Chapter 9 PROMOTION Objectives n n n

Chapter 9 PROMOTION

Objectives n n n Developing & Managing an Advertising Program Deciding on Media & Measuring Effectiveness Sales Promotion Public Relation Principles of Personal Selling

Major Decisions in Advertising Objectives Setting Budget Decisions Message Decisions Media Decisions Campaign Evaluation

Advertising Objectives n n n Specific Communication Task Accomplished with a Specific Target Audience During a Specific Period of Time Informat Persuas ive Advertis Remin ing Compa Build der Build Primary rison Selective Adverti Demand Adverti sing Keeps Compare s One Brand to Consum ers Thinking

The Five Ms of Advertising Message Money Factors to consider: Mission Sales goals Advertising objectives Message generation Message evaluation and selection Stage in PLC Message execution Market share and consumer base Competition and clutter Advertising frequency Product substitutability Social-responsibility review Media Reach, frequency, impact Major media types Specific media vehicles Media timing Geographical media allocation Measurement Communication impact Sales impact

Advertising Budget Factors Market Share & Consumer Base Stage in the Product Life Cycle Product Substitutability Competition & Clutter Advertising Frequency

Profiles of Major Media Types Newspapers Advantages: Flexibility, timeliness; good local market coverage; broad acceptance, high believability Limitations: Short life; poor reproduction quality; small pass-along audience Television Advantages: Combines sight, sound, motion; high attention; high reach; appealing to senses Limitations: High absolute costs; high clutter; fleeting exposure; less audience selectivity Direct Mail Advantages: Audience selectivity; flexibility, no ad competition within same medium; allows personalization Limitations: Relative high cost; “junk mail” image

Profiles of Major Media Types Radio Advantages: Mass use; high geographic and demographic selectivity; low cost Limitations: Audio only; fleeting exposure; lower attention; nonstandardized rates; fragmented audiences Magazines Advantages: High geographic and demographic selectivity; credibility and prestige; high-quality reproduction; long life; good pass-along readership Limitations: Long ad purchase lead time; waste circulation; no guarantee of position Outdoor Advantages: Flexibility; high repeat exposure; low cost; low message competition Limitations: Little audience selectivity; creative limitations

Classification of Advertising Timing Patterns Rising (2) Falling (3) Alternating (4) (5) Concentrated Level (1) (6) (7) (8) (9) (10) (11) (12) Continuous Intermittent Month Number of messages per month

Advertising Strategy Message Execution Turning the “Big Idea” Into an Actual Ad to Capture the Target Market’s Attention and Interest. Testimonial Evidence Scientific Evidence Technical Expertise Slice of Life Typical Message Execution Styles Personality Symbol Musical Lifestyle Fantasy Mood or Image

Advertising Evaluation Advertising Program Evaluation Communication Effects Sales Effects Is the Ad Communicating Well? Is the Ad Increasing Sales?

Why the increase in Sales Promotion? n n n n n Growing retailer power Declining brand loyalty Increased promotional sensitivity Brand proliferation Fragmentation of consumer market Short-term focus Increased managerial accountability Competition Clutter

%t of total - 3 yr. MA Long-Term Promotional Allocation 60 50 40 30 20 10 0 Trade Promo Media Adv Cons. Promo 1986 88 90 92 94 1996 Year Cox Direct 19 th Annual Survey of Promotional Practices

Channels of Sales Promotions MANUFACTURER Push Trade Promotions RETAILER Push Retail Promotions CONSUMER Consumer Promotions Pull

Consumer Promotion Consumer-Promotion Objectives Entice Consumers to Try a New Product Lure Customers Away From Competitors’ Products Get Consumers to “Load Up’ on a Mature Product Hold & Reward Loyal Customers Consumer Relationship Building Consumer-Promotion Tools Samples Coupons Cash Refunds Advertising Specialties Patronage Rewards Contests Price Packs Premiums Sweepstakes Games Point-of-Purchase Displays

“Deal Proneness, ” Liechtenstein, Burton, & Netemeyer, Journal of Retailing, Summer 1997 n n n Examination of “deal proneness” among consumers in a supermarket setting Surveys & Grocery Receipts used Eight types of deals: n Cent-off, One-free, Gift, Display, Rebate, Contest, Sale, & Coupon

“Deal Proneness, ” Liechtenstein, Burton, & Netemeyer Cluster analysis yielded two interpretable results: X 49% are “deal prone, ” 51% not X 24% High “Deal prone, ” 50% intermediate, 26% deal insensitive n “Deal-proneness” a generalized construct (crosses type of promotion) n Younger & Less educated more likely to be deal prone

Trade Promotions Trade-Promotion Objectives Trade-Promotion Tools Persuade Retailers or Wholesalers to Carry a Brand Price-Offs Premiums Give a Brand Shelf Space Allowances Promote a Brand in Advertising Buy-Back Guarantees Patronage Displays Rewards Push a Brand to Consumers Free Goods Contests Discounts Push Money Specialty Advertising Items

Business-to-Business Promotion Business-Promotion Objectives Generate Business Leads Stimulate Purchases Reward Customers Motivate Salespeople Business-Promotion Tools Conventions Trade Shows Sales Contests

Major Public Relations Tools Public Service Activities Web Site News Speeches Corporate Identity Materials Audiovisual Materials Written Materials Special Events

When might you decide to use Personal Selling? n n Tight budget (straight commission) Concentrated Market n n n Few buyers High value product Product must be customized Personal contact important Must demonstrate product Product involves trade-in/up

S Designing the Sales Force al es fo S rc al e es S o fo al bj rc es ec e fo tiv st rc S es ra e al te st es gy ru fo ct rc ur e e si Sales force compensation ze

Sales Force Structures Territorial Market Product Complexity

Workload Approach to Sales Force Size n n n Classify customers by size Determine desirable call frequencies Determine total sales calls needed per year Determine average number of sales calls per sales representative per year Divide total by number per rep

Sales Force Compensation n n Fixed Variable Expense Allowances Benefits

Recr Managing the Sales Force uitin Tr gai & S sele ni u cting ng pe sale sa rv s M le isi repr ot s ng esen iv re E sa tativ ati pr va le es ng es lu s sa en ati re le ta ng pr s tiv sa es re es le en pr s ta es re tiv en

Time and Duty Analysis Preparation Administration Travel Selling Food & Breaks Waiting

Sales Representative Motivation Effort Performance Rewards Satisfaction

Evaluating Salespeople Call Reports Work Plan Sources of Information Annual Territory Marketing Plan

Improving Sales Force Trai Effectiveness ning in sale s N R tech eg el niqu ot ati es & iat o prof io ns essi n hi onali sk psm ill b s uil di ng sk

The Zone of Agreement Zone of agreement Seller’s surplus s Seller’s reservation price (seller wants s or more) Seller wants to move x to the right Buyer’s surplus x Final contract $ b Buyer’s reservation price (buyer wants b or less) Buyer wants to move x to the left

Performance Evaluation n Current-to-Past Customer Satisfaction Qualitative Evaluation

Steps in the Selling Process Step Telling the Product “Story” to the Buyer, and Showing the Product Benefits. Knowing How to Meet the Buyer to Get the Relationship Off to a Good Start. Identifying and Screening For Qualified Potential Customers. 1. Pros pecti ng and Qual ifyin g

S te p 5. H an dli ng S O te bj p ec 6. ti Cl o S os ns te in p g 7. F oll o w- Steps in the Selling Process Seeking Out, Clarifying, and Overcoming Customer Objections to Buying. Asking the Customer for the Order. Following Up After the Sale to Ensure Customer Satisfaction and Repeat Business.

Alternative Steps: Find ’em Grab ‘em Show ‘em Answer ‘em Sell ‘em Keep ‘em