Transcript Slide 1

Chapter 13
Integrated
Promotion
Decisions
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
The Promotion Mix:
A Communication Toolkit
• Promotion decisions must consider the
objectives the marketer has in mind, as
well as the merits of and costs entailed in
using different tools in the promotion mix.
• In making these decisions, the marketer is
developing a promotional, or an integrated
marketing communication (IMC) plan.
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The Promotion Mix: A Communication
Toolkit
• The principal tools from which a marketer
can choose in developing an IMC plan are:
– Advertising
– Personal selling
– Sales promotion
– Public relations
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Decision Sequence for Developing the Promotion
Mix
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Developing an Integrated Marketing
Communications Plan
• Step 1: Define the audience(s) to be
targeted
– Three broad ways to segment both consumer
and organizational markets:
• Who the customers are
• Where they are
• How they behave
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Developing an Integrated Marketing
Communications Plan
• Step 2: Set the promotional objectives.
– SMART (Specific, Measurable, Attainable,
Relevant, and Time-bound)
– Good objectives should include:
• A statement defining the target audience.
• A statement of how some specific aspect(s) of the
audience’s perceptions, attitudes, or behavior
should change.
• A statement of how quickly such a change is
expected to occur.
• A statement of the degree of change required.
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Developing an Integrated Marketing
Communications Plan
• Step 3: Set the promotion budget
– The percentage-of-sales method
– The competitive-parity method
– The objective-and-task method
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Developing an Integrated Marketing
Communications Plan
• Step 4: Design the promotion mix
– First, marketers decide which promotion
components to use.
– Second, they choose the specific activities
within each component.
– Third, within each activity they must decide
which specific vehicle to employ.
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Strategic Circumstances and the Relative Importance of
Advertising and Personal Selling as Promotional Tools
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Comparing the Merits of the Promotion Mix
Elements
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Developing an Integrated Marketing
Communications Plan
• Step 5: Evaluate the results
– Involves finding out whether the objectives of
the promotional activity have been met—often
via marketing research.
– Research can also provide important insights
into whether the firm attained its distribution
objectives
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The Nitty-Gritty of
Promotional Decision Making
• Making advertising decisions
– Setting advertising objectives
– Objectives must relate to attitudes or
behavior.
– The use of hierarchy-of-effect models move
prospective buyers through a series of
steps—awareness, comprehension,
conviction, action—to the ultimate goal of
purchasing the product.
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The Nitty-Gritty of
Promotional Decision Making
• Setting advertising budgets and making
media choices
– Advertisers must choose some combination of
reach and frequency to attain their advertising
objectives.
– Typically, an advertising medium provides a
rate card.
– Costs are expressed in cost per thousand
impressions or CPM
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The Nitty-Gritty of
Promotional Decision Making
• Traditional media types
• New media
• International media
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The Nitty-Gritty of
Promotional Decision Making
• Developing the creative strategy
– Effective marketing communications is a task
that requires creativity and special expertise.
– Managing the creative effort:
• The unique selling proposition to be delivered
• The source of the message
• The nature of the appeal embodied in the message
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The Nitty-Gritty of
Promotional Decision Making
• Measuring advertising results
• Before Tests – tests made before the
message is released on a full-run basis
– Recall tests
– Sales tests
• After Tests – tests done after the copy is
run in the prescribed media.
– Recognition tests
– Recall tests
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The Nitty-Gritty of
Promotional Decision Making
• Making personal selling decisions
• Planning a sales program involves four
sets of decisions
– Organizing the salesforce.
– Development of account management
policies.
– Making deployment decisions.
– Developing performance expectations for
each sales rep based on forecasts.
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The Nitty-Gritty of
Promotional Decision Making
• The sales cycle
– The duration that it will take to meet with the
various decision makers and convince them
to try the product, perhaps on a limited basis
at first, and then to adopt it more fully.
• Organizing the sales effort in global
markets
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The Nitty-Gritty of
Promotional Decision Making
• Customer service: an increasingly
important personal selling function
• Using technology to enhance sales and
customer service performance
• Recruiting, training, and compensating
salespeople: the keys to salesforce
performance
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Evaluating and Controlling Salesforce
Performance
• Companies use three main approaches in
monitoring the salesforce to evaluate and
control sales performance.
– Sales analysis
– Cost analysis
– Behavioral analysis
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Evaluating and Controlling Salesforce
Performance
• Making sales promotion decisions
– Sales promotion is less risky than advertising.
– Performance is usually easily measurable.
– Primary sales promotion techniques:
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•
•
•
•
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Price-off promotions
Premiums
Sampling
Rebates
Contests and sweepstakes
Trade promotions
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Evaluating and Controlling Salesforce
Performance
• Making public relations decisions
• Public relations has several unique
advantages:
– Lots of information can be communicated.
– High credibility.
– Very low or nil cost to reach customer.
– Supports both pull and push strategies.
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Evaluating and Controlling Salesforce
Performance
• Through public relations, firms
communicate with a variety of publics,
including the consumer, the financial
community and stockholders, the
community, prospective employees,
current employees, suppliers.
• Publicity can be used to accomplish
different objectives among different
groups.
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Take-Aways
• Marketing managers in most companies
face fundamental strategic decisions about
whether to emphasize advertising or
personal selling in their promotion mix.
Identifying the strategic circumstances
provides direction for these decisions.
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Take-Aways
• Getting marketing communications
messages—of any kind, in any medium—
noticed and understood is no easy task.
Many ads and other communication
attempts simply don’t meet their
objectives. Following the guidelines in this
chapter will mitigate this risk.
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Take-Aways
• A clear understanding of one’s target
market is essential for planning and
implementing an effective promotional
program. Without such an understanding,
money is likely to be wasted.
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Take-Aways
• Many marketing communications efforts
are not easy to evaluate. Setting clear and
measurable objectives up front facilitates
doing so.
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Take-Aways
• New media, including the Internet, e-mail,
and mobile telephones, are predicted to
revolutionize ad spending, because their
results—like those for direct marketing
programs—can often be directly
measured.
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Take-Aways
• In companies of all sizes, technology will
play an increasingly meaningful role in
managing sales and customer service
efficiency and effectiveness. Caution must
be exercised, however, to avoid sacrificing
effectiveness for efficiency.
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Take-Aways
• For new product launches on limited
budgets, sales promotion alone can
deliver substantial impact at a fraction of
the cost of conventional approaches.
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