Transcript 4.2 Promotion and Place PPT IB2_Ch_28_Promotion_and_Place_4

4.5 Promotion
4.6 Place
Roberts-IBBM
Promotional Mix

The promotional mix is the combination of
efforts that are used to promote a product.

They must send a consistent message to be
successful.
Promotion

The use of advertising, sales promotion, personal
selling, direct mail, trade fairs, sponsorship and
public relations to inform consumers and persuade
consumers to buy.






Advertising – TV ads, print ads, billboards
Sales promotion – sales, coupons, loyalty programs
Direct mail – mass mailings
Trade fairs – booths at trade fairs (Southern Home Show)
Sponsorship – NASCAR, tennis players, golfers, TV shows paid
to display or promote a particular product
Public relations – controlled publicity and advertising
Why do we PROMOTE?
Inform, Persuade, and Remind








Increase sales by increasing consumer demand
Remind consumer of exiting products and why they are
special
Attract new buyers
Demonstrate the superior quality of product as compared to
its competitors – often occurs after a product has been
updated
Create or reinforce the brand image
Correct misleading reports about the product or the business
and reassure consumers after a “scare” or “accident”
Develop or adapt the public image rather than the product
Encourage stocking by retailers
Promotion Types
Above-the-line promotion


Purchasing communication
with the consumer – AKA –
advertising
Above-the-line

Promotions that
are visual &
auditory
TV Ads, billboards,
radio, print ads
Below-the-line promotion
Short-term incentives to
encourage consumers to
purchase the product
Below-the-line

Promotions that
are tactile
Samples, coupons,
loyalty programs,
games, price deals
Above-the-line Promotion

Advertising

Communicating information about a product or business through the
media such as radio, TV, newspapers, magazines, or billboards.

Informative

Persuasive
Provide information to potential
customers like, price, features,
technical specifications, or where to
purchase
Trying to create a distinct image or brand
identity
Which media to use?

Cost



Profile of the target audience


What is the best media to reach your audience?
Type of product message to deliver


TV and radio can be expensive to purchase and produce.
Print media can be less expensive
Written forms are best for detailed information about a product
Link between the marketing mix and advertising media.
Are they consistent and sending a similar message?

The law and other barriers

Are there bans on certain types of advertising? (Tobacco, alcohol,
adult imagery or language)
Below-the-line Promotion

Sales promotions are used to generate short-term
gains in sales.








Sales or price deals – a temporary reduction in price
Loyalty programs – airline miles, points earned to redeem
for other products and gifts
Coupons
Point-of-sale displays – aisle interrupters, dump-bins
BOGOF – buy one, get one free offers
Games and competitions
Public relations
Sponsorships
Sales Promotions

Sales promotions can be targeted to two
groups

Final consumer – encourages consumers to
purchase (PULL Strategy)

Distribution channel or Retailer – encourage
stocking and display to encourage more sales
(PUSH Strategy)
Promotion Mix

The combination of promotional techniques that are
used to communicate the benefits of the product to
the consumer








Decide on the image of the product
Develop a profile of the target market
Decide on the messages to communicate
Set an appropriate budget
Decide how the messages should be communicated
Establish how the success of the promotional mix is to be
assessed
Execute the promotional plan
Measure its success
PLACE

How should products pass from the
manufacturer to the final customer?

Channel of distribution: the chain of
intermediaries a product passes through from
producer to final consumer
Distribution Channel is Important



Consumers need easy access to the firm’s
product where they can see it, touch it, buy it,
return it.
Manufacturers need distribution that provides
a wide market coverage.
Retailers need to mark-up the product to cover
the costs of sales.
Developing a Channel strategy







Should the product be sold directly to the consumer?
Should the product be sold through retailers?
How many intermediaries?
Where should the product be sold?
Should electronic distribution be used?
How much will it cost to stock products on store or
warehouse shelves?
How well the distribution channel support other
components of the marketing mix?
Factors influencing the channel






Industrial products tend to be sold more directly to its
customers than durable goods.
Geographic area of target market – where are my customers?
The wider area, the more likely intermediaries will be needed.
Level of service expected from customers.
Technical complexity of the product.
Unit value of the product (the more expensive the more likely
to be sold as individual units and direct sales)….think
airplanes
Number of customers (the more customers the larger the need
for wide distribution and intermediaries)… think toilet paper
Direct Selling

Manufacturer to Consumer
Product/Service
Manufacturer
Consumer
Single-Intermediary Channel

Manufacturer to a Retailer to a Customer
Manufacturer
Retailer
Consumer
Two-Intermediary Channel

Manufacturer to Wholesaler to Retailer to a Customer
Manufacturer
Warehouse
Retailer
Consumer
Recent trends in distribution



Increased internet and direct selling of goods
and services
Large supermarkets that act as wholesalers
and retailers
Complete packages are sold….air flights,
rental cars, and hotel accommodations are
packaged and distributed together.
Effective Use of Distribution Channels
Feature
Products or Services
Benefits
Drawbacks
Direct Selling
NO intermediaries
Sometimes called “zero
intermediary” channel
•
Mail order from
manufacturer
• Farmers markets
•
No intermediaries so no
additional profit markup
• Quicker than other
channels
• Producer has complete
control
•
One-intermediary
Usually used for consumer
goods but can be used for
B2B
•
Travel agents selling
airline, hotel, rental car
services
• Large supermarkets that
old their own stock rather
than wholesalers
•
Retailer holds stock and
pays for this cost
• Retailer has product
displays
• Producers focus on
production no selling
•
Two-intermediaries
Wholesaler buys goods
from producer and sells to
retailer
•
In a large country with
many retailers and great
distances, many goods are
distributed this way, e.g.
beverages, books, clothing
•
Wholesaler holds goods
and buys in bulk
• Reduces stock holding
costs for producer
• Wholesaler breaks large
stock quantities into smaller
units to sell to retailer
•
HL
All storage and stock
costs paid for by producer
• No retail outlets
• Can be expensive to
deliver products to
customer
Intermediary takes a profit
which makes product more
expensive
•Producers lose some
control over marketing mix
•Producer has delivery
costs to retailer
Another intermediary
takes a profit which
increases the purchases
price
• Slows down the
distribution chanel
What is an Agent?

A business with the authority to act on behalf
of another firm to market its products.

Examples: Best Buy sells HP computers and
is allowed to handle customer complaints,
provide sales force to sell products, and
creates sales displays.
HL
Supply Chain Management (SCM)

HL
Managing the network of businesses that are
involved in the provision of products to the
final consumers
Supply Chain Management (SCM)

Coordinating these activities include:





HL
All supply companies are kept well informed of
production schedules
Making transportation arrangements for materials
and finished goods
Reducing the number of suppliers
Planning production to meet consumer demand
Ensuring that adequate supplies are delivered, on
time, to retailers or other intermediaries.