brands’ product attributes. Used if growth is sluggish, or if competition is strong. 2 2

14. ©2003 South-Western Chapter Version 3e14 The Role of Promotion  Promotion- any form of communication a business or organization uses to inform, persuade, or remind people about its products and improve its public images.  Product promotion - used to convince potential customers to buy products from it instead of from a competitor. –Explains major features and benefits of its products –Tells where those products are sold –Advertises sales on those products –Answers customer questions –Introduces new products

15. ©2003 South-Western Chapter Version 3e15 The Role of Promotion  Institutional Promotion- used to create a favorable image for itself. Does not directly sell a certain product. However, may ultimately result in increased sales of a company’s products.

16. ©2003 South-Western Chapter Version 3e16 Types of Promotion  Advertising  Publicity  Sales Promotion  Personal Selling

17. ©2003 South-Western Chapter Version 3e17 Advertising  It is paid for.  One set format to carry a message, rather than a personal, one-on-one message.  Identifies the sponsor of the message.

18. ©2003 South-Western Chapter Version 3e18 Advertising….  Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertise here!

19. ©2003 South-Western Chapter Version 3e19 Publicity  Builds a business’ image.  Publicity is free.  Not much control over the message being sent to the public.

20. ©2003 South-Western Chapter Version 3e20  A specific kind of public relations that involves placing positive and newsworthy information about a business, its products, or its policies in the media is called….. Publicity

21. ©2003 South-Western Chapter Version 3e21 Publicity  Advantage… –It is free!  Disadvantage….. –Its contents cannot be controlled by the business

22. ©2003 South-Western Chapter Version 3e22 Principal function of publicity…  Building an image

23. ©2003 South-Western Chapter Version 3e23 Public Relations  Any activity designed to create a favorable image toward a business, its products or its policies.

24. ©2003 South-Western Chapter Version 3e24 Sales Promotion  Usually involves short term activities.  Offers some type of incentive to make a purchase.  Can be successfully used in all channels of distribution.

25. ©2003 South-Western Chapter Version 3e25  All marketing activities, other than personal selling, advertising, and public relations is called…. Sales Promotion

26. ©2003 South-Western Chapter Version 3e26 Sales Promotion (con’t)  Trade Promotions –Slotting Allowances –Buying Allowances –Trade Shows and Conventions –Sales Incentives  Consumer Sales Promotions –Licensing –Promotional Tie-Ins –Visual Merchandising and Displays –Premiums & Incentives –Product Samples Types of Promotions

27. ©2003 South-Western Chapter Version 3e27 Personal Selling  The responsibility of sales personnel. –Order - taking personnel –Order - getting personnel  The most flexible and individualized type of promotion available.

28. ©2003 South-Western Chapter Version 3e28 What is the largest form of promotion?  Personal Selling! –This type of promotion requires contact with potential buyers

29. ©2003 South-Western Chapter Version 3e29 What do they do?  Advertising –Creates awareness of a business’s product  Public Relations –Creates a favorable image for the business itself  Sales Promotion –Efforts stimulate sales  Personal Selling –Builds on all of the other efforts by helping customers complete the sale

30. Promotion 1 1 Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response and then reassures. Learning Objective Discuss the role of promotion in the marketing mix. 404

31. Promotional Strategy 4. Sales Promotion 404 Learning Objective 1 1 Discuss the role of promotion in the marketing mix. A plan for the optimal use of the elements of promotion: 1. Advertising 3. Personal Selling 2. Public Relations

32. The Role of Promotion Promotional Mix Advertising Public Relations Personal Selling Sales Promotion To convince target customers that the goods/services offer a DIFFERENTIAL ADVANTAGE over competitors Promotional Mix Advertising Public Relations Personal Selling Sales Promotion To convince target customers that the goods/services offer a DIFFERENTIAL ADVANTAGE over competitors Overall Marketing Objectives Marketing Mix Product Place Promotion Plan Price Marketing Mix Product Place Promotion Plan Price Target Market 404 Learning Objective 1 1 Discuss the role of promotion in the marketing mix.

33. Retain Customers Build Channel Relationships Identify Prospects Build Positive Images Create Awareness 404 Learning Objective 1 1 Discuss the role of promotion in the marketing mix. Making People Aware: IPOD Mercedes Benz Fair Giveaways Cooperative Advertising Frequent Flyer Programs Goals of Market Communications

34. Features That Provide Differential Advantage Features That Provide Differential Advantage Unique Features Excellent Service Low Prices Rapid Delivery High Product Quality 404 Learning Objective 1 1 Discuss the role of promotion in the marketing mix. Cadillac John Deere Overnight Parts Walmart Everyday Low Prices Hybrid Cars “We will pick you up”

35. Promotional Mix Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals. Personal Selling Advertising Public Relations Sales Promotion 2 2 Learning Objective Discuss the elements of the promotional mix. 405

36. 1. Personal Selling Traditional Selling Traditional Selling Relationship Selling Relationship Selling Planned presentation to one or more prospective buyers to make a sale. 405 Learning Objective 2 2 Discuss the elements of the promotional mix. CONSUMER PRD BUSINESS PRD CARS: QUICK SALE WIN - LOSE COMPUTERS: LONG REL WIN - WIN Two people communicate in order to influence each other Accomplishment of mutual objectives.

37. ©2003 South-Western Chapter Version 3e37 Describe Advantages of Personal Selling Provides a detailed explanation or demonstration of product  Message can be varied to fit the needs of each prospective customer  Can be directed to specific qualified prospects  Costs can be controlled by adjusting sales force size  Most effective in obtaining sales and gaining satisfied customers 8 8 Learning Objective PART 2 479

38. ©2003 South-Western Chapter Version 3e38 Advertising Versus Personal Selling Personal Selling is more important if... The product has a high value. It is a custom-made product. There are few customers. The product is technically complex. Customers are geographically concentrated. Advertising/Sales Promotion is more important if... The product has a low value. It is a standardized product. There are many customers. The product is simple to understand. Customers are geographically dispersed.

39. ©2003 South-Western Chapter Version 3e39 Advantages of Personal Selling Cost Control Message Control Targeted Detailed Information Closing Sales

40. 2. Advertising Impersonal, one-way mass communication... 405 Learning Objective 2 2 Discuss the elements of the promotional mix....about a product, service or organization that is paid for by a marketer.

41. Advertising Media Traditional Advertising Media Traditional Advertising Media Electronic Advertising Media  Television  Radio  Newspapers  Magazines  Books  Direct mail  Billboards  Transit cards  Internet  Computer modems  Fax machines 406 Learning Objective 2 2 Discuss the elements of the promotional mix.

42. Advertising  Cost per contact is low Total cost is high 406 Learning Objective 2 2 Discuss the elements of the promotional mix. Advantages Disadvantages  Ability to reach large number of people  Can be micro-targeted

43. ©2003 South-Western Chapter Version 3e43 Four Types of Promotion  1. Advertising - any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.  Six Advantages of Advertising –1. A large number of people usually see the advertiser’s message –2. Costs per potential customer are usually lower than other forms of promotion –3. Can choose the most appropriate media to reach target mkt –4. Can control the content of an advertisement –5. Ads are subject to repeat viewing –Ads can “presale” products

44. ©2003 South-Western Chapter Version 3e44 Four Types of Promotion  Four Disadvantages of Advertising –1. Cannot focus well on individual needs –2. Some forms of advertising can be too expensive for many businesses –3. Sometimes advertising is wasteful and inefficient - message may be spent on non-potential customers –4. Advertising must be brief

45. 3. Public Relations The marketing function that evaluates public attitudes, identifies areas within the organization that the public may be interested in, and executes a program of action to earn public understanding and acceptance. 406 Learning Objective 2 2 Discuss the elements of the promotional mix.

46. ©2003 South-Western Chapter Version 3e46 Four Types of Promotion  2. Publicity - placing newsworthy information about a company, product, or person in the media. Can be used to promote particular events and promote particular products. The main purpose of publicity is to build an image. Image - the way a business or organization is defined in people’s minds.

47. ©2003 South-Western Chapter Version 3e47 Four Types of Promotion  Advantages of Publicity –Publicity is free; advertising is not –Can be used to create a positive image within the community –Viewed as being more credible or believable than advertising –Viewed as news, people more attention to publicity  Disadvantages of Publicity –Give up much of your control of your message –Not all publicity is positive –Lack of control by the business - bad stories can get printed

48. Evaluates public attitudes Executes programs to “win” public Functions of Public Relations Functions of Public Relations Publicity: Public information (good or bad ) about a company, good, or service appearing in the mass media as a unpaid news item. 407 Learning Objective 2 2 Discuss the elements of the promotional mix. Ecology Recycling Curbside Programs Identifies areas of public interest Identifies areas of public interest

49. ©2003 South-Western Chapter Version 3e49 Publicity and Public Relations  Public Relations - any activity designed to create goodwill toward a business.  Benefits of PR –Increasing sales –Increasing firm’s good reputation –Increasing customers reception of advertising messages –Spreading accurate information to the public –Conditioning customers to expect quality products from the company –Reducing the impact of problems –Helping to obtain better treatment from government

50. ©2003 South-Western Chapter Version 3e50 Audiences for PR  Internal Audiences - groups within the organization  Employee Relations - goal is to keep your employees happy by using: –Tuition reimbursement –Newsletters –Health and wellness programs –Opportunities for communications

51. ©2003 South-Western Chapter Version 3e51 Audiences for PR  External Audiences - groups outside the organization  Customers - Satisfied customers = repeat business. Ways to keep customers happy include: –Provide special services and amenities such as gift- wrapping, check cashing, free delivery, free parking, etc. –Advisory boards - panels of consumers that make suggestions about products and businesses –Customer newsletters, annual reports –Customer events - seminars, lunches, entertainment

52. ©2003 South-Western Chapter Version 3e52 Audiences for PR  Community - company sponsors activities that benefit the civic, social, and cultural life of the community. Activities can include: –School partnerships - HP donating computers to the high school –Sponsorship of community events –Scholarships

53. ©2003 South-Western Chapter Version 3e53 Public Relations  News Release - a pre-written story about the company that is sent to various media for publication. It usually contains information about the company’s employees, stores, operations, products, corporate philosophy, or participation in an event or program. Can contain hard or soft news. –Hard News - information that should be announced right away because the public will want to know about it immediately –Soft News - information that does not need to be announced immediately because it will be of as much interest to the public later as it is now

54. ©2003 South-Western Chapter Version 3e54 Purposes of News Releases  To introduce new products  To keep the business in the public eye  To position the business’s image  To support good employee relations  To create good community relations

55. ©2003 South-Western Chapter Version 3e55 Getting Your News Release in the Media  Include a captioned photograph with the release  Meet media deadlines  Write an appropriate number of releases  Direct the release to a specific person  Advise the staff that you have sent out a release  Reread the release after setting it aside  Keep a copy of every release  Send a cover letter with the release  Send a thank-you note after the release is used  Avoid pressuring the editor  Avoid mentioning publicity or advertising  Avoid playing favorites

56. ©2003 South-Western Chapter Version 3e56 Public Relations  Press Kit - a folder containing articles, news releases, feature stories, and photographs about a company, product, or person. Press kits are given to the media to assist them in reporting on the intended news item.  Press Conference - a meeting in which media members are invited by the business or organization to hear an announcement about a newsworthy event.

57. ©2003 South-Western Chapter Version 3e57 The Tools of Public Relations Major Tools Used By PR Professionals Major Tools Used By PR Professionals New Product Publicity Product Placement Customer Satisfaction Phone Lines Consumer Education Event Sponsorship Issue Sponsorship Web Sites

58. 4. Sales Promotion End Consumers End Consumers Company Employees Company Employees Sales Promotion Targets Sales Promotion Targets Marketing activities--other than personal selling, advertising, and public relations--that stimulate consumer buying and dealer effectiveness. 407 Learning Objective 2 2 Discuss the elements of the promotional mix. Trade Customers

59. ©2003 South-Western Chapter Version 3e59 A. Free samples B. Contests C. Premiums D. Trade Shows E. Vacation Giveaways F. Coupons Popular Tools for Consumer Sales Promotion Popular Tools for Consumer Sales Promotion 407 Learning Objective 2 2 Discuss the elements of the promotional mix. SOAP IN MAIL CHIPS IN STORE BEANIE BABIES OUT OF STOREIN STORE “WHY YOU LIKE...” HORT: CENT

60. ©2003 South-Western Chapter Version 3e60 Four Types of Promotion  3. Sales Promotion - All marketing activities, other than personal selling, advertising, and publicity, that are used to stimulate consumer purchasing and sales effectiveness.  Objectives of Sales Promotion –Increase sales –Inform customers about new products –Create a positive store or corporate image  3 Characteristics –Short term activities –Offers some type of incentive –Can be successfully used in all channels of distribution

61. ©2003 South-Western Chapter Version 3e61 Four Types of Promotion  Sales promotion can be either consumer or trade oriented  Trade Promotions - sales promotion activities designed to gain manufacturers’, wholesalers’, and retailers’ support for a product. More money is spent on promoting to businesses than to consumers. –1. Slotting allowances - a cash premium paid by the manufacture to a retail chain for the costs involved in placing a new product on its shelves. –2. Buying allowances - special price discount given by manufacturers to wholesalers and retailers to encourage them to either buy a product or buy a larger quantity. –3. Trade Shows and Conventions - designed to reach wholesalers –4. Sales incentives - awards given managers and employees who successfully meet or exceed their company’s set sales quota.

62. ©2003 South-Western Chapter Version 3e62 Four Types of Promotion  Consumer Sales Promotions - designed to encourage customers to buy a product. –1. Licensing - Organizations, such as manufactures, movie makers, sports teams, and celebrities, may license for a fee their logo, trademark, trade characters, names and likenesses, or personal endorsements to a business to be used in promoting the business’s products. –2. Promotional tie-ins - involve sales promotional arrangements between one or more retailers or manufacturers. They combine their resources (advertising and sales promotional activities) to do a promotion that creates additional sales for each partner.

63. ©2003 South-Western Chapter Version 3e63 Four Types of Promotion –3. Visual Merchandising and Displays - –Visual Merchandising - the coordination of all physical elements in a place of business so that it projects the right image to its customers –Displays - visual and artistic aspects of presenting a product to a target group of customers.

64. ©2003 South-Western Chapter Version 3e64 Four Types of Promotion –4. Premium and Incentives - most popular and frequently used sales promotion type –Premiums - low cost items given away free to consumers as a condition of purchase. Coupons - certificates given to customers entitling cash discounts Factory Packs (in-packs)- free gifts placed in product packages Traffic Builders - low cost premiums like key chains, pens Coupon Plans - ongoing programs in exchange for labels, coupons, or other tokens from one or more purchases –Incentives - higher-priced products given in contests or sweepstakes –5. Product Samples - free trial size of a product that is sent through the mail, distributed door-to-door, or through retail stores and trade shows

65. ©2003 South-Western Chapter Version 3e65 Four Types of Promotion  Advantages of Sales Promotions –Unique and has special appeal to a potential customer –Helps build customer loyalty  Disadvantages of Sales Promotions –Difficult to end without the customers becoming dissatisfied –Store image and sales can suffer if the promotion is not properly planned and managed –Only designed to supplement other promotional efforts and cannot make up for poor products

66. ©2003 South-Western Chapter Version 3e66 The Concept of the Promotional Mix  Important to achieve promotional goals.  Decide on the promotional mix that will be most effective in persuading customer or other businesses to purchase and support the businesses products.

67. ©2003 South-Western Chapter Version 3e67 PROMOTIONAL MIX  Promotional Mix - a combination of different types of promotion. A business decides on a promotional mix that will be most effective in persuading customers or other businesses to purchase and support the business’s products.

68. ©2003 South-Western Chapter Version 3e68 Tools for Consumer Sales Promotion Coupons Premiums Frequent Buyer Programs Contests and Sweepstakes Samples Point-of-Purchase Displays Six Categories of Consumer Sales Promotions Six Categories of Consumer Sales Promotions

69. ©2003 South-Western Chapter Version 3e69 Promotional Mix  Factors affecting the selection of a promotional mix –Good, Service, or Idea Type of product Product nature Stage of life cycle –Product’s market Type of consumer Number of Consumers Geographical location

70. ©2003 South-Western Chapter Version 3e70 Promotional Mix –Distribution System –Product’s Company Historical perspective Available funds Size of sales force –Competition

71. Integrated Marketing Communications A method of carefully coordinating all promotional activities to produce a consistent, unified message that is customer focused. 3 3 Learning Objective Discuss concept of integrated marketing communications. 408 NEW MOVIE – NEW TOY AT McDonalds

72. IMC Popularity Growth  Proliferation of thousands of media choices  Fragmentation of the mass market  Slash of advertising spending in favor of promotional techniques 428 Learning Objective 3 3 Discuss concept of integrated marketing communications.

73. Communication 4 4 The process by which we exchange or share meanings through a common set of symbols. Learning Objective Describe the communication process. Interpersonal Communication Interpersonal Communication Mass Communication Mass Communication Categories of Communication Categories of Communication 409 ONE TO FEW ONE TO MANY PERSON TO PERSON IMPERSONAL

74. ©2003 South-Western Chapter Version 3e74 Originator of the message in the communication process. Encoding Conversion of a sender’s ideas & thoughts into a message, usually words or signs. Sender The Communication Process Message Transmission Receiver Decoding Passage of the message through a communication media Interpretation of language and symbols sent through the communication media Feedback Receiver response to the sender 410 Learning Objective 4 4 Describe the communication process.

75. The Communication Process Noise Sender Idea Sender Idea Encoding Message Message Channel Message Channel Decoding Message Decoding Message Receiver 411 Learning Objective 4 4 Describe The Communication Process.

76. ©2003 South-Western Chapter Version 3e76 The Communication Process ReceiverDecodingChannelEncodingSender Noise Channel

77. ©2003 South-Western Chapter Version 3e77 Characteristics of Advertising Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility A. Advertising Indirect and non-personal Low Little Delayed One-way Yes Fast Same message to all audiences 414 Learning Objective 4 4 Describe the communication process.

78. ©2003 South-Western Chapter Version 3e78 Characteristics of Public Relations Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility B. Public Relations Usually indirect, non-personal Moderate to low Little Delayed One-way No Usually fast Usually no direct control 414 Learning Objective 4 4 Describe the communication process.

79. ©2003 South-Western Chapter Version 3e79 Characteristics of Sales Promotion Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility C. Sales Promotion Usually Indirect and non-personal Moderate to low Little to moderate Varies Mostly one-way Yes Fast None: Same message 414 Learning Objective 4 4 Describe the communication process.

80. ©2003 South-Western Chapter Version 3e80 Characteristics of Personal Selling Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility D. Personal Selling Direct and face-to-face High Much Immediate Two-way Yes Slow Tailored to prospect 414 Learning Objective 4 4 Describe the communication process.

81. Goals and Tasks of Promotion INFORMATIVE OBJECTIVE Increase awareness Explain how product works Suggest new uses Build company image 415 Learning Objective 5 5 Explain the goal & tasks of promotion. BACK OF PACKAGE RICE KRISPIE BARS CELL PHONES WORLD’S LEADER IN...

82. Goals and Tasks of Promotion PERSUASION OBJECTIVE Encourage brand switching Change customers’ perception of product attributes Influence buying decision Persuade customers to call 415 Learning Objective 5 5 Explain the goal & tasks of promotion. SWITCH PHONE CO HUYNDI CARS “ON SALE UNTIL..” ???

83. Goals and Tasks of Promotion REMINDER OBJECTIVE Remind customers that product/service may be needed Remind customers where to buy product Maintain customer awareness 416 Learning Objective 5 5 Explain the goal & tasks of promotion. “NORTHERN OHIO BUICK DEALERS

84. Goals and Tasks of Promotion REASSURE OBJECTIVE Reduce Cognitive Dissonance Learning Objective 5 5 Explain the goal & tasks of promotion. CARS HOUSES BIG BOATS

85. The AIDA Concept Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. 6 6 Learning Objective Discuss the AIDA concept and its relationship to the promotional mix. 416

86. THE AIDA CONCEPT A ttention I nterest D esire A ction 416 THE AIDA CONCEPT Learning Objective 6 6 Discuss the AIDA concept and its relationship to the promotional mix.

87. ©2003 South-Western Chapter Version 3e87 AIDA and the Hierarchy of Effects AttentionInterestDesireAction Awareness Knowledge Liking Preference Conviction Purchase

88. ©2003 South-Western Chapter Version 3e88 AIDA and the Promotional Mix A wareness I nterest D esire A ction Advertising Very effective Very effective Somewhat effective Not effective Not effective Public Relations Public Relations Very effective Very effective Very effective Very effective Very effective Very effective Not effective Not effective Sales Promotion Somewhat effective Somewhat effective Very effective Very effective Very effective Personal Selling Somewhat effective Very effective Very effective Somewhat effective Somewhat effective 417 Learning Objective 6 6 Discuss the AIDA concept and its relationship to the promotional mix.

89. ©2003 South-Western Chapter Version 3e89 Factors that Affect the Promotion Mix Push–and–Pull Strategies Nature of the Product Stage in the Product Life Cycle Target Market Characteristics Type of Buying Decision Available Funds $ $ $

90. A. Nature of the Product  Product characteristics –Business product vs. consumer product  Costs and risks  Social risk Learning Objective 7 7 Describe the factors that affect the promotional mix. 418 CLOTHING, JEWELRY HIGH COST OF PERSONAL SELLING

91. ©2003 South-Western Chapter Version 3e91 Goals and Tasks of Promotion InformingReminding Persuading Target Audience

92. 4. Reassuring 1. Informing 3. Reminding 2. Persuading 5 5 Target Audience Target Audience Learning Objective Explain the goal & tasks of promotion. PLC Stages: Introduction Early Growth PLC Stages: Growth Maturity PLC Stages: Maturity PLC Stages: ALL 414

93. ©2003 South-Western Chapter Version 3e93 B. Product Life Cycle & Promotional Mix Light Advertising, pre- introduction Publicity Heavy use of advertising, PR for awareness; sales promotion for trial AD/PR decrease Limited Sales Promotion, Personal Selling for distribution Ads decrease. Sales Promotion, Personal Selling Reminder & Persuasive Advertising, PR, Brand loyalty Personal Selling for distribution Introduction Growth Maturity Decline Sales ($) Time 419 Learning Objective 7 7 Describe the factors that affect the promotional mix.

94. C. Target Market Characteristics FOR:  Widely scattered market  Informed buyers  Repeat buyers Advertising Sales Promotion Less Personal Selling 420 Learning Objective 7 7 Describe the factors that affect the promotional mix.

95. D. Type of Buying Decision Advertising Sales Promotion Type of Buying Decision affectsPromotional Mix Choice Type of Buying Decision affectsPromotional Mix Choice Complex Routine Personal Selling Not Routine or Complex Not Routine or Complex Advertising Public Relations 420 Learning Objective 7 7 Describe the factors that affect the promotional mix.

96. E. Available Funds  Trade-offs with funds available  Number of people in target market  Quality of communication needed  Relative costs of promotional elements 421 Learning Objective 7 7 Describe the factors that affect the promotional mix.

97. ©2003 South-Western Chapter Version 3e97 Slide 18-35 FIGURE 18-5 FIGURE 18-5 A comparison of push and pull promotional strategies

98. ©2003 South-Western Chapter Version 3e98 Push Policy PPromotion policy used only with the next partner in the distribution channel. Manufacturers PUSH a product to the retailers for sale….

99. ©2003 South-Western Chapter Version 3e99 Pull Policy  Promotion policy designed to create consumer interest When a product is consumer driven or PUSHED into a store….

100. F. Push and Pull Strategies Manufacturer promotes to wholesaler Manufacturer promotes to wholesaler Wholesaler promotes to retailer Wholesaler promotes to retailer Retailer promotes to consumer Retailer promotes to consumer Consumer buys from retailer Consumer buys from retailer PUSH STRATEGY Orders to manufacturer Manufacturer promotes to consumer Manufacturer promotes to consumer Consumer demands product from retailer Consumer demands product from retailer Retailer demands product from wholesaler Retailer demands product from wholesaler Wholesaler demands product from manufacturer Wholesaler demands product from manufacturer Orders to manufacturer PULL STRATEGY 421 Learning Objective 7 7 Describe the factors that affect the promotional mix.

101. 101 Ethical Aspects of Advertising and Promotion Advertising and Promotion. McGraw-Hill/Irwin© 2004 The McGraw- Hill Companies, Inc., Chapter 22.

102. 102 Advertising and Ethics  Proponents  Encourages a standard of living improvement  Produces jobs  Promotes competition  Critics  Creates needs and faults  More propaganda than information  Promotes materialism

103. 103 Ethics in Promotion  Ethics: Moral principles and values that govern the actions of and individual or group individual group..

104. 104 Ethics in Promotion  Not all issues can be regulated  A marketing or promotion action may be legal but not considered ethical  Marketers must make decisions regarding the appropriateness of their actions  Companies are scrutinized for their ethics

105. 105 Social and Ethical Criticisms of Promotion  Advertising as untruthful or deceptive  Advertising as offensive or in bad taste–  Advertising of personal products–Sexual appeals  Advertising and Children  Social and Cultural Consequences–Making people buy things they don’t need–Encouraging materialism– Stereotyping–Advertisings’ influence on the media

106. 106 Social and Ethical Criticisms of Promotion  Advertising as untruthful or deceptive–  General mistrust of ads –Deliberately untruthful or misleading vs. puffery  Problems often more at local level rather than national

107. 107 Social and Ethical Criticisms of Promotion  Advertising as offensive, in bad taste, or irritating  Advertising of personal products  Sexual appeals  Suggestive, demeaning, raunchy

108. 108 Many people found Benetton’s “Death Row” ad campaign offensive

109. 109 Children and Promotion  Children's TV Watching Behavior  Children between ages 2-11 watch on average 21.5 hours of TV per week and may see 22,000 commercials per year  Television is an important source of information for children about products

110. 110 Children and Promotion  Some studies have shown…  Children lack experience and knowledge to evaluate advertising critically  They can not differentiate between commercials and program (fantasy vs. reality)  Children are vulnerable to advertising

111. 111 Children and Promotion  ……while other studies argue that  Children must learn through the consumer socialization process; need to acquire skills to function in the marketplace  Acquired skills have helped teens evaluate ads and recognize persuasion techniques

112. 112 Children and Promotion  From: ADText

113. 113 Stereotyping Stereotyping  Portrayal of women  Gender stereotyping  Portrayal of women as sex objects  Role portrayal of women to reflect changing role in society  Blacks and Hispanics  Gays  Elderly

114. 114 Do You Agree With Leo Burnett?  “It must be said that without advertising we would have a far different nation, and one that would be much the poorer-not merely in material commodities, but in the life of the spirit.”  These excerpters are from a speech given by Leo Burnett on the American Association or Advertising Agencies’ 50th anniversary, April 20,1967