Marketing Communications PROMOTIONAL MIX chapter 4 01 1

Marketing Communications & PROMOTIONAL MIX chapter 4. 01 1

10 Year Old Statistics 1 u U. S. advertising spending exceeds $215 billion per year u Industry employs only 272, 000 u Ad budgets of some firms exceed over $2 billion per year Chapter Version 3 e © 2003 South-Western 2

Advertising and Market Share 1 u New brands spend proportionately more for advertising than old ones. u A certain level of exposure is needed to affect purchase habits. u Beyond a certain level, diminishing returns set in. Chapter Version 3 e © 2003 South-Western 3

Advertising and the Consumer 1 u Average U. S. citizen is exposed to hundreds of ads each day. u Advertising may change a consumer’s attitude toward a product. u Advertising can affect consumer ranking of brand attributes. Chapter Version 3 e © 2003 South-Western 4

Promotional Mix Chapter Version 3 e © 2003 South-Western 5

What is promotion? u. Any form of communication a business or organization uses to inform, persuade, or remind people about its products. Chapter Version 3 e © 2003 South-Western 6

The Promotional Mix is a combination of the different types of promotion. Chapter Version 3 e © 2003 South-Western 7

Elements of the Promotion Mix Advertising Ingredients of the Promotion Mix Public Relations Personal Selling Sales Promotion Chapter Version 3 e © 2003 South-Western 8

What is promotion? u. There are two forms of promotion – Product – Institutional u. It is important to our economy u. Billions of dollars are spent on promotion and promotion activities provide millions of people with jobs. Chapter Version 3 e © 2003 South-Western 9

Major Types of Advertising Corporate Image Institutional Advertising Advocacy Advertising Types of Advertising Pioneering Product Advertising Competitive Comparative Chapter Version 3 e © 2003 South-Western 10

2 Major Types of Advertising Institutional Advertising Designed to enhance a company’s image rather than promote a particular product. Product Advertising Designed to tout the benefits of a specific good or service. Chapter Version 3 e © 2003 South-Western 11

2 Major Types of Advertising Institutional Advertising Enhance corporation’s identify Advocacy advertising Pioneering Product Advertising Competitive Comparative Chapter Version 3 e © 2003 South-Western 12

2 Product Advertising Pioneering Competitive Comparative Chapter Version 3 e • Stimulates primary demand for new product or category • Influence demand for brand in the growth phase of the PLC. • Often uses emotional appeal. • Compares two or more competing brands’ product attributes. • Used if growth is sluggish, or if competition is strong. © 2003 South-Western 13

The Role of Promotion u Promotion- any form of communication a business or organization uses to inform, persuade, or remind people about its products and improve its public images. u Product promotion - used to convince potential customers to buy products from it instead of from a competitor. – – – Chapter Explains major features and benefits of its products Tells where those products are sold Advertises sales on those products Answers customer questions Introduces new products Version 3 e © 2003 South-Western 14

The Role of Promotion u Institutional Promotion- used to create a favorable image for itself. Does not directly sell a certain product. However, may ultimately result in increased sales of a company’s products. Chapter Version 3 e © 2003 South-Western 15

Types of Promotion u. Advertising u. Publicity u. Sales Promotion u. Personal Selling Chapter Version 3 e © 2003 South-Western 16

Advertising u. It is paid for. u. One set format to carry a message, rather than a personal, one-on-one message. u. Identifies the sponsor of the message. Chapter Version 3 e © 2003 South-Western 17

Advertising…. u. Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. Chapter Version 3 e © 2003 South-Western e s i t r e Adv ! e r e h 18

Publicity u. Builds a business’ image. u. Publicity is free. u. Not much control over the message being sent to the public. Chapter Version 3 e © 2003 South-Western 19

Publicity u A specific kind of public relations that involves placing positive and newsworthy information about a business, its products, or its policies in the media is called…. . Chapter Version 3 e © 2003 South-Western 20

Publicity u. Advantage… – It is free! u. Disadvantage…. . – Its contents cannot be controlled by the business Chapter Version 3 e © 2003 South-Western 21

Principal function of publicity… u. Building an image Chapter Version 3 e © 2003 South-Western 22

Public Relations u. Any activity designed to create a favorable image toward a business, its products or its policies. Chapter Version 3 e © 2003 South-Western 23

Sales Promotion u. Usually involves short term activities. u. Offers some type of incentive to make a purchase. u. Can be successfully used in all channels of distribution. Chapter Version 3 e © 2003 South-Western 24

Sales Promotion u. All marketing activities, other than personal selling, advertising, and public relations is called…. Chapter Version 3 e © 2003 South-Western 25

Sales Promotion (con’t) Types of Promotions u. Trade Promotions u. Consumer Sales Promotions – Slotting Allowances – Buying Allowances – Trade Shows and Conventions – Sales Incentives Chapter Version 3 e – Licensing – Promotional Tie-Ins – Visual Merchandising and Displays – Premiums & Incentives – Product Samples © 2003 South-Western 26

Personal Selling u. The responsibility of sales personnel. – Order - taking personnel – Order - getting personnel u. The most flexible and individualized type of promotion available. Chapter Version 3 e © 2003 South-Western 27

What is the largest form of promotion? u. Personal Selling! – This type of promotion requires contact with potential buyers Chapter Version 3 e © 2003 South-Western 28

What do they do? u. Advertising – Creates awareness of a business’s product u. Public Relations – Creates a favorable image for the business itself u. Sales Promotion – Efforts stimulate sales u. Personal Selling – Builds on all of the other efforts by helping Chapter customers Version 3 e © 2003 South-Western complete the sale 29

404 Learning Objective 1 Discuss the role of promotion in the marketing mix. Promotion Chapter Version 3 e Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response and then 30 reassures.

404 Learning Objective 1 Discuss the role of promotion in the marketing mix. Promotional Strategy A plan for the optimal use of the elements of promotion: 1. Advertising 2. Public Relations 3. Personal Selling Chapter Version 3 e 4. Sales Promotion 31

The Role of Promotion 404 Learning Objective 1 Discuss the role of promotion in the marketing mix. Overall Marketing Objectives • • Marketing Mix Product Place Promotion Plan Price Target Market Chapter Version 3 e Promotional Mix • Advertising • Public Relations • Personal Selling • Sales Promotion To convince target customers that the goods/services offer a DIFFERENTIAL ADVANTAGE over 32 competitors

404 Learning Objective 1 Discuss the role of promotion in the marketing mix. Create Awareness Making People Aware: IPOD Build Positive Images Mercedes Benz Goals of Market Communications Identify Prospects Fair Giveaways Build Channel Relationships Cooperative Advertising Chapter Version 3 e Retain Customers Frequent Flyer Programs 33

404 Learning Objective 1 Discuss the role of promotion in the marketing mix. High Product Quality Cadillac Features That Provide Differential Advantage Rapid Delivery John Deere Overnight Parts Low Prices Walmart Everyday Low Prices Excellent Service “We will pick you up” Chapter Version 3 e Unique Features Hybrid Cars 34

405 Learning Objective 2 Personal Selling Discuss the elements of the promotional mix. Promotional Mix Advertising Public Relations Sales Promotion Chapter Version 3 e Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals. 35

405 Learning Objective 2 1. Personal Selling Discuss the elements of the promotional mix. Two people communicate in order to influence each other Traditional Selling Relationship Selling Planned presentation to one or more prospective buyers to make a sale. Accomplishment of mutual objectives. CONSUMER PRD CARS: QUICK SALE Chapter Version 3 e WIN - LOSE BUSINESS PRD COMPUTERS: LONG REL 36 WIN - WIN

479 Learning Objective PART 2 8 Describe Advantages of Personal Selling Provides a detailed explanation or demonstration of product u Message can be varied to fit the needs of each prospective customer u Can be directed to specific qualified prospects u Costs can be controlled by adjusting sales force size u Most effective in obtaining sales and gaining satisfied customers Chapter Version 3 e © 2003 South-Western 37

Advertising Versus Personal Selling is more important if. . . The product has a high value. It is a custom-made product. There are few customers. The product is technically complex. Customers are geographically concentrated. Advertising/Sales Promotion is more important if. . . The product has a low value. It is a standardized product. There are many customers. The product is simple to understand. Customers are geographically dispersed. Chapter Version 3 e © 2003 South-Western 38

Advantages of Personal Selling Detailed Information Message Control Targeted Cost Control Closing Sales Chapter Version 3 e © 2003 South-Western 39

405 Learning Objective Discuss the elements of the promotional mix. 2 2. Advertising Impersonal, one-way mass communication. . . about a product, service or organization that is Chapter Version 3 e paid for by a marketer. 40

406 Learning Objective 2 Discuss the elements of the promotional mix. Advertising Media Traditional Advertising Media u Television u Radio u Newspapers u Magazines u Books u Direct mail u Billboards u Transit cards Chapter Version 3 e Electronic Advertising Media u Internet u Computer modems u Fax machines 41

406 Learning Objective 2 Discuss the elements of the promotional mix. Advertising Advantages u. Ability to reach large number of people Disadvantages Total cost is high u Cost per contact is low u. Can be. Version micro-targeted Chapter 3 e 42

Four Types of Promotion u 1. Advertising - any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. u Six Advantages of Advertising – 1. A large number of people usually see the advertiser’s message – 2. Costs per potential customer are usually lower than other forms of promotion – 3. Can choose the most appropriate media to reach target mkt – 4. Can control the content of an advertisement – 5. Ads are subject to repeat viewing – Ads can “presale” products Chapter Version 3 e © 2003 South-Western 43

Four Types of Promotion u Four Disadvantages of Advertising – 1. Cannot focus well on individual needs – 2. Some forms of advertising can be too expensive for many businesses – 3. Sometimes advertising is wasteful and inefficient message may be spent on non-potential customers – 4. Advertising must be brief Chapter Version 3 e © 2003 South-Western 44

406 Learning Objective 3. Public Relations Chapter Version 3 e 2 Discuss the elements of the promotional mix. The marketing function that evaluates public attitudes, identifies areas within the organization that the public may be interested in, and executes a program of action to earn public understanding and 45 acceptance.

Four Types of Promotion u 2. Publicity - placing newsworthy information about a company, product, or person in the media. Can be used to promote particular events and promote particular products. The main purpose of publicity is to build an image. Image - the way a business or organization is defined in people’s minds. Chapter Version 3 e © 2003 South-Western 46

Four Types of Promotion u Advantages of Publicity – Publicity is free; advertising is not – Can be used to create a positive image within the community – Viewed as being more credible or believable than advertising – Viewed as news, people more attention to publicity u Disadvantages of Publicity – Give up much of your control of your message – Not all publicity is positive – Lack of control by the business - bad stories can get printed Chapter Version 3 e © 2003 South-Western 47

407 Learning Objective 2 Discuss the elements of the promotional mix. Functions of Public Relations Executes programs to “win” public Evaluates public attitudes Ecology Identifies areas of public interest Curbside Programs Recycling Publicity: Public information (good or bad ) about a company, good, or service appearing Chapter Version 3 e in the mass media as a unpaid news item. 48

Publicity and Public Relations u Public Relations - any activity designed to create goodwill toward a business. u Benefits of PR – – – Increasing sales Increasing firm’s good reputation Increasing customers reception of advertising messages Spreading accurate information to the public Conditioning customers to expect quality products from the company – Reducing the impact of problems – Helping to obtain better treatment from government Chapter Version 3 e © 2003 South-Western 49

Audiences for PR u Internal Audiences - groups within the organization u Employee Relations - goal is to keep your employees happy by using: – – Chapter Tuition reimbursement Newsletters Health and wellness programs Opportunities for communications Version 3 e © 2003 South-Western 50

Audiences for PR u External Audiences - groups outside the organization u Customers - Satisfied customers = repeat business. Ways to keep customers happy include: – Provide special services and amenities such as giftwrapping, check cashing, free delivery, free parking, etc. – Advisory boards - panels of consumers that make suggestions about products and businesses – Customer newsletters, annual reports – Customer events - seminars, lunches, entertainment Chapter Version 3 e © 2003 South-Western 51

Audiences for PR u Community - company sponsors activities that benefit the civic, social, and cultural life of the community. Activities can include: – School partnerships - HP donating computers to the high school – Sponsorship of community events – Scholarships Chapter Version 3 e © 2003 South-Western 52

Public Relations u News Release - a pre-written story about the company that is sent to various media for publication. It usually contains information about the company’s employees, stores, operations, products, corporate philosophy, or participation in an event or program. Can contain hard or soft news. – Hard News - information that should be announced right away because the public will want to know about it immediately – Soft News - information that does not need to be announced immediately because it will be of as much interest to the public later as it is now Chapter Version 3 e © 2003 South-Western 53

Purposes of News Releases u To introduce new products u To keep the business in the public eye u To position the business’s image u To support good employee relations u To create good community relations Chapter Version 3 e © 2003 South-Western 54

Getting Your News Release in the Media u u u Include a captioned photograph with the release Meet media deadlines Write an appropriate number of releases Direct the release to a specific person Advise the staff that you have sent out a release Reread the release after setting it aside Keep a copy of every release Send a cover letter with the release Send a thank-you note after the release is used Avoid pressuring the editor Avoid mentioning publicity or advertising Avoid playing favorites Chapter Version 3 e © 2003 South-Western 55

Public Relations u Press Kit - a folder containing articles, news releases, feature stories, and photographs about a company, product, or person. Press kits are given to the media to assist them in reporting on the intended news item. u Press Conference - a meeting in which media members are invited by the business or organization to hear an announcement about a newsworthy event. Chapter Version 3 e © 2003 South-Western 56

The Tools of Public Relations New Product Publicity Product Placement Major Tools Used By PR Professionals Customer Satisfaction Phone Lines Consumer Education Event Sponsorship Issue Sponsorship Chapter Version 3 e © 2003 South-Western Web Sites 57

407 Learning Objective 2 Discuss the elements of the promotional mix. 4. Sales Promotion Marketing activities--other than personal selling, advertising, and public relations--that stimulate consumer buying and dealer effectiveness. Sales Promotion Targets End Consumers Chapter Version 3 e Trade Customers Company Employees 58

407 Learning Objective Discuss the elements of the promotional mix. 2 SOAP IN MAIL A. Free samples B. Contests “WHY YOU LIKE. . . ” C. Premiums BEANIE BABIES D. Trade Shows Popular Tools for Consumer Sales Promotion Chapter Version 3 e CHIPS IN STORE HORT: CENT E. Vacation Giveaways F. Coupons OUT OF STORE © 2003 South-Western 59 IN STORE

Four Types of Promotion u 3. Sales Promotion - All marketing activities, other than personal selling, advertising, and publicity, that are used to stimulate consumer purchasing and sales effectiveness. u Objectives of Sales Promotion – Increase sales – Inform customers about new products – Create a positive store or corporate image u 3 Characteristics – Short term activities – Offers some type of incentive – Can be successfully used in all channels of distribution Chapter Version 3 e © 2003 South-Western 60

Four Types of Promotion u Sales promotion can be either consumer or trade oriented u Trade Promotions - sales promotion activities designed to gain manufacturers’, wholesalers’, and retailers’ support for a product. More money is spent on promoting to businesses than to consumers. – 1. Slotting allowances - a cash premium paid by the manufacture to a retail chain for the costs involved in placing a new product on its shelves. – 2. Buying allowances - special price discount given by manufacturers to wholesalers and retailers to encourage them to either buy a product or buy a larger quantity. – 3. Trade Shows and Conventions - designed to reach wholesalers – 4. Sales incentives - awards given managers and employees who successfully meet or exceed their company’s set sales quota. Chapter Version 3 e © 2003 South-Western 61

Four Types of Promotion u Consumer Sales Promotions - designed to encourage customers to buy a product. – 1. Licensing - Organizations, such as manufactures, movie makers, sports teams, and celebrities, may license for a fee their logo, trademark, trade characters, names and likenesses, or personal endorsements to a business to be used in promoting the business’s products. – 2. Promotional tie-ins - involve sales promotional arrangements between one or more retailers or manufacturers. They combine their resources (advertising and sales promotional activities) to do a promotion that creates additional sales for each partner. Chapter Version 3 e © 2003 South-Western 62

Four Types of Promotion – 3. Visual Merchandising and Displays – Visual Merchandising - the coordination of all physical elements in a place of business so that it projects the right image to its customers – Displays - visual and artistic aspects of presenting a product to a target group of customers. Chapter Version 3 e © 2003 South-Western 63

Four Types of Promotion – 4. Premium and Incentives - most popular and frequently used sales promotion type – Premiums - low cost items given away free to consumers as a condition of purchase. • • Coupons - certificates given to customers entitling cash discounts Factory Packs (in-packs)- free gifts placed in product packages Traffic Builders - low cost premiums like key chains, pens Coupon Plans - ongoing programs in exchange for labels, coupons, or other tokens from one or more purchases – Incentives - higher-priced products given in contests or sweepstakes – 5. Product Samples - free trial size of a product that is sent through the mail, distributed door-to-door, or through retail stores and trade shows Chapter Version 3 e © 2003 South-Western 64

Four Types of Promotion u Advantages of Sales Promotions – Unique and has special appeal to a potential customer – Helps build customer loyalty u Disadvantages of Sales Promotions – Difficult to end without the customers becoming dissatisfied – Store image and sales can suffer if the promotion is not properly planned and managed – Only designed to supplement other promotional efforts and cannot make up for poor products Chapter Version 3 e © 2003 South-Western 65

The Concept of the Promotional Mix u. Important to achieve promotional goals. u. Decide on the promotional mix that will be most effective in persuading customer or other businesses to purchase and support the businesses products. Chapter Version 3 e © 2003 South-Western 66

PROMOTIONAL MIX u Promotional Mix - a combination of different types of promotion. A business decides on a promotional mix that will be most effective in persuading customers or other businesses to purchase and support the business’s products. Chapter Version 3 e © 2003 South-Western 67

Tools for Consumer Sales Promotion Coupons Premiums Six Categories of Consumer Sales Promotions Frequent Buyer Programs Contests and Sweepstakes Samples Chapter Version 3 e © 2003 South-Western Point-of-Purchase Displays 68

Promotional Mix u. Factors affecting the selection of a promotional mix – Good, Service, or Idea • Type of product • Product nature • Stage of life cycle – Product’s market • Type of consumer • Number of Consumers • Geographical location Chapter Version 3 e © 2003 South-Western 69

Promotional Mix – Distribution System – Product’s Company • Historical perspective • Available funds • Size of sales force – Competition Chapter Version 3 e © 2003 South-Western 70

408 Learning Objective 3 Discuss concept of integrated marketing communications. Integrated Marketing Communications A method of carefully coordinating all promotional activities to produce a consistent, unified message that is customer focused. Chapter Version 3 e NEW MOVIE – NEW TOY AT Mc. Donalds 71

428 Learning Objective 3 Discuss concept of integrated marketing communications. IMC Popularity Growth u Proliferation of thousands of media choices u Fragmentation of the mass market u Slash of advertising spending in favor of promotional techniques Chapter Version 3 e 72

409 Learning Objective 4 Describe the communication process. Communication The process by which we exchange or share meanings through a common set of symbols. Interpersonal Communication ONE TO FEW Chapter Version 3 e PERSON TO PERSON Categories of Communication Mass Communication ONE TO MANY 73 IMPERSONAL

410 Learning Objective 4 Describe the communication process. The Communication Process Sender Originator of the message in the communication process. Encoding Conversion of a sender’s ideas & thoughts into a message, usually words or signs. Message Transmission Passage of the message through a communication media Receiver Decoding Interpretation of language and symbols sent through the communication media Chapter Version 3 e Feedback Receiver response to the sender © 2003 South-Western 74

411 Learning Objective 4 Describe The Communication Process Noise Sender Idea Encoding Message Decoding Message Receiver Message Channel Chapter Version 3 e 75

The Communication Process Noise Sender Encoding Channel Decoding Receiver Channel Chapter Version 3 e © 2003 South-Western 76

414 Learning Objective 4 Describe the communication process. Characteristics of Advertising A. Advertising Communication Mode Indirect and non-personal Communication Control Low Feedback Amount Little Feedback Speed Delayed Message Flow Direction One-way Message Content Control Yes Sponsor Identification Yes Reaching Large Audience Fast Chapter Version 3 e Message Flexibility © 2003 South-Western 77 Same message to all audiences

414 Learning Objective 4 Describe the communication process. Characteristics of Public Relations B. Public Relations Communication Mode Usually indirect, non-personal Communication Control Moderate to low Feedback Amount Little Feedback Speed Delayed Message Flow Direction One-way Message Content Control No Sponsor Identification No Reaching Large Audience Chapter Version 3 e Message Flexibility Usually fast © 2003 South-Western Usually no direct control 78

414 Learning Objective 4 Describe the communication process. Characteristics of Sales Promotion Communication Mode Usually Indirect and non-personal Communication Control Feedback Amount Moderate to low Little to moderate Feedback Speed Varies Message Flow Direction Mostly one-way Message Content Control Sponsor Identification Yes Reaching Large Audience Fast Chapter Version 3 e Message Flexibility Yes © 2003 South-Western None: Same message 79

414 Learning Objective 4 Describe the communication process. Characteristics of Personal Selling Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction D. Personal Selling Direct and face-to-face High Much Immediate Two-way Message Content Control Yes Sponsor Identification Yes Reaching Large Audience Chapter Flexibility Version 3 e Message Slow © 2003 South-Western Tailored to prospect 80

415 Learning Objective 5 Explain the goal & tasks of promotion. Goals and Tasks of Promotion INFORMATIVE OBJECTIVE • Increase awareness CELL PHONES • Explain how product works BACK OF PACKAGE • Suggest new uses RICE KRISPIE BARS • Build company image WORLD’S LEADER IN. . . Chapter Version 3 e 81

415 Learning Objective 5 Explain the goal & tasks of promotion. Goals and Tasks of Promotion PERSUASION OBJECTIVE • Encourage brand switching • Change customers’ perception of product attributes • Influence buying decision • Persuade customers to call Chapter Version 3 e SWITCH PHONE CO HUYNDI CARS ? ? ? “ON SALE UNTIL. . ” 82

416 Learning Objective 5 Explain the goal & tasks of promotion. Goals and Tasks of Promotion REMINDER OBJECTIVE • Remind customers that product/service may be needed • Remind customers where to buy product “NORTHERN OHIO BUICK DEALERS • Maintain customer awareness Chapter Version 3 e 83

Learning Objective 5 Explain the goal & tasks of promotion. Goals and Tasks of Promotion REASSURE OBJECTIVE • Reduce Cognitive Dissonance HOUSES CARS BIG BOATS Chapter Version 3 e 84

416 Learning Objective 6 Discuss the AIDA concept and its relationship to the promotional mix. The AIDA Concept Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. Chapter Version 3 e 85

Learning Objective Desire Interest Attention Version 3 e THE AIDA CONCEPT Chapter 6 Discuss the AIDA concept and its relationship to the promotional mix. Action THE AIDA CONCEPT 416 86

AIDA and the Hierarchy of Effects Purchase Conviction Preference Liking Knowledge Awareness Attention Chapter Version 3 e Interest Desire © 2003 South-Western Action 87

417 Learning Objective 6 Discuss the AIDA concept and its relationship to the promotional mix. AIDA and the Promotional Mix Awareness Interest Desire Action Advertising Very effective Somewhat effective Not effective Public Relations Very effective Not effective Sales Promotion Somewhat effective Very effective Personal Somewhat Chapter Version 3 e effective Selling Very © 2003 South-Western effective Somewhat 88 effective

Factors that Affect the Promotion Mix Nature of the Product Stage in the Product Life Cycle Target Market Characteristics Type of Buying Decision Available Funds $$$ Push–and–Pull Strategies Chapter Version 3 e © 2003 South-Western 89

418 Learning Objective 7 Describe the factors that affect the promotional mix. A. Nature of the Product u Product characteristics – Business product vs. consumer product u Costs and risks HIGH COST OF PERSONAL SELLING u Social risk Chapter Version 3 e CLOTHING, JEWELRY 90

Goals and Tasks of Promotion Informing Reminding Target Audience Persuading Chapter Version 3 e © 2003 South-Western 91

414 Learning Objective Explain the goal & tasks of promotion. 5 PLC Stages: 1. Informing Introduction Early Growth 3. Reminding PLC Stages: Target Audience PLC Stages: Growth Maturity 2. Persuading Chapter Version 3 e Maturity PLC Stages: ALL 4. Reassuring 92

419 Learning Objective 7 Describe the factors that affect the promotional mix. Sales ($) B. Product Life Cycle & Promotional Mix Maturity Introduction Growth Decline Time Light Heavy use of Advertising, advertising, pre. PR for introduction awareness; Publicity sales promotion for trial Chapter Version 3 e Advertising, PR, Brand loyalty Personal Selling for distribution Ads decrease. AD/PR Sales decrease Promotion, Limited Personal Sales Selling Promotion, Reminder & Personal Selling © 2003 South-Western Persuasive 93 for distribution

420 Learning Objective 7 Describe the factors that affect the promotional mix. C. Target Market Characteristics FOR: Advertising u Widely scattered market Sales Promotion u Informed buyers Less Personal Selling Chapter Version 3 e u Repeat buyers 94

420 Learning Objective 7 Describe the factors that affect the promotional mix. D. Type of Buying Decision Routine Type of Buying Decision affects Promotional Mix Choice Chapter Version 3 e Advertising Sales Promotion Advertising Not Routine or Complex Public Relations Complex Personal Selling 95

421 Learning Objective 7 Describe the factors that affect the promotional mix. E. Available Funds u Trade-offs with funds available u Number of people in target market u Quality of communication needed u Relative costs of promotional elements Chapter Version 3 e 96

FIGURE 18 -5 A comparison of push and pull promotional strategies Chapter Version 3 e © 2003 South-Western 97 Slide 18 -35

Push Policy u. Promotion policy used only with the next partner in the distribution channel. Manufacturers PUSH a product to the retailers for sale…. Chapter Version 3 e © 2003 South-Western 98

Pull Policy u. Promotion policy designed to create consumer interest When a product is consumer driven or PUSHED into a store…. Chapter Version 3 e © 2003 South-Western 99

421 Learning Objective Describe the factors that affect the promotional mix. 7 F. Push and Pull Strategies PUSH STRATEGY Manufacturer promotes to wholesaler Wholesaler promotes to retailer Retailer promotes to consumer Consumer buys from retailer Orders to manufacturer PULL STRATEGY Manufacturer promotes to consumer Consumer demands product from retailer Retailer demands product from wholesaler Wholesaler demands product from manufacturer Orders to manufacturer Chapter Version 3 e 100

Ethical Aspects of Advertising and Promotion. Mc. Graw-Hill/Irwin© 2004 The Mc. Graw. Hill Companies, Inc. , Chapter 22. 101

Advertising and Ethics § Proponents § Encourages a standard of living improvement § Produces jobs § Promotes competition § Critics § Creates needs and faults § More propaganda than information § Promotes materialism 102

Ethics in Promotion § Ethics: Moral principles and values that govern the actions of and individual or group individual group. . 103

Ethics in Promotion § Not all issues can be regulated § A marketing or promotion action may be legal but not considered ethical § Marketers must make decisions regarding the appropriateness of their actions § Companies are scrutinized for their ethics 104

Social and Ethical Criticisms of Promotion § § § Advertising as untruthful or deceptive Advertising as offensive or in bad taste– Advertising of personal products–Sexual appeals Advertising and Children Social and Cultural Consequences–Making people buy things they don’t need–Encouraging materialism– Stereotyping–Advertisings’ influence on the media 105

Social and Ethical Criticisms of Promotion § Advertising as untruthful or deceptive– § General mistrust of ads –Deliberately untruthful or misleading vs. puffery § Problems often more at local level rather than national 106

Social and Ethical Criticisms of Promotion § Advertising as offensive, in bad taste, or irritating § Advertising of personal products § Sexual appeals § �� Suggestive, demeaning, raunchy 107

Many people found Benetton’s “Death Row” ad campaign offensive 108

Children and Promotion § Children's TV Watching Behavior § Children between ages 2 -11 watch on average 21. 5 hours of TV per week and may see 22, 000 commercials per year § Television is an important source of information for children about products 109

Children and Promotion § Some studies have shown… § Children lack experience and knowledge to evaluate advertising critically § They can not differentiate between commercials and program (fantasy vs. reality) § Children are vulnerable to advertising 110

Children and Promotion § ……while other studies argue that § Children must learn through the consumer socialization process; need to acquire skills to function in the marketplace § Acquired skills have helped teens evaluate ads and recognize persuasion techniques 111

Children and Promotion § From: ADText 112

Stereotyping § Portrayal of women § Gender stereotyping § Portrayal of women as sex objects § Role portrayal of women to reflect changing role in society § § § Blacks and Hispanics Gays Elderly 113

Do You Agree With Leo Burnett? § “It must be said that without advertising we would have a far different nation, and one that would be much the poorer-not merely in material commodities, but in the life of the spirit. ” § These excerpters are from a speech given by Leo Burnett on the American Association or Advertising Agencies’ 50 th anniversary, April 20, 1967 114