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.

Chapter Sixteen LEARNING GOALS 1. Identify the new and traditional tools that make up the promotion mix. 2. Contrast the advantages and disadvantages of various advertising media, including the Internet and social media. 3. Illustrate the steps of the B 2 B and B 2 C selling processes. 16 -2

Chapter Sixteen LEARNING GOALS 4. Describe the role of the public relations department, and show publicity fits in that role. 5. Assess the effectiveness of various forms of sales promotion, including sampling. 6. Show word of mouth, e-mail marketing, viral marketing, blogging, podcasting, and mobile marketing work. 16 -3

Profile ANDREW MASON Groupon • Groupon grew faster than any e-company in history, from $740 million in 2010 to $4 billion in 2011. • Google offered $6 billion in December 2010, but Mason rejected the offer. • Groupon. Now offers a variety of discounts via smartphone. 16 -4

Chapter Sixteen NAME that COMPANY This beverage company has 8. 5 million Facebook fans. It posts two daily messages and then monitors how many times each message is reviewed, how many times it is shared, and what the fan response to the messages are. It also uses Facebook to test potential ads before airing them on traditional media like TV. Name that company! 16 -5

Promotion and the Promotion Mix LG 1 PROMOTION in an ORGANIZATION • Promotion Mix -- The combination of promotional tools an organization uses. The traditional mix includes: 16 -6

Promotion and the Promotion Mix LG 1 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 -7

FRESH-BAKED PROMOTION Spotlight on Small Business • Amy Scherber of Amy’s Bread can’t afford to outsource her promotions, so she needs to get creative. • She sends newspaper editors stories about her company and has an assortment of company shirts. • She builds strong word-of-mouth by keeping in touch with her community members. 16 -8

Promotion and the Promotion Mix LG 1 STEPS in a PROMOTIONAL CAMPAIGN 1. Identify a target market 2. Define objectives 3. Determine a promotional budget 4. Develop a unifying message 5. Implement the plan 6. Evaluate effectiveness 16 -9

Promotion and the Promotion Mix CLASSIC CAMPAIGNS LG 1 Brilliant Marketing Ideas Campaign Company Why it’s Cool A Diamond is Forever De Beers Since 1939, it’s been tapping into our emotions. Marlboro Man Marlboro He’s the most successful trade character ever. Does she… or doesn’t she? Clairol The birth of the “shock ad” in 1957. 1984 Apple The uncommercial didn’t explain the product. Change We Can Believe In Barack Obama’s 2008 Campaign Obama was 2008 Marketer of the Year with his grassroots social media campaign. I’m With Coco Conan O’Brien Fan Support A fan-created image erupted into a huge online presence making O’Brien a folk hero. Source: Entrepreneur, February 2010 and Entrepreneur, February 2011. 16 -10

Advertising: Informing, Persuading and Reminding ADVERTISING in the FIRM LG 2 • 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 -11

Advertising: Informing, Persuading and Reminding IMPACT of ADVERTISING LG 2 • 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 -12

Advertising: Informing, Persuading and Reminding SOCIAL ADVERTISING LG 2 • 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 -13

Advertising: Informing, Persuading and Reminding MAJOR CATEGORIES of ADVERTISING LG 2 Category What it is Retail From retail stores to consumers Trade From manufacturers to wholesalers and retailers c B 2 B From manufacturers to other manufacturers Institutional Creates a desirable image for an organization Product Creates a desirable image for a product or service 16 -14

Advertising: Informing, Persuading and Reminding MAJOR CATEGORIES of ADVERTISING LG 2 (Continued) Category What it is Advocacy Supports a particular view of an issue Comparative Compares competing products Interactive Customer-oriented ads that allows customers to choose information to receive Online Computer ads featured on different sites Mobile Ads that reach consumers on cell phones 16 -15

Advertising: Informing, Persuading and Reminding LG 2 ADVERTISING EXPENDITURE by MEDIA in $ MILLIONS Rank Media Projected 2010 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 -16

Promotion and the Promotion Mix DEAR MR. POSTMAN… LG 1 Steps in Launching a Direct-Mail Campaign 1. Plan: What should your mailing accomplish? 2. Get the Right List: The better the list, the better your chance of success. 3. Stand Out: Make your ad like no other. 4. Get Help: Contact a marketing firm with direct mail experience. 5. Follow Up: One mailing is not enough. 16 -17

Advertising: Informing, Persuading and Reminding LG 2 MATCH GAME Match the Company with the Slogan • “Everybody doesn’t like something, but nobody doesn’t like ______. ” • “We bring good things to life. ” • “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!” • “Because you’re worth it. ” 16 -18

Advertising: Informing, Persuading and Reminding LG 2 IT’S a DOG’S LIFE Famous and Not-so-Famous Dogs in Advertising Pooch Company Nipper RCA Tige Buster Brown Shoes Chihuahua Taco Bell Spuds Mc. Kenzie Bud Light Mc. Gruff The Crime Dog Duke Bush’s Beans Bullseye Target 16 -19

Television Advertising POPULAR ADVERTISING MEDIA LG 2 • 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 -20

Television Advertising LG 2 LET’S GO to the MOVIES Memorable Product Placements of 2011 Movie Product(s) The Fighter Everlast and Budweiser The Kids are Alright Home Depot, Volvo, Bell Helmets 127 Hours Sunkist and Perrier The Kings Speech Rolls-Royce The Social Network Sony Vaio and Mountain Dew Source: Fortune, February 28, 2011. 16 -21

Infomercials and Online Advertising LG 2 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. • Interactive Promotion -- Allows marketers to open a dialogue between buyers and sellers and let them work together to create a beneficial exchange. 16 -22

Infomercials and Online Advertising INFOMERCIAL HALL of FAME LG 2 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 -23

Infomercials and Online Advertising LG 2 ONLINE EXPERIENCE How to Avoid Losing Customers Over a Bad Web Site 1. Brand messaging is key. 2. Site must be easy to navigate. 3. Make sure calls to action are effective. 4. Users want fast, readable sites. 5. Users with disabilities should be able to navigate. Source: Entrepreneur, October 2010. 16 -24

SOCIAL MEDIA COMPLEMENTS OTHER PROMOTION (Social Media in Business) • National Trust for Historic Preservation believes that investing in social media helps the Trust reach certain goals, such as building awareness for preservation. • Kassie Rempel of Simply. Soles sends out hand written thank-you notes and increases social media accessibility. Both can help marketers relate to customers on a personal level. 16 -25

SOCIAL SCAMMERS How to Protect Yourself From Schemers 1. Be wary of requests for money transfers -- even from friends’ accounts. 2. Be wary when you use applications. Don’t give unnecessary information. 3. Use URL expanders to see the full address of links on friends’ pages. Photo Courtesy of: Paul Klintworth Source: Kiplinger’s Personal Finance, December 2010. 16 -26

Using Social Media to Monitor Ad Effectiveness LG 2 MONITORING AD EFFECTIVENESS • Dr. Pepper posts messages on Facebook and monitors the results from their over 8. 5 million fans. • Richard Branson and Tony Hsieh all tweet their customer base to maintain two-way communication. Photo Courtesy of: Brent Moore 16 -27

Using Social Media to Monitor Ad Effectiveness SOCIALLY SUPERIOR LG 2 Lessons From the Wisdom of the Old Spice Man 1. Create a strong persona. 2. Have customers play along through Twitter and Facebook. 3. Engage bloggers. 4. Personalize the experience. 5. Keep your videos short and sweet! Photo Courtesy of: Dirk Houbrechts Source: Entrepreneur, September 2010. 16 -28

ELECTRONIC ETHICS (Making Ethical Decisions) You have received personal info on your phone about fellow workers, including your boss. You know that the info could lead to firing of those workers and managers. You also know that other workers have received the same info. Should you pass it along to your immediate supervisor or not? What are the ethical issues involved? What would you do? What do you expect to be the consequences of your actions? 16 -29

Global Advertising GLOBAL ADVERTISING LG 2 • 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 -30

PROMOTION in RURAL INDIA (Reaching Beyond Our Borders) • India's 700 million rural consumers are spending more than ever. • International brands are sending salesmen to reach these customers by giving free Castrol oil changes for tractors, passing out bowls of Nestlé noodles, and selling Unilever soaps. • These salesmen must be aware of social customs to be successful. 16 -31

Personal Selling: Providing Personal Attention PERSONAL SELLING LG 3 • Personal Selling -- The face-to-face presentation and promotion of a product, including the salesperson’s search for new prospects and follow-up service. • Salespeople need to listen to customer needs, help reach a solution and do everything possible to make the transaction as simple as possible. 16 -32

Steps in the Selling Process STEPS in the SELLING PROCESS LG 3 1. Prospect and qualify 2. Pre-approach 3. Approach 4. Make a presentation 5. Answer objections 6. Close the sale • Trial Close -- A statement or question that moves the process toward the purchase. 7. Follow up 16 -33

Steps in the Selling Process LG 3 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 -34

Steps in the Selling Process LG 3 BUY THIS! Successful Selling Strategies • Know your competition • Understand your customer’s business • Differentiate your product or service • Sell to the people most likely to buy • Build relationships • Put the right people in the right selling spots 16 -35

Steps in the Selling Process WHOOPS! Sales Slip-Ups LG 3 • Not feeling the customer’s pain • Making money is the only goal • Seeing sales as just a job • Getting upset during the presentation • Failing to properly prepare or over-preparing • Not being yourself • Neglecting the relationship Source: Fortune Magazine. 16 -36

The Businessto-Consumer Sales Process LG 3 STEPS in the B 2 C SELLING PROCESS 16 -37

Progress Assessment PROGRESS ASSESSMENT • What are the four traditional elements of the promotion mix? • What are three most important advertising media in order of dollars spent? • What are the seven steps in the B 2 B selling process? 16 -38

Public Relations: Building Relationships LG 4 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 you’re responsive to their needs 16 -39

Publicity: The Talking Arm of PR PUBLICITY LG 4 • 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. • Advantages of Publicity: - Free - Reaches people who would not look at an advertisement - More believable than advertising 16 -40

Publicity: The Talking Arm of PR DISADVANTAGES of PUBLICITY LG 4 • No control over whether the media will use a story or when they may release it. • It can be good or bad. • Once a story has been run, it isn’t likely to run again. 16 -41

Sales Promotion: Giving Buyers Incentives SALES PROMOTIONS LG 5 • Sales Promotion -- The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities. • Categories of Sales Promotions: 1. B 2 B Sales Promotions 2. Consumer Sales Promotions 16 -42

Sales Promotion: Giving Buyers Incentives LG 5 SOME KEY CONSUMER PROMOTIONS • Coupons • Demonstrations • Sampling • Sweepstakes • In-store Displays • Contests 16 -43

Sales Promotion: Giving Buyers Incentives CLIP THESE LG 5 Most Visited U. S. Coupon Clearing Sites • Coupons, Inc • Ever. Save • Retail. Me. Not • Coupon. Cabin 16 -44

Progress Assessment PROGRESS ASSESSMENT • What are three steps in setting up a public relations program? • What are the sales promotion techniques used to reach consumers? • What sales promotion techniques are used to reach businesses? 16 -45

Word of Mouth and Other Promotional Tools LG 6 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 -46

Viral Marketing LG 6 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 -47

Blogging, Podcasting and E-mail Promotions LG 6 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. • Email promotions increase brand awareness among commercial suppliers. 16 -48

Mobile Media MOBILE MEDIA LG 6 • Marketers make use of cell phones to text customers about product offers and other company information. 16 -49

Promotional Strategies LG 6 PUSH, PULL, AND PICK 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. • Pick Economy -- Refers to consumers who pick out their products from online outlets. 16 -50

Progress Assessment PROGRESS ASSESSMENT • What’s viral marketing? • What are blogging and podcasting? • Describe a push strategy, a pull strategy and the pick economy. 16 -51