Transcript Promotional mix

Marketing Essentials
The Promotional Mix
Chapter 17 n Promotional Concepts and Strategies
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SECTION 17.1
The Promotional Mix
What You'll Learn
 The role of promotion in marketing in the
marketing mix
 The concept of promotional mix
 The characteristics of personal selling and
advertising
 The communication process
 The nature and scope of publicity
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SECTION 17.1
The Promotional Mix
Why It's Important
Since businesses must continually promote
their organizations, products, and policies to
gain customer acceptance, you will need to
learn successful promotional strategies.
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SECTION 17.1
The Promotional Mix
Key Terms
 promotion
 sales promotion
 promotional mix
 public relations
 product promotion
 communication
 institutional promotion
 publicity
 advertising
 push policy
 pull policy
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SECTION 17.1
The Promotional Mix
-VSChapter 17 n Promotional Concepts and Strategies
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SECTION 17.1
The Promotional Mix
The Concept of the Promotional Mix
Promotion is any form of communication
a business or organization uses to
inform, persuade, or remind people about
its products.
Promotional mix is a combination of the
different types of promotion. A business
decides on the promotional mix that will
be most effective in persuading potential
customers to purchase its products.
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SECTION 17.1
The Promotional Mix
The Role of Promotion in the
Marketing Mix
Overall Marketing
Objectives
•
•
•
•
Marketing Mix
Product
Place
Promotion
Price
Target Market
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Promotional Mix
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Advertising
Public Relations
Sales Promotion
Personal Selling
Promotion Plan
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SECTION 17.1
Competitive Advantage
The main function of a
marketer’s
promotional strategy
is to convince the
target market that the
goods and services
offered provide a
competitive
advantage.
High product quality
Rapid delivery
Low prices
Excellent service
Unique features
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SECTION 17.1
The Promotional Mix
The Concept of the Promotional Mix
A business uses product
promotion to convince potential
customers to buy its products
instead of buying from a competitor.
Institutional promotion is used by
businesses to create a favorable
image for themselves, as opposed to
promoting specific products or
services.
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SECTION 17.1
The Promotional Mix
Types of Promotion
There are four basic
types of promotion:
 personal selling
 advertising
 sales promotion
 public relations
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SECTION 17.1
The Promotional Mix
Planned presentation to
one or more prospective
buyers for the purpose of
making a sale.
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SECTION 17.1
The Promotional Mix
Most commonly distributed
by traditional media, though
increasingly through nontraditional media, such as
Web sites, e-mail, and
blogs.
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SECTION 17.1
The Promotional Mix
Advertising Media
Traditional
Advertising Media
Television
Radio
Newspapers
Magazines
Books
Direct mail
Billboards
Transit cards
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New
Advertising
Media
Internet
Banner ads
Viral marketing
E- mail
Interactive video
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SECTION 17.1
The Promotional Mix
Advertising
Advantages

Reach large number
of people

Low cost per
contact

Can be microtargeted
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Disadvantages

Total cost is high

National reach is
expensive for small
companies
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SECTION 17.1
The Promotional Mix
Marketing activities—other
than personal selling,
advertising, and public
relations—that stimulate
consumer buying and
dealer effectiveness
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SECTION 17.1
The Promotional Mix
Helps an organization
communicate with
customers, suppliers,
stockholders, government
officials, employees, and
the community
.
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SECTION 17.1
The Promotional Mix
Types of Promotion
Publicity is a specific kind of
public relations that involves
placing positive newsworthy
information about a business in
the media. Publicity is much
cheaper than advertising, and a
mention on the news is more
likely to be regarded as objective.
On the other hand, companies
cannot control negative publicity.
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SECTION 17.1
The Promotional Mix
Coordination of the Promotional Mix
Most businesses use
more than one type of
promotion to achieve
their promotional
goals. Each type of
promotion is designed
to complement one
another, and all must
be coordinated.
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SECTION 17.1
Marketing Communication
Communication
The process by which
meanings are
exchanged or shared
through a common set
of symbols.
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SECTION 17.1
Marketing Communication
The Communication Process
Noise
Sender
Encoding
Message
Message
Channel
Decoding
Message
Receiver
Feedback
Channel
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SECTION 17.1
The Goals of Promotion
• Attention
• Interest
• Desire
• Action
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SECTION 17.1
The Promotional Mix
Promotional Budget
In large companies, the marketing
department establishes a promotion budget,
allocates resources, coordinates the
campaign, and determines the right
promotional mix for
the company.
In smaller businesses, these responsibilities
often rest with the owner-operator, are
divided among employees, or contracted
to outside agencies.
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SECTION 17.1
The Promotional Mix
The Push-Pull Concept
A push policy is used to convince a
retailer to stock the products being
promoted, pushing the product to
the retailer. A push strategy relies
heavily on personal selling and
promotion at trade shows.
A pull policy is designed to create
consumer interest, pulling
consumers to the product.
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17.1 ASSESSMENT
Reviewing Key Terms and Concepts
1. What is promotion?
2. Describe the concept of promotional mix.
3. What is the difference between product and
institutional promotion?
4. Why is personal selling the most expensive
form of promotion?
5. What is the difference between publicity and
advertising?
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17.1 ASSESSMENT
Thinking Critically
Java Jacket is a company that designs and prints
ads on the paper jackets that go around hot coffee
cups sold in coffee shops. To find clients to
advertise on the coffee cup jackets, the company
sent a representative to companies like Warner
Brothers, eBay.com, and the Wall Street Journal to
tell them how their ads on coffee cup jackets would
give them inexpensive exposure to a large number
of potential customers. Java Jacket’s activities can
best be described as:
Personal Selling
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17.1 Graphic Organizer
Elements of the Promotional Mix
Personal
Selling
Advertising
Sales
Promotion
Public
Relations
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Integrating Academic Skills: Homework
COMMUNICATION
Find 3 stories about local or national
companies online. Identify each company
and then categorize the publicity in the
article as either positive or negative.
Support your conclusion in each case with
a paragraph or two explaining what the
facts are and how the publicity may help or
harm the business.
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Marketing Essentials
Sales Promotion
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SECTION 17.2
Sales Promotion
What You'll Learn
 The characteristics of sales
promotion
 The concept of trade promotions
 The different kinds of consumer
sales promotions
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SECTION 17.2
Sales Promotion
Why It's Important
To be successful, a business must
continually promote its products. This
section introduces you to the concept of
sales promotion and the techniques
used to increase sales and to inform
customers about a company’s products.
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SECTION 17.2
Sales Promotion
Key Terms
 slotting allowance
 sales incentives
 premiums
 incentives
 licensing
 promotional tie-ins
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SECTION 17.2
Sales Promotion
Sales Promotion
Sales promotion is a short-term
incentive offered to encourage
buying a good or service. Sales
promotions can be directed
toward manufacturers,
wholesalers, retailers, and
consumers, as well as a
company's employees. Sales
promotions are usually supported
by advertising activities.
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SECTION 17.2
Sales Promotion
Trade Promotions
Trade promotions are sales promotion activities
designed to gain manufacturers', wholesalers',
and retailers' support for a product. More money
is actually spent on promoting to businesses than
to consumers. Major trade promotions include:
 slotting allowances
 buying allowances
 trade shows and conventions
 sales incentives
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SECTION 17.2
Sales Promotion
Trade Promotions
Slotting allowances are cash
premiums paid by the manufacturer
to a retail chain for the costs involved
in placing a new product on its
shelves.
Buying allowances are price
discounts given by manufacturers to
wholesalers and retailers to
encourage the purchase of a product.
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SECTION 17.2
Sales Promotion
Trade Promotions
Trade shows and conventions are
events at which businesses can introduce
new products, encourage increased sales
of existing products, and gain continued
company and product support.
Sales incentives are awards given to
managers and employees who
successfully meet or exceed sales
quotas.
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SECTION 17.2
Sales Promotion
Consumer Sales Promotions
Sales promotion efforts designed to encourage
customers to buy a product are called consumer
promotions. They include:
 premiums
 incentives
 product samples
 loyalty marketing programs
 promotional tie-ins
 product placement
 visual merchandising and displays
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SECTION 17.2
Sales Promotion
Premiums
Premiums are an extra item offered
to the consumer, usually in
exchange for some proof of
purchase of the promoted product.
One example: McDonald’s Happy
Meal, which rewards children with a
toy.
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SECTION 17.2
Sales Promotion
Premiums
Coupons are certificates that
entitle customers to cash
discounts on goods or
services.
Factory packs are free gifts
placed in product packages.
These are common in cereal
boxes.
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SECTION 17.2
Sales Promotion
Premiums
Traffic builders are low-cost
premiums such as pens or key
chains given away free to consumers
for visiting a new store or attending
an event.
Coupon plans are ongoing
programs offering a variety of
premiums in exchange for labels,
coupons, or other tokens.
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SECTION 17.2
Sales Promotion
Incentives
Incentives generally are higherpriced products earned and given
through contests (games of skill),
sweepstakes (games of chance),
and rebates (discounts from
manufacturers). Businesses use
incentives to promote many products
because they create customer
excitement and increase sales.
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SECTION 17.2
Sales Promotion
Product Samples
A product sample is a free trial
size of a product sent through
the mail, distributed door-todoor, or given away at retail
stores and trade shows.
Detergents, toothpastes,
shampoos, deodorants, and
colognes are frequently
promoted this way.
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SECTION 17.2
Sales Promotion
Promotional Tie-Ins
Promotional tie-ins involve
coordinated sales
promotional arrangements
between one or more
retailers or manufacturers.
 Example: For the promotion of the
Shrek movie, Disney Studios
cooperated with McDonald's which
made a special Happy Meal with a
Shrek toy.
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SECTION 17.2
Sales Promotion
Loyalty Marketing Programs
Loyalty marketing
programs, also called
frequent buyer programs,
reward customers for making
multiple purchases. Loyalty
marketing was popularized in
the 1980s by the airline
industry, which instituted
frequent flier programs.
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SECTION 17.2
Sales Promotion
Product Placement
With product placement, an
organization can develop product
recognition by making sure that a
product is featured in special
events, on television, or in the
movies.
 Example: Apple's iMac appeared
in popular television shows when
it was first introduced.
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SECTION 17.2
Sales Promotion
Visual Merchandising and Displays
Visual merchandising refers to the
coordination of all physical elements
in a place of business so that it
projects the right image to its
customers.
Displays refer to the visual and
artistic aspects of presenting a
product to a target group of
customers.
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SECTION 17.2
Sales Promotion
Point-of-Purchase Promotion
(P-O-P) display is a promotional
display set up at the retailer’s location
to build traffic, advertise the product,
or induce impulse buying.
These include: shelf “talkers”, shelf
extenders, ads on carts and bags,
end-aisle and floor-stand displays, TV
monitors and in-store messages, and
audiovisual displays.
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17.2
A
SSESSMENT
Reviewing Key Terms and Concepts
1. Why do businesses use sales promotions?
2. What unique characteristics do sales
promotions have?
3. What are trade promotions?
4. What are consumer promotions?
5. Explain the difference between a
sweepstakes and a contest.
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17.2
A
SSESSMENT
Thinking Critically
Consumers who send it 10 UPC symbols
as proof of purchase of Chip Ahoy cookies
will receive a children’s classic DVD.
The DVD is an example of a:
Premium
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