Transcript Promotion - BYU Marriott School

Promotion
Communication between the
customers and the company
Dr. Geurts Lecture Winter 1998
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A. Paid for Media
1. Sales = one on one
2. Advertising = one on many
3. Sales Promotion = several on several
B. Public Relations or Publicity - any of the
types of paid media when we do not pay for it
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C. The goal of promotion
to shift the demand curve to the right. After
promotion, consumers will buy more at the same
price or buy the same quantity at a higher price or
a combination of the two.
P
S
D1
Q1
Q2
D2
Q
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D. Functions of Promotion
1. Remind - sponsorship, "brought to you by . . . "
2. Inform
3. Persuade - radio, television
E. Problems with promotion
1. Selective perception - 80% don't ever see the
promotion
2. Selective distortion
3. Selective retention
4. Noise - anything that keeps the message from
getting through (e.g., add could be too humorous to get
the message to the customer)
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II. PROMOTION MIX
A. How much of each type of promotion media to use:
1. Advertising
2. Sales Promotions
3. Personal Selling
4. Publicity
* Personal selling is most effective for industrial products,
advertising is most effective for consumer products, and sales
promotion is most useful for reminding consumers or for an
initial product offering.
B. Promotion to Consumer = pull strategy
C. Promotion to Trade (push to the stores) = push
strategy
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III. PROMOTION BUDGET
A. Techniques for setting the promotional
budget
• 1. Marginal-revenue approach
– a. Ideal method to be used
– b. Very difficult to actually use because it is hard to
determine the marginal benefit
• 2. Objective-task approach - used by most
companies
– a. Define objectives
– b. Determine strategies to obtain objectives
– c. Compute cost of strategies
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III. PROMOTION BUDGET (con’t)
• 3. Percent of sales or projected sales approach
• 4. Competitive-parity approach - copy the competition
• 5. Arbitrary approaches
– a. all the company can afford to put into the budget
– b. use the industry average
– c. use a fixed percentage every year
B. Allocating the promotional budget
• 1. Areas making the most profit should receive the most
money
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Marketing Efforts
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IV. SALES PROMOTIONS
A. Types of sales promotions
1. Coupons
7. Mall or store
promotion
2. Games
8. Trade shows
3. Free gifts
9. Exhibits
4. Tie in with other
product offers
10. Buy 3 cases get 4
5. Athlete using
11. Display materials
product in game
12. Product placement
6. Sponsorship of
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athletic teams
IV.
SALES PROMOTIONS (con’t)
B. Risk of sales promotions
1. Continued emphasis on sales promotions may
cause consumers to expect constant lower prices
2. Money spent on sales promotions takes away
from the advertising budget
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Pricing Promotions
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IV. PUBLICITY
A. Companies often hire a publicity firm - newsprint
is more believable than advertising, believed to be
unbiased
B. Companies create news stories
1.
2.
3.
4.
awards
new product offerings
expansion
heroics of employees, etc.
C. "Free" Advertising - does not take away from the
advertising budget
D. Media has the need to fill slack time and so may
pick up news stories
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Sponsor Promotion
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Direct Marketing
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Forms of Direct Marketing
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