Transcript Basic Marketing, 13th edition

Chapter 14:
Promotion —
Introduction to
Integrated Marketing
Communications
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Chapter 14 Objectives
When you finish this chapter, you should
1. Know the advantages and
6. Understand how new customerdisadvantages of the promotion
initiated interactive communication
methods a marketing manager can
is different.
use in strategy planning.
7. Know how typical promotion plans
2. Understand the integrated marketing
are blended to get an extra push
communications concept and why
from middlemen and help from
most firms use a blend of different
customers in pulling products
promotion methods.
through the channel.
3. Understand the importance of
8. Understand how promotion blends
promotion objectives.
typically vary over the adoption
curve and product life cycle.
4. Know how the communication
process affects promotion planning. 9. Understand how to determine how
much to spend on promotion efforts.
5. Understand how direct-response
promotion is helping marketers
10. Understand the important new
develop more targeted promotion
terms.
blends.
14-2
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Basic Promotion Methods
Target
Market
Product
Place
Personal
Selling
Promotion
Mass
Selling
Advertising
Price
Sales
Promotion
Publicity
Exhibit 14-1
14-3
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Sales Promotion Activities
Aimed at final
consumers or users
Contests
Coupons
Aisle displays
Samples
Trade shows
Point-of-purchase
materials
Banners and
streamers
Trading stamps
Sponsored events
Aimed at middlemen
Price deals
Promotion allowances
Sales contests
Calendars
Gifts
Trade Shows
Meetings
Catalogs
Merchandising aids
Aimed at company’s
own sales force
Contests
Bonuses
Meetings
Portfolios
Displays
Sales aids
Training materials
Exhibit 14-2
14-4
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Promotion and the Demand Curve
Price
D1
D2
0
Promotion efforts may be
targeted to make demand
for the firm’s products
more inelastic and so
more resistant to
counter-moves by the
competition.
Quantity
A. To be more inelastic
Exhibit 14-3A
14-5
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Promotion and the Demand Curve
Price
D
D
0
Quantity
Promotion efforts
may be targeted to
increase the demand
for the firm’s
products.
B. to the right
Exhibit 14-3B
14-6
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Promotion and the Demand Curve
Price
D
D
0
Quantity
Promotion efforts may
be targeted to both
increase demand for the
firm’s products and to
make demand more
inelastic
C. Both to the right and
more inelastic
Exhibit 14-3C
14-7
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Promotion and the Demand Curve
Price
Price
Price
D
D1
D
D2
0
D
D
Quantity
A. To be more elastic
0
Quantity
B. to the right
0
Quantity
C. Both to the right
and more elastic
Exhibit 14-3
14-8
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Promotion and the AIDA Model
Promotion Objectives
Informing
Persuading
Adoption Process
AIDA Model
Awareness
Interest
Evaluation
Trial
Decision
Confirmation
Attention
Interest
{
}
Desire
}
Action
Reminding
Exhibit 14-4
14-9
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
The Traditional Communication Model
Source
Encoding
Message
channel
Decoding
Receiver
Noise
Feedback
Exhibit 14-5
14-10
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Message Interpretation
Encoder
The same
message may be
interpreted
differently by the
encoder and the
decoder
Common
frame of
reference
Decoder
Exhibit 14-6
14-11
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Customer-Initiated Interactive Communication
Receiver
(Customer)
Source’s
Message
Search
Noise
Select a
topic
Message
channel
Exhibit 14-7
14-12
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Push-Pull Strategies
Producer’s Promotion Blend
Exhibit 14-8
14-13
Wholesaler
Promotion
Push
Promotion to
Channel Members
Wholesaler
Promotion
Push
Retailer
Promotion
Push
Business
Customer
Pull
Promotion to
Final Customers
Promotion to
Business Customers
Personal Selling, Sales Promotion, Advertising, Publicity
Final
Consumer
Pull
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
The Adoption Curve
Innovators
(3-5%)
Percent Adoption
90
Early
Adopters
(10-15%)
Early
Majority
(34%)
Late
Majority
(34%)
Laggards/
Nonadopters
(5-16%)
50
20
5
0
Exhibit 14-9
14-14
Time
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Setting the Promotion Budget
Percentage of Sales
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Match Competitors
Per Unit
Uncommitted Resources
Task Method
14-15
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill
Key Terms
Promotion
Personal Selling
Mass Selling
Advertising
Publicity
Sales Promotion
Sales Managers
Advertising Managers
Public Relations
Sales Promotion
Managers
Integrated Marketing
Communications
AIDA Model
Communication
Process
Source
14-16
Receiver
Noise
Encoding
Decoding
Message Channel
Pushing
Pulling
Adoption Curve
Innovators
Early Adopters
Early Majority
Late Majority
Laggards
Nonadopters
Primary Demand
Selective Demand
Task Method
For use only with Perreault and McCarthy texts.
© The McGraw-Hill Companies, Inc., 1999
Irwin/McGraw-Hill