Lamb Hair Mc Daniel MKTG 2007 -2008 14

Learning Outcomes LO 1 Discuss the role of promotion in the marketing mix LO 2 Discuss the elements of the promotional mix LO 3 Describe the communication process LO 4 Explain the goal and tasks of promotion Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 2

Learning Outcomes LO 5 Discuss the AIDA concept and its relationship to the promotional mix LO 6 Describe the factors that affect the promotional mix LO 7 Discuss the concept of integrated marketing communications Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 3

LO 1 The Role of Promotion in the Marketing Mix Discuss the role of

The Role of Promotion Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. LO 1 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 5

The Role of Promotional Strategy A plan for the optimal use of the elements of promotion: u Advertising u Public Relations u Sales Promotion u Personal Selling LO 1 Chapter 14 Competitive Advantage Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 6

The Role of Promotion in the Marketing Mix Overall Marketing Objectives Marketing Mix • • LO 1 Chapter 14 Product Place Promotion Price Target Market Promotional Mix • • Advertising Public Relations Sales Promotion Personal Selling Promotion Plan Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 7

Competitive Advantage High product quality Rapid delivery Low prices Excellent service LO 1 Chapter 14 Unique features Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 8

LO 1 REVIEW LEARNING OUTCOME The Role of Promotion in the Marketing Mix Chapter

LO 2 The Promotional Mix Discuss the elements of the promotional mix Chapter 14

The Promotional Mix onal i omot Pr Mix Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals. u u Advertising Public Relations Sales Promotion Personal Selling LO 2 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 11

The Promotional Mix tising dver A Impersonal, one-way mass communication about a product or organization that is paid for by a marketer. LO 2 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 12

Advertising Media New Advertising Media Traditional Advertising Media u u u u Television Radio Newspapers Magazines Books Direct mail Billboards Transit cards u u u Internet Banner ads Viral marketing E- mail Interactive video LO 2 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 13

Advertising Advantages u Reach large number of people u Low cost per contact Disadvantages u Total cost is high u National reach is expensive for small companies u Can be microtargeted LO 2 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 14

Public Relations ublic P tions Rela 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. LO 2 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 15

LO 2 Reality-Based Product Advertising u Jaguar is giving an $80, 000 Jaguar XK to a select group of “beautiful people”—just to be seen in it eyond the ook u It is reality-based product placement—where real life blurs seamlessly into advertising u The success of the campaign is “how people touch the car” many and see 16 SOURCE: Gina Chon, “Jaguar Tries a Living Product Placement, ” Wall Street Journal, June 29, 2006, B 1. Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 16

The Function of Public Relations u Main tain a p ositive u Edu image cate th e publi compa c abou ny’s ob jectives t the u Intro duce n ew pro ducts u Sup port the sales e u Gen ffort erate fa vorable publicit y LO 2 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 17

Sales Promotion ales S otion Prom LO 2 Marketing activities— other than personal selling, advertising, and public relations—that stimulate consumer buying and dealer effectiveness. http: //www. nabiscoworld. com Online Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 18

Sales Promotion Free samples Contests Premiums Trade Shows Vacation Giveaways Coupons End Consumers Company Employees Trade Customers LO 2 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 19

Personal Selling l sona Per elling S Planned presentation to one or more prospective buyers for the purpose of making a sale. LO 2 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 20

Personal Selling Traditional Selling Relationship Selling LO 2 Chapter 14 Copyright © 2008 by

LO 2 REVIEW LEARNING OUTCOME Elements of the Promotional Mix Chapter 14 Copyright ©

LO 3 Marketing Communication Describe the communication process Chapter 14 Copyright © 2008 by

Communication The process by which we exchange or share meanings through a common set of symbols. LO 3 http: //www. mcdonalds. com Online Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 24

Marketing Communication Categories of Communication Interpersonal Communication Mass Communication LO 3 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 25

Marketing Communication As Senders As Receivers § Inform § Develop messages § Persuade § Adapt messages § Remind § Spot new communication opportunities LO 3 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 26

The Communication Process Noise Sender LO 3 Chapter 14 Encoding Message Channel Decoding Message Receiver Feedback Channel Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 27

Characteristics of the Elements in the Promotional Mix LO 3 Chapter 14 Copyright ©

Characteristics of the Elements in the Promotional Mix Advertising Communication Mode Communication Control Feedback Amount Indirect and impersonal Low Little Feedback Speed Delayed Message Flow Direction One-way Message Content Control Yes Sponsor Identification Yes Reaching Large Audience Fast Message Flexibility Same message to all audiences LO 3 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 29

Characteristics of the Elements in the Promotional Mix Public Relations Communication Mode Communication Control Feedback Amount Usually indirect, impersonal Moderate to low Little Feedback Speed Delayed Message Flow Direction One-way Message Content Control No Sponsor Identification No Reaching Large Audience Message Flexibility Usually fast Usually no direct control LO 3 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 30

Characteristics of the Elements in the Promotional Mix Sales Promotion Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Usually indirect and impersonal Moderate to low Little to moderate Varies Mostly one-way Message Content Control Yes Sponsor Identification Yes Reaching Large Audience Fast Message Flexibility Same message to varied target LO 3 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 31

Characteristics of the Elements in the Promotional Mix Personal Selling Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Direct and face-to-face High Much Immediate Two-way Message Content Control Yes Sponsor Identification Yes Reaching Large Audience Message Flexibility Slow Tailored to prospect LO 3 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 32

The Impact of Blogging Corporate Blogs Sponsored by a company or one of its brands and maintained by one or more of the company’s employees. Independent and not Noncorporate associated with the Blogs marketing efforts of any particular company or brand. LO 3 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 33

LO 3 REVIEW LEARNING OUTCOME The Communication Process Chapter 14 Copyright © 2008 by

LO 4 The Goals and Tasks of Promotion Explain the goals and tasks of

Goals and Tasks of Promotion Informing Reminding Target Audience LO 4 Chapter 14 Persuading http: //www. tide. com Online Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 36

Goals and Tasks of Promotion Informing Reminding PLC Stages: Stages Introduction Early Growth PLC Stages: Target Audience Maturity PLC Stages: Growth Maturity LO 4 Chapter 14 Persuading Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 37

Goals and Tasks of Promotion Informative Promotion § Increase awareness § Explain how product works § Suggest new uses § Build company image LO 4 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 38

Goals and Tasks of Promotion Persuasive Promotion § Encourage brand switching § Change customers’ perceptions of product attributes § Influence immediate buying decision § Persuade customers to call LO 4 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 39

Goals and Tasks of Promotion Reminder Promotion § Remind customers that product may be needed § Remind customers where to buy product § Maintain customer awareness LO 4 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 40

LO 5 Promotional Goals and the AIDA Concept Discuss the AIDA concept and its relationship to the promotional mix Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 41

LO 5 The AIDA Concept Attention Interest Desire Action Chapter 14 Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 42

LO 5 The AIDA Concept Action Desire Interest Attention Conative (doing) Affective (feeling) Cognitive (thinking) http: //www. nascar. com http: //www. kelloggs. com Online Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 43

Biz Flix LO 5 Chapter 14 About a Boy Copyright © 2008 by South-Western,

LO 5 REVIEW LEARNING OUTCOME The AIDA Concept Chapter 14 Copyright © 2008 by

LO 6 Factors Affecting the Promotional Mix Describe the factors that affect the promotional

LO 6 Factors Affecting the Choice of Promotional Mix Nature of the product Stage in PLC Target market factors Type of buying decision 47 Promotion funds Push or pull strategy Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 47

Sales ($) LO 6 Stage in the Product Life Cycle Maturity Introduction Growth Decline Time Light Advertising; preintroduction publicity Chapter 14 Heavy use of Advertising; PR for awareness; sales promotion for trial Advertising, PR, brand loyalty; personal selling for distribution Ads decrease; 48 sales promotion; personal selling; reminder & persuasive Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved AD/PR decrease; limited sales promotion; personal selling for distribution 48

LO 6 Target Market Characteristics Advertising For… Less Personal Selling Chapter 14 Widely scattered market u Informed buyers u Sales Promotion u Brand-loyal repeat 49 purchasers Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 49

LO 6 Type of Buying Decision Routine Advertising Sales Promotion Neither Routine nor Complex Advertising Public Relations 50 Complex Personal Selling Print Advertising Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 50

LO 6 Available Funds u u Trade-offs with funds available Number of people in target market Quality of communication needed Relative costs of promotional elements 51 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 51

LO 6 Push and Pull Strategies PUSH STRATEGY Manufacturer promotes to wholesaler Wholesaler promotes to retailer Retailer promotes to consumer Consumer buys from retailer Orders to manufacturer PULL STRATEGY Manufacturer promotes to consumer Consumer demands product from retailer Retailer demands product from wholesaler 52 Wholesaler demands product from manufacturer Orders to manufacturer Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 52

LO 6 REVIEW LEARNING OUTCOME Factors Affecting Promotional Mix Chapter 14 Copyright © 2008

LO 7 Integrated Marketing Communications Discuss the concept of integrated marketing communications Chapter 14

Integrated Marketing Communications The careful coordination of all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer. LO 7 Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved 55

IMC Popularity Growth u Proliferation of thousands of media choices u Fragmentation of the mass market u Slash of advertising spending in favor of promotional techniques that generate immediate response Chapter 14 Copyright © 2008 by South-Western, a division of Thomson Learning. All rights reserved LO 7 56