Chapter 14 Promotion Introduction to Integrated Marketing Communications

Basic Promotion Methods Target Market Product Place Personal Selling Promotion Mass Selling Advertising Price

Sales Promotion Activities Aimed at Final Consumers or Users Contests Coupons Aisle displays Samples

The Traditional Communication Model Source Encoding Message channel Decoding Receiver Noise Feedback Exhibit 14

Customer-Initiated Interactive Communication Receiver (Customer) Source’s Message Noise Select a topic Search Message channel

Promotion and the Demand Curve Price D 1 D 2 0 D 2 D

Promotion and the AIDA Model Promotion Objectives Informing Persuading Reminding Adoption Process AIDA Model

Message Interpretation Encoder The same message may be interpreted differently by the encoder and

Push-Pull Strategies Producer’s Promotion Blend Wholesalers’ Promotion Push Promotion to Channel Members Wholesalers’ Promotion

The Adoption Curve Innovators (3 -5%) Percent Adoption 90 Early Adopters (10 -15%) Early

Setting the Promotion Budget Percentage of Sales ? ? ? ? ? Match Competitors

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Basic Promotion Methods Target Market Product Place Personal Selling Promotion Mass Selling Advertising Price Sales Promotion Publicity Exhibit 14 -1 14 -2 For use with Shapiro, Wong, Perreault, and Mc. Carthy texts. Copyright © 2002 Mc. Graw-Hill Ryerson Limited.

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 Intermediaries Price deals Promotion allowances Sales contests Calendars Gifts Trade shows Meetings Catalogues Merchandising aids Aimed at Company’s Own Sales Force Contests Bonuses Meetings Portfolios Displays Sales aids Training materials Exhibit 14 -2 14 -3 For use with Shapiro, Wong, Perreault, and Mc. Carthy texts. Copyright © 2002 Mc. Graw-Hill Ryerson Limited.

The Traditional Communication Model Source Encoding Message channel Decoding Receiver Noise Feedback Exhibit 14 -3 14 -4 For use with Shapiro, Wong, Perreault, and Mc. Carthy texts. Copyright © 2002 Mc. Graw-Hill Ryerson Limited.

Customer-Initiated Interactive Communication Receiver (Customer) Source’s Message Noise Select a topic Search Message channel Exhibit 14 -5 For use with Shapiro, Wong, Perreault, and Mc. Carthy texts. Copyright © 2002 Mc. Graw-Hill Ryerson Limited.

Promotion and the Demand Curve Price D 1 D 2 0 D 2 D 1 Quantity A. To be more elastic 0 Quantity B. To the right 0 Quantity C. Both to the right and more elastic Exhibit 14 -6 For use with Shapiro, Wong, Perreault, and Mc. Carthy texts. Copyright © 2002 Mc. Graw-Hill Ryerson Limited.

Promotion and the AIDA Model Promotion Objectives Informing Persuading Reminding Adoption Process AIDA Model Awareness Interest Evaluation Trial Decision Confirmation Attention Interest { } Desire } Action Exhibit 14 -7 For use with Shapiro, Wong, Perreault, and Mc. Carthy texts. Copyright © 2002 Mc. Graw-Hill Ryerson Limited.

Message Interpretation Encoder The same message may be interpreted differently by the encoder and the decoder Common frame of reference Decoder 14 -8 For use with Shapiro, Wong, Perreault, and Mc. Carthy texts. Copyright © 2002 Mc. Graw-Hill Ryerson Limited.

Push-Pull Strategies Producer’s Promotion Blend Wholesalers’ Promotion Push Promotion to Channel Members Wholesalers’ Promotion Push Retailers’ Promotion Push Business Customers Pull Promotion to Final Customers Promotion to Business Customers Personal Selling, Sales Promotion, Advertising, Publicity Final Consumers Pull Exhibit 14 -8 14 -9 For use with Shapiro, Wong, Perreault, and Mc. Carthy texts. Copyright © 2002 Mc. Graw-Hill Ryerson Limited.

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 -10 Time For use with Shapiro, Wong, Perreault, and Mc. Carthy texts. Copyright © 2002 Mc. Graw-Hill Ryerson Limited.

Setting the Promotion Budget Percentage of Sales ? ? ? ? ? Match Competitors Per Unit Uncommitted Resources Task Method 14 -11 For use with Shapiro, Wong, Perreault, and Mc. Carthy texts. Copyright © 2002 Mc. Graw-Hill Ryerson Limited.