Transcript Elements of the Promotion Mix Ingredients of the Promotion

Elements of the Promotion Mix
Advertising
Ingredients
of the
Promotion
Mix
Public Relations
Personal Selling
Sales Promotion
The Communication Process
Noise
Sender
Encoding
Channel
Channel
Decoding
Receiver
Goals and Tasks of Promotion
Informing
Reminding
Target
Audience
Persuading
AIDA and the Hierarchy of Effects
Purchase
Conviction
Preference
Liking
Knowledge
Awareness
Attention
Interest
Desire
Action
When Elements of Promotion Are Most Useful
Effectiveness
Advertising
Personal
selling
Sales
promotion
Public
relations
Awareness Knowledge Liking Preference
Very effective
Somewhat effective
Either not effective or inefficient
Conviction Purchase
Factors that Affect the Promotion Mix
Nature of the Product
Stage in the Product
Life Cycle
Target Market Characteristics
Type of Buying Decision
Available Funds
Push–and–Pull Strategies
$$$
Creating a Promotion Plan
Analyze the Marketplace
Identify Target Market
Set Promotion Objectives
Develop Promotion Budget
Choose Promotion Mix
Criteria for Setting Promotion Objectives
Promotion objectives should:
be measurable, concrete
be based on sound research, with a
well-defined target audience
be realistic
reinforce the overall marketing plan and
relate to specific marketing objectives
Examples of Promotion Objectives
Objective: To Inform (Awareness)
To increase the top-of-mind awareness level for Peter Pan
peanut butter from 16 percent to 24 percent
Objective: To Persuade (Attitudinal)
To increase the percentage of parents who feel that Peter Pan
peanut butter is the best peanut butter for their children from
22 percent to 35 percent
Objective: To Remind
To remind consumers that Peter Pan peanut butter is the
creamiest peanut butter and is available at their nearest grocery
and convenience stores
Techniques for Setting Promotion Budgets
• Arbitrary Allocation
• All - You - Can - Afford
• Competitive Parity
• Percent of Sales
• Market Share
• Objective and Task
Regulation of Promotion
Self-Regulation
• National Advertising Division (NAD)
• National Advertising Review Board (NARB)
Federal Regulation
• Federal Trade Commission (FTC)
Return on Advertising Expenditures
Effects of Advertising
Diminishing
returns
on additional
spending
Increasing efficiency
as ad budget becomes
sufficient
Advertising Spending
Major Types of Advertising
Corporate Image
Institutional
Advertising
Advocacy Advertising
Types
of
Advertising
Pioneering
Product
Advertising
Competitive
Comparative
Advertising Campaign Decision Process
Determine the campaign objectives.
Make creative decisions.
Make media decisions.
Evaluate the campaign.
Common Advertising Appeals
Profit
Save money, keep from losing money
Health
Body-conscious, healthy
Love or Romance
Sell cosmetics and perfumes
Fear
Social embarrassment, growing old, losing
health, power
Admiration
Celebrity endorsement effective
Convenience
Fast-food and microwave products
Fun and Pleasure
Vacations, beer, amusement parks
Vanity and Egotism
Expensive, conspicuous items
Executional Styles for Advertising
Scientific
Slice-of-Life
Musical
Demonstration
Mood or
Image
Lifestyle
Common
Executional
Styles
Spokesperson/
Testimonial
Fantasy
Real/
Animated
Product
Symbols
Humorous
Methods Used to Evaluate Advertising Campaigns
Pretests
Examples:
• Consumer jury tests
• Portfolio or unfinished rough tests
• Physiological tests
Post-tests
Examples:
• Recognition tests
• Recall tests
• Attitude measures
• Audience size measurement
The Tools of Public Relations
New Product Publicity
Product Placement
Major
Tools
Used By
PR
Professionals
Customer Satisfaction
Phone Lines
Consumer Education
Event Sponsorship
Issue Sponsorship
Web Sites
Types of Consumer & Sales Promotion Goals
Type of buyer
Desired results
Loyal customers
People who buy your
product most or all
of the time
Reinforce behavior,
• Loyalty marketing programs,
increase consumption,
such as frequent-buyer cards
change purchase timing
or frequent-shopper clubs
• Bonus packs that give loyal
consumers an incentive to
stock up or premiums offered
in return for proofs-of-purchase
Break loyalty, persuade •Sampling to introduce your
to switch to your brand
product’s superior qualities
compared to their brand
• Sweepstakes, contests, or
premiums that create interest
in the product
Persuade to buy your
• Any promotion that lowers the
brand more often
price of the product, such as
coupons, price-off packages,
and bonus packs
• Trade deals that help make the
product more readily available
than competing products
Appeal with low prices
• Coupons, price-off packages,
or supply added value
refunds, or trade deals that
that makes price less
reduce the price of brand to
important
match that of the brand that
would have been purchased
Competitor’s
customers
People who buy a
competitor’s product
most or all of the time
Brand switchers
People who buy a
variety of products
in the category
Price buyers
People who
consistently buy the
least expensive brand
Sales promotion examples
Source: From Sales Promotion Essentials, 2E by Don. E. Schultz, William A. Robinson, and Lisa A. Petrison. Reprinted by permission of NTC Publishing Group, Lincolnwood, IL.
Tools for Consumer Sales Promotion
Coupons
Premiums
Six
Categories
of
Consumer
Sales
Promotions
Frequent Buyer Programs
Contests and
Sweepstakes
Samples
Point-of-Purchase
Displays
Tools for Trade Sales Promotion
Trade Allowances
Push Money
Training
Free Merchandise
Store Demonstrations
Business Meetings,
Conventions, Trade-Shows
Six
Categories
of
Trade
Sales
Promotions
Advantages of Personal Selling
Detailed
Information
Message Control
Targeted
Cost Control
Closing Sales
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.
Differences Between Traditional & Relationship Selling
Traditional Personal Selling
Relationship Selling
Sell products (goods and services)
Sell advice, assistance, and counsel
Focus on closing sales
Focus on improving the customer’s bottom line
Limited sales planning
Considers sales planning as top priority
Spend most contact time telling
customers about product
Spend most contact time attempting to build a
problem-solving environment with the customer
Conduct “product-specific” needs
assessment
Conduct discovery in the full scope of the
customer’s operations
“Lone-wolf” approach to the account
Team approach to the account
Proposals and presentations based
on pricing and product features
Proposals and presentations based on profit
impact and strategic benefits to the customer
Sales follow-up focused on product
delivery
Sales follow-up is long term, focused on
long-term relationship enhancement
Source: Robert M. Peterson, Patrick L. Shul, and George H. Lucas, Jr., “Consultative Selling: Walking the Walk in the New Selling Environment,”
National Conference on Sales Management, Proceedings, March 1996.
Steps in the Selling Process
Generating Sales Leads
Qualifying Sales Leads
Basic
Steps in
the
Selling
Process
Making the Sales Approach
Making the Sales
Presentation
Handling Objections
Closing the Sale
Following Up
Functions of Sales Management
Set Sales
Objectives
Evaluate
Sales Force
Manage
Turnover
Structure
Sales Force
Major Tasks of
Sales
Management
Determine
Sales Force
Size
Develop
Compensation Plan
Motivate
Sales Force
Train Sales
Force
Recruit Sales
Force
Cost Determinants of Price
200
Dollars
150
MC
ATC
AVC
100
50
AFC
0
1
2
3
4
5
Quantity
6
7
8
9
10
Break-Even Analysis
Total Revenue
Break Even
Profits
Price ($)
Total Costs
Fixed Costs
Losses
Quantity (units)
Steps in Setting the Right Price
Establish Pricing Goals
Estimate Demand, Costs,
and Profits
Choose Strategy
Fine-Tune Base Price
$ $ $Right
$ Price
$$$$
Legal and Ethical Issues in Pricing
Unfair Trade Practices
Key Legal
and Ethical
Issues
Related to
Price
Price Fixing
Price Discrimination
Predatory Pricing
Discounts, Allowances, and Rebates
Cash
Discount
EDLP
Quantity
Discount
Seasonal
Discounts
Price
Reductions
Functional
Discount
Promotional
Allowances
Trade Loading
Rebates
Geographic Pricing
FOB Origin
Uniform Delivered
Pricing
Tactics
Based on
Geography
Zone Pricing
Freight-Absorption
Basing-Point
Special Pricing Tactics
Single
Price
Two-Part
Pricing
Bundle
Pricing
Flexible
Pricing
Common
Special Pricing
Tactics
Odd-Even
Pricing
Professional
Services
Price
Lining
Bait
Pricing
Leader
Pricing