Transcript The Role of Promotion

ME Ch 19
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Role of Promotion
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• Promotion- any form of communication a
business or organization uses to inform,
persuade, or remind people about its products
and improve its public images.
• Product promotion - used to convince potential
customers to buy products from it instead of
from a competitor.
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Explains major features and benefits of its products
Tells where those products are sold
Advertises sales on those products
Answers customer questions
Introduces new products
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The Role of Promotion
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• Institutional Promotion- used to create a
favorable image for itself. Does not directly sell a
certain product. However, may ultimately result
in increased sales of a company’s products.
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The Role of Promotion
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• 1. Advertising - any paid form of non-personal
presentation and promotion of ideas, goods, or
services by an identified sponsor.
• Six Advantages of Advertising
• 1. A large number of people usually see the advertiser’s message
• 2. Costs per potential customer are usually lower than other forms of
promotion
• 3. Can choose the most appropriate media to reach target mkt
• 4. Can control the content of an advertisement
• 5. Ads are subject to repeat viewing
• Ads can “presale” products
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Four Types of Promotion
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Four Types of Promotion
• 1. Cannot focus well on individual needs
• 2. Some forms of advertising can be too
expensive for many businesses
• 3. Sometimes advertising is wasteful and
inefficient - message may be spent on nonpotential customers
• 4. Advertising must be brief
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• Four Disadvantages of Advertising
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• 2. Publicity - placing newsworthy information
about a company, product, or person in the
media. Can be used to promote particular events
and promote particular products. The main
purpose of publicity is to build an image.
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Four Types of Promotion
• Image - the way a business or organization is defined
in people’s minds.
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Four Types of Promotion
• Publicity is free; advertising is not
• Can be used to create a positive image within the
community
• Viewed as being more credible or believable than
advertising
• Viewed as news, people more attention to publicity
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• Advantages of Publicity
• Disadvantages of Publicity
• Give up much of your control of your message
• Not all publicity is positive
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• 3. Sales Promotion - All marketing activities, other than
personal selling, advertising, and publicity, that are used to
stimulate consumer purchasing and sales effectiveness.
• Objectives of Sales Promotion
• Increase sales
• Inform customers about new products
• Create a positive store or corporate image
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Four Types of Promotion
• 3 Characteristics
• Short term activities
• Offers some type of incentive
• Can be successfully used in all channels of distribution
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Four Types of Promotion
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• Sales promotion can be either consumer or trade oriented
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• Trade Promotions - sales promotion activities designed to gain
manufacturers’, wholesalers’, and retailers’ support for a product.
More money is spent on promoting to businesses than to
consumers.
• 1. Slotting allowances - a cash premium paid by the manufacture
to a retail chain for the costs involved in placing a new product on
its shelves.
• 2. Buying allowances - special price discount given by
manufacturers to wholesalers and retailers to encourage them to
either buy a product or buy a larger quantity.
• 3. Trade Shows and Conventions - designed to reach wholesalers
• 4. Sales incentives - awards given managers and employees who
successfully meet or exceed their company’s set sales quota.
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Four Types of Promotion
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Four Types of Promotion
• 1. Licensing - Organizations, such as manufactures, movie
makers, sports teams, and celebrities, may license for a fee
their logo, trademark, trade characters, names and
likenesses, or personal endorsements to a business to be
used in promoting the business’s products.
• 2. Promotional tie-ins - involve sales promotional
arrangements between one or more retailers or
manufacturers. They combine their resources (advertising
and sales promotional activities) to do a promotion that
creates additional sales for each partner.
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• Consumer Sales Promotions - designed to encourage
customers to buy a product.
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• 3. Visual Merchandising and Displays • Visual Merchandising - the coordination of all
physical elements in a place of business so that
it projects the right image to its customers
• Displays - visual and artistic aspects of
presenting a product to a target group of
customers.
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Four Types of Promotion
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Four Types of Promotion
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Coupons - certificates given to customers entitling cash discounts
Factory Packs (in-packs)- free gifts placed in product packages
Traffic Builders - low cost premiums like key chains, pens
Coupon Plans - ongoing programs in exchange for labels, coupons, or
other tokens from one or more purchases
• Incentives - higher-priced products given in contests or
sweepstakes
• 5. Product Samples - free trial size of a product that is sent
through the mail, distributed door-to-door, or through retail
stores and trade shows
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• 4. Premium and Incentives - most popular and frequently used
sales promotion type
• Premiums - low cost items given away free to consumers as a
condition of purchase.
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Four Types of Promotion
• Advantages of Sales Promotions
• Disadvantages of Sales Promotions
• Difficult to end without the customers becoming
dissatisfied
• Store image and sales can suffer if the promotion is
not properly planned and managed
• Only designed to supplement other promotional
efforts and cannot make up for poor products
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• Unique and has special appeal to a potential customer
• Helps build customer loyalty
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Four Types of Promotion
• Order-taking personnel - cashiers, counter clerks, and sales
associates, perform routine tasks.
• Order-getting personnel - professional salespeople, are more
involved in informing customers and helping them to buy. Usually
sell big ticket items like real estate, cars, appliances, and
industrial goods
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• 4. Personal Selling - making an oral sales presentation to
one or more potential buyers. On a per contact basis,
personal selling is the most expensive form of
promotion.
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• Promotional Mix - a combination of different types of
promotion. A business decides on a promotional mix that
will be most effective in persuading customers or other
businesses to purchase and support the business’s
products.
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Four Types of Promotion
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Promotional Mix
• Factors affecting the selection of a promotional
mix
• Type of product
• Product nature
• Stage of life cycle: Intro, Growth, Mature, Decline
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• Good, Service, or Idea
• Product’s market
• Type of consumer
• Number of Consumers
• Geographical location
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Promotional Mix
• Historical perspective
• Available funds
• Size of sales force
• External Factor: Competition
• External Factor: Government Regulations
• Promotion & Marketing are interrelated
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• Distribution System
• Product’s Company
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• Publicity - Placing newsworthy information
about a company, product, or person in the
media.
• Advantages
• Free to the business
• Seen as more credible than advertising
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Publicity and Public Relations
• Disadvantages
• Lack of control by the business - bad stories can
get printed
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Publicity and Public Relations
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Increasing sales
Increasing firm’s good reputation
Increasing customers reception of advertising messages
Spreading accurate information to the public
Conditioning customers to expect quality products from the
company
• Reducing the impact of problems
• Helping to obtain better treatment from government
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• Public Relations - any activity designed to create goodwill
toward a business.
• Benefits of PR
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Audiences for PR
• Employee Relations - goal is to keep your employees
happy by using:
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Tuition reimbursement
Newsletters
Health and wellness programs
Opportunities for communications
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• Internal Audiences - groups within the organization
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Audiences for PR
• Provide special services and amenities such as gift-wrapping,
check cashing, free delivery, free parking, etc.
• Advisory boards - panels of consumers that make suggestions
about products and businesses
• Customer newsletters, annual reports
• Customer events - seminars, lunches, entertainment
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• External Audiences - groups outside the organization
• Customers - Satisfied customers = repeat business. Ways
to keep customers happy include:
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Audiences for PR
• School partnerships - donating products to the high
school
• Sponsorship of community events
• Scholarships
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• Community - company sponsors activities that
benefit the civic, social, and cultural life of the
community. Activities can include:
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• News Release - a pre-written story about the company that is
sent to various media for publication. It usually contains
information about the company’s employees, stores,
operations, products, corporate philosophy, or participation
in an event or program. Can contain hard or soft news.
• Hard News - information that should be announced right away because
the public will want to know about it immediately
• Soft News - information that does not need to be announced
immediately because it will be of as much interest to the public later as
it is now
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Public Relations
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To introduce new products
To keep the business in the public eye
To position the business’s image
To support good employee relations
To create good community relations
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Purposes of News Releases
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Include a captioned photograph with the release
Meet media deadlines
Write an appropriate number of releases
Direct the release to a specific person
Advise the staff that you have sent out a release
Reread the release after setting it aside
Keep a copy of every release
Send a cover letter with the release
Send a thank-you note after the release is used
Avoid pressuring the editor
Avoid mentioning publicity or advertising
Avoid playing favorites
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Getting Your News Release in the
Media
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• Press Kit - a folder containing articles, news releases,
feature stories, and photographs about a company,
product, or person. Press kits are given to the media to
assist them in reporting on the intended news item.
• Press Conference - a meeting in which media members
are invited by the business or organization to hear an
announcement about a newsworthy event.
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Public Relations
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• Materialism: increase social status by purchasing
• Profit: Save money; make money
• Fear of Loss: prevent loss; guarantee; safety; save time;
protect property
• Comfort/Pleasure: Enjoyment; health; comfort; food and
drink; beauty; entertainment; sports; recreation
• Avoidance of Pain: Protection; relief from pain; less work;
good health;
• Love/Affection: Family; social approval; friendship
• Pride/Prestige: Social acceptance; style; fashion; high quality;
learning; advancement; imitation; good public image.
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Advertising Messages
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Impact of Technology
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• Information can be communicated by more
venues, and messages can be customized
• Internet enables banners & pop up ads
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Advertising to Children
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• Children are impressionable, and the wrong
kinds of advertising can affect their
development.
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• Messages should be factual
• Messages should be aimed at appropriate
audiences
• Messages should follow laws of host countries
• Messages should avoid stereotypes
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Ethics
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