BASIC MARKETING Chapter 14 Promotion Introduction to Integrated

At the end of this presentation, you should be able to: 1. Know the advantages and disadvantages of the promotion methods a marketing manager can use in strategy planning. 2. Understand the integrated marketing communications concept and why most firms use a blend of different promotion methods. 3. Understand the importance of promotion objectives. 4. Know how the communication process affects promotion planning. 5. Know how direct-response promotion is helping marketers develop more targeted promotion blends.

At the end of this presentation, you should be able to: 6. Understand how customer-initiated interactive communication is different. 7. Know how typical promotion plans are blended to get an extra push from wholesalers and retailers and help from customers in pulling products through the channel. 8. Understand how promotion blends typically vary over the adoption curve and product life cycle. 9. Understand how to determine how much to spend on promotion efforts. 10. Understand important new terms.

Marketing Strategy Planning Process

Promotion and Marketing Strategy Planning (Exhibit 14 -1) CH 14: Promotion Intro. to Integrated Marketing Communications Promotion methods CH 15: Personal Selling and Customer Service Managing promotion Effective communication CH 16: Advertising & Sales Promotion Blending promotion

Several Promotion Methods Are Available Personal Selling Mass Selling Different methods of promotion Advertising Publicity Sales Promotion

Sales Promotion Tries to Spark Immediate Interest (Exhibit 14 -2) Aimed at consumers or users • Contests Aimed at wholesalers or • Couponsretailers • Aisle displays • Price deals Aimed at company’s own • Samples • Promotion salesallowances force • Trade shows • Sales constests Point-of-purchase • • Contests Calendars&&Bonuses gifts materials • Meetings Trade shows Banners &&streamers • • Portfolios Meetings Displays Frequent buyer • • Sales aids Catalogs programsmaterials • Training Merchandising aids • Sponsored events • Videos

Sales Promotion

Someone Must Plan, Integrate, and Manage the Promotion Blend Advertising Managers Sales Managers Integrated Marketing Communications Marketing Managers Sales Promotion Managers

Which Method to Use Depends on Promotion Objectives Informing Persuading Reminding

Reminding May Be Enough © 2011 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Promotion Objectives Relate to the Adoption Process and AIDA Mode (Exhibit 14 -3) Promotion Objectives Informing Adoption Process { Awareness Attention Interest Evaluation Persuading Trial Decision Reminding AIDA Model } } Confirmation Desire Action

Interactive Exercise: AIDA

The Traditional Communication Process (Exhibit 14 -4) Source Feedback Encoding Noise Message channel Decoding Receiver

Encoding & Decoding Depend on a Common Frame of Reference (Exhibit 14 -5)

Checking Your Knowledge Ron Popeil has been a pioneer in the use of direct-response television “infomercials. ” Over the years his infomercials have promoted many products, including the Showtime Rotisserie Barbecue, a food dehydrating machine, and the world-famous “Veg-O-Matic. ” The chief advantage of the infomercial is that it provides plenty of time to describe and demonstrate a product’s benefits in detail. The choice of the infomercial is related mainly to the _____ element of the communication process. A. message channel B. encoding C. decoding D. feedback E. noise

Encoding and Decoding © 2011 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Integrated Direct-Response Promotion Is Very Targeted More Than Direct Mail Target Directly With a Database Ethical Concerns

A Model of Customer-Initiated Interactive Communication (Exhibit 14 -6) Receiver (customer) Source’s message Search Noise Select a topic Message channel

How Typical Promotion Plans Are Blended and Integrated (Exhibit 14 -7)

Other Promotional Elements of Pushing

Pulling – Demand Pulls the Product through the Channel (Exhibit 14 -7)

An Example of Pulling

Checking Your Knowledge Fido, Inc. is a producer of dog food and is getting ready to introduce a new brand. The firm’s marketing research department learns that a competitor is planning to launch another brand about two weeks after Fido’s launch. Fido’s marketing department quickly mails a set of dated coupons to several thousand consumers in a purchased database of dog owners, encouraging them to ask for the new Fido brand in their favorite store and to stock up on the new brand using the coupons. This is an example of: A. pulling. B. noise. C. pushing. D. encoding. E. decoding.

Adoption Processes Can Guide Promotion Planning (Exhibit 14 -8)

Appeal for Innovators

Stimulating Adoption of an Image © 2011 Mc. Graw-Hill Companies, Inc. , Mc. Graw-Hill/Irwin

Promotion Varies Over the Life Cycle “This new idea is good” “Our brand is best” “Our brand is better, really” “Let’s tell those who still want our product”

Nature of Competition Requires Different Promotion

Setting the Promotion Budget Percentage of Sales Task Method

Setting the Promotion Budget § Budget based on percent of past or expected sales § most common approach § main advantage is ease § can lead to major problems, including cutbacks when more money is needed § Task method—budgets for what needs to be accomplished § usually the sensible approach § requires that activities be evaluated against objectives § Same ideas apply in budgeting other types of marketing activities

Study Question 1 Which of the following is the main type of "mass selling"? A. Personal selling. B. Publicity. C. Sales promotion. D. Advertising. E. Both B and D.

Study Question 2 A car company sent three automobile magazines some technical information and explanations about the features of its innovative new model. One of the magazines later printed a story about the car. This is an example of: A. personal selling. B. advertising. C. publicity. D. sales promotion. E. None of the above

Study Question 3 Blending the firm's promotion efforts to convey a complete and consistent message is the goal of: A. Sales management communications. B. Sales promotion communications. C. Integrated promotional marketing. D. Integrated marketing communications. E. Integrated sales promotion.

Study Question 4 What basic promotion objective should be emphasized by a producer introducing a really new product which satisfies customer needs better than any existing product? A. Persuading B. Reminding C. Maximizing D. Informing E. Communicating

Study Question 5 What basic promotion objective should be sought by a producer whose Product is very similar to its many competitors' Products? A. Persuading B. Promoting C. Communicating D. Informing E. Reminding