Transcript Chapter 3: Promotion

Marketing Essentials
n Chapter 17 Promotional Concepts and Strategies
Section 17.1 The Promotional Mix
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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 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
Types of Promotion
Personal Selling is one of the largest forms
of promotion. It is any form of direct contact
occurring between a salesperson and a
customer.
The advantages:
1.There is two way communications between
the seller and buyer
2.There is immediate feedback.
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SECTION 17.1
The Promotional Mix
Examples of Personal Selling
A salesperson at Foot Locker helping you with
shoes
A car salesman/woman
Telemarketing- selling over the telephone (not
too common now)
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SECTION 17.1
The Promotional Mix
Features of Personal Selling
•Designed to influence purchase decisions
•Very expensive
•Should not be a “strong arm” tactic
•Salespeople HAVE to be knowledgeable
about what they are selling
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SECTION 17.1
The Promotional Mix
• Advertising is any paid form of
nonpersonal presentation and promotion of
ideas, goods, or services by an identified
sponsor
• American businesses spend about $200
billion each year on advertising.
FYI: This will be a brief overview on
advertising. The next chapter consists
entirely of advertising
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SECTION 17.1
The Promotional Mix
• Examples of advertising:
1. TV ads
2. Radio ads
3. Magazine ads
4. Direct mail
5. Outdoor advertising (billboards, etc)
6. Transit advertising (on a bus, etc.)
7. Online pop ups
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SECTION 17.1
The Promotional Mix
Features of advertising:
• Not limited to products
• Has to be paid for
• Same message for everyone
• Actual cost is high
Advantages:
• Can be seen/heard by many customers
• Per person cost is typically low
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SECTION 17.1
The Promotional Mix
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.
(All marketing activities other than personal
selling, advertising and public relations that are
used to stimulate customer purchases)
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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
Examples
 displays
 Fashion shows
 product samples
 loyalty marketing
programs
 promotional tie-ins
 product placement
 Free gifts (key
chain)
 Free samples
 Coupons
 Buy one, get one
free
 Competitions/prizes
 Financing
 visual
merchandising and
displays
 Trade shows
 Conventions
 Buying allowances
 Slotting allowances
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SECTION 17.2
Sales Promotion
Advantages
•There are 100’s of items to choose from
•Companies can mix and match
•It can be very inexpensive
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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.
Note: Publicity can also be very negative!
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SECTION 17.1
The Promotional Mix
Publicity Examples
• Press conferences
•News Releases
•Appearance of an author/movie star
•Article written up in newspaper/magazine
•Mention of a companies charitable activities
•Segment on the news
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SECTION 17.1
The Promotional Mix
Publicity Features
• Consumers pay close attention to publicity
•View publicity as news
•Publicity is non personal
Publicity advantages
•It’s free
•Has more credibility b/c it is not a commercial
message and no one is being paid to say
whatever it is they are saying
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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
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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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
Some people think that advertising is a
waste of money that needlessly raises the
prices of goods and services. What do you
think? Is the money spent on advertising
justified? Provide an argument to support
your position.
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17.1 Graphic Organizer
Elements of the Promotional Mix
Personal
Selling
Advertising
Sales
Promotion
Public
Relations
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SECTION 17.2
Sales Promotion
Sales Promotion
Public Relations refers to any
activity designed to create a
favorable image of a business,
its products, or its policies
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