Chapter 16 Using Effective Promotions Mc GrawHillIrwin Copyright

Chapter 16 Using Effective Promotions Mc. Graw-Hill/Irwin Copyright © 2013 by The Mc. Graw-Hill Companies, Inc. All rights reserved.

PROMOTION in an ORGANIZATION • Promotion Mix -- The combination of promotional tools an organization uses. The traditional mix includes: 16 -2

ADVERTISING 16 -3

ADVERTISING in the FIRM • Advertising -- Paid, nonpersonal communication through various media by organizations and individuals who are in some way indentified in the message. • Major goals of advertising: - Inform - Persuade - Remind 16 -4

IMPACT of ADVERTISING • Total advertising expenditures exceed $241 billion yearly. • Consumers benefit because production costs of TV programs, radio programs, newspapers and magazines are paid for by advertisers. • Marketers choose ad media that will reach the target market. 16 -5

SOCIAL ADVERTISING • Social media advertising is growing so fast, marketers can’t keep up. • Starbucks has over 12 million followers on Twitter. • Mc. Donald’s has over 7 million fans on Facebook. 16 -6

MATCH GAME Match the Company with the Slogan • “Everybody doesn’t like something, but nobody doesn’t like ______. ” • “It takes a licking and keeps on ticking. ” • “With a name like _____, it has to be good. ” • “Good to the last drop. ” • “Betcha can’t eat just one!” 16 -7

POPULAR ADVERTISING MEDIA • TV advertising is still the dominant media. • Digital Video Recorders (DVRs) challenge TV advertising because viewers can skip ads. • Product Placement -Advertisers pay to put their products into TV shows and movies where the audience will see them. 16 -8

INFOMERCIALS and ONLINE ADVERTISING • Infomercial -- A full length TV program devoted exclusively to promote a particular product. • Online Ads are attempts to get potential customers to a web site to learn about a product. 16 -9

INFOMERCIAL HALL of FAME The Biggest Hits Over the Past 40 Years • Veg-O-Matic • Ginsu Knives • The Clapper • Thigh Master • George Foreman Grill • Bowflex Source: Fortune, www. fortune. com, accessed July 2011. 16 -10

MONITORING AD EFFECTIVENESS • Dr. Pepper posts messages on Facebook and monitors the results from their over 8. 5 million fans. • Richard Branson tweets his customer base to maintain two-way communication. Photo Courtesy of: Brent Moore 16 -11

ADVERTISING GLOBALLY 16 -12

ADVERTISING EXPENDITURE by MEDIA in $ MILLIONS Rank Media Projected 2013 Spending 1 Direct Mail $52. 3 2 Broadcast TV 36. 8 3 Newspaper 23. 4 4 Cable TV 27 5 Radio 15. 9 6 Yellow Pages 11. 9 7 Consumer Magazine 9. 1 8 Internet 25. 3 Other 39. 7 Total 241. 4 16 -13

GLOBAL ADVERTISING STRATEGY • Globalism requires marketers to develop a single product and promotional strategy to implement worldwide. • Problems can arise in global markets with using one advertising campaign in all countries - especially bad translations. 16 -14

REGIONAL ADVERTISING STRATEGY • Regionalism – specific ads for each country or for specific groups within a country. (most effective) 16 -15

PERSONAL SELLING 16 -16

PERSONAL SELLING • Personal Selling -- The face-to-face presentation and promotion of a product, including the salesperson’s search for new prospects and follow-up service. 16 -17

STEPS in the B 2 B SELLING PROCESS 1. Prospect and qualify 16 -18

PROSPECTING and QUALIFYING in SELLING • Prospecting -- Researching potential buyers and choosing those most likely to buy. • Qualifying -- Making sure customers have a need for a product, the authority to buy and the willingness to listen to a sales message. • Prospect -- A customer who meets the qualifying criteria. 16 -19

STEPS in the B 2 B SELLING PROCESS 2. Approach 3. Make a presentation 4. Answer objections 5. Close the sale • Trial Close -- A statement or question that moves the process toward the purchase. 6. Follow up 16 -20

STEPS in the B 2 C SELLING PROCESS 16 -21

USING PUBLIC RELATIONS in PROMOTION 16 -22

USING PUBLIC RELATIONS in PROMOTION • Public Relations (PR) -- Evaluates public attitudes, changes policies and procedures in response to the public, and executes a program of action and information to earn public understanding and acceptance. • 3 steps of a good PR program: 1) Listen to the public 2) Change policies and procedures 3) Inform people that organization is responsive to their needs 16 -23

PUBLICITY • Publicity -- Any information about an individual, product or organization that’s distributed to the public through the media and is not paid for or controlled by the seller. 16 -24

ADVANTAGES of PUBLICITY • Free • Reaches people who would not look at an advertisement • More believable than advertising 16 -25

DISADVANTAGES of PUBLICITY • No control over whether the media will use a story or when they may release it. • Once a story has been run, it is not likely to run again. • There is such a thing as bad publicity. 16 -26

SALES PROMOTIONS 16 -27

SALES PROMOTIONS • Sales Promotion -- The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities. 16 -28

SOME KEY CONSUMER SALES PROMOTIONS • Coupons • Demonstrations • Sampling • Sweepstakes • In-store Displays • Contests 16 -29

USING WORD-of-MOUTH PROMOTION • Word-of-Mouth Promotion -- People tell others about products they have purchased. • Word-of-Mouth is important for products like: - Restaurants - Daycare and Eldercare - Car Repair Shops - Hair Stylists - Hotels 16 -30

EMERGING PROMOTIONAL TOOLS • Viral Marketing -- Paying customers to say positive things on the Internet or setting up multiple selling schemes whereby consumers get commissions. • People who promote through viral marketing often receive SWAG which can include free tickets, shirts, and other merchandise. 16 -31

BLOGS, PODCASTS, and E-MAILS • Blog -- Short for web log; an online diary that looks like a webpage, but is easier to create and update by posting text, photos, videos, or links. • Podcasting -- A way to distribute audio and video programs via the Internet. 16 -32

MOBILE MEDIA Marketers make use of cell phones to text customers about product offers and other company information. 16 -33

PUSH and PULL PROMOTIONAL STRATEGIES • Push Strategy -- Producers use advertising, personal selling, sales promotion, and other tools to get their products stocked on shelves. • Pull Strategy -- Directs heavy advertising and sales promotions efforts towards consumers and gets the public to request their products from retailers. 16 -34

PUSH, PULL, PROMOTIONAL STRATEGIES § Convince wholesalers and retailers to stock and sell § Producer uses trade discounts, personal selling, cooperative advertising to convince the intermediaries § Idea is to push the product through the distribution system to the stores § Heavy advertisements and sales promotion efforts § Directed at consumers so that they will request the products from retailers § Products are pulled down through the distribution system 16 -35

MANAGING THE PROMOTION MIX § Large, homogeneous groups of consumers are best reached through ADVERTISING § Large organizations are best reached through PERSONAL SELLING § SALES PROMOTION motivates to buy now § PUBLICITY adds support and creates a good impression § WORD OF MOUTH is often the most powerful promotional tool 16 -36

INTEGRATED MARKETING COMMUNICATION (IMC) • Integrated Marketing Communication (IMC) -Combines the promotional tools into one comprehensive strategy. IMC is used to: - Create a positive brand image. - Meet the needs of consumers. - Meet the strategic marketing and promotional goals of the firm. 16 -37