Promotion Mix by Suwattana Sawatasuk Promotion Mix or

Promotion Mix by Suwattana Sawatasuk

Promotion Mix (or Marketing Communication Mix) � The specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships

Promotion Tools � Advertising � Sales promotion � Personal selling � Public relations � Direct marketing

Promotion Tools � Advertising: any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor i. e. broadcast, print, Internet, outdoor, and etc. � Sales promotion � Personal selling � Public relations � Direct marketing

Promotion Tools � Advertising � Sales promotion: short-term incentives to encourage the purchase or sale of a product or service for a specific period of time i. e. discounts, coupons, displays, demonstrations, and etc. � Personal selling � Public relations � Direct marketing

Discount and Allowances in Pricing Strategy VS. Sales Promotion � Discount and allowances in Pricing Strategy: offering to customer without specified time period � Discount in Sales Promotion: offering to customer with condition and time frame to stimulate a short-term sales volume and more consumer demand in the short run

Promotion Tools � Advertising � Sales promotion � Personal selling: personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships i. e. sales presentations, trade shows, and etc. � Public relations � Direct marketing

Promotion Tools � Advertising � Sales promotion � Personal selling � Public relations: building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events i. e. press releases, sponsorships, special events, Web pages, and etc. � Direct marketing

Promotion Tools � Advertising � Sales promotion � Personal selling � Public relations � Direct marketing: direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships i. e. catalogs, telephone marketing, the Internet, mobile, and etc.

Objectives of Promotion 1. To communicate to the target group a. To inform: provide information about product/service or company to target groups such as marketing intermediaries, public, and consumer b. To persuade: use the verbal/nonverbal communication in encouraging consumer buying decision c. To remind: build brand awareness by using logo, branding, or feature of product/service or company to increase consumers' knowledge of a brand's existence

Objectives of Promotion (con’t) 2. To change consumer demand 3. To correspondent with other marketing mixs ◦ If the product is in the introduction stage of Product Life Cycle � Promotion mix need to communicate to its target group in term of giving information than brand reminder. Sales promotion, such giveaway or discount, may be needed to stimulate the trade channel, retailer or wholesaler, to buy more products.

To inform, persuade, or remind?

Integrated marketing communications (IMC)

Integrated Marketing Communications (IMC) � The carefully integrating and coordinating the company’s many communications channels to deliver a clear, consistent, and compelling message about the organization and its products

IMC: carefully blended mix of promotion tools Personal selling Advertising Sales promotion Consistent, clear, and compelling company and brand messages Direct marketing Public relations

IMC for Dutch Mill Group Event Advertising PR news

What could be the problem for communication without IMC?

Communication without IMC? � As each communication (advertising, personal selling, PR, direct marketing, sales promotion) often come from different parts of the company, if the company fails to integrate those various communication channels, it will result in blurred customer brand perceptions.

Communication Process

Elements in the Communication Process Sender Encoding Message Decoding Media Noise Feedback Response Receiver

9 Elements of Communications 1 Sender The party sending the message to another party 2 Receiver The party receiving the message sent by another party

9 Elements of Communications 3 Sender Message Receiver Media The set of symbols that the sender transmits 4 The communication channels through which the message moves from sender to receiver

9 Elements of Communications 5 Sender Encoding 6 Message Decoding Receiver Media The process of putting thought into symbolic form The process by which the receiver assigns meaning to the symbols encoded by the sender

9 Elements of Communications Sender Encoding Message Decoding Receiver Media The reactions of the receiver The part of the after being exposed to the message receiver’s response communicated back to the sender Feedback Response 8 7

9 Elements of Communications Sender Message Encoding Decoding Receiver Media 9 Feedback Noise The unplanned static or distortion during the communication process, which results Respons in the receiver’s getting e a different message than the one the sender sent

Steps in Developing Effective Marketing Communication

Steps in Developing Effective Marketing Communication 1. 2. 3. 4. 5. 6. Identifying the target audience Determining the communication objectives Designing a message Choosing media Selecting the message source Collecting feedback

1. Identifying the target audience � Who will be your target audience? ◦ Current users or potential buyers? ◦ Those who make the buying decision or those who influence it?

2. Determining the Communication Objectives � What response marketers seek? ◦ Need to know where the target audience now stands and to what stage it needs to be moved. ◦ 6 Buyer-readiness stages �The stages that consumers normally pass through on their way to purchase, including awareness, knowledge, liking, preference, conviction, and purchase Awareness Knowledge Liking Preference Conviction Info. about product Feeling favorable about product Preferring this brand to other brands Confidence in this brand, it is the best Purchase

3. Designing a Message should get Attention, hold Interest, arouse Desire, and obtain Action (AIDA model) � Must decide what to say (message content) and how to say (message structure and format) � Message

4. Choosing Media � Personal Communication Channels: Channels through which two or more people communicate directly with each other, including face to face, on the phone, through mail or e-mail, or even through an Internet “chat” ◦ Word-of-mouth influence: personal commu. about a product between target buyers and neighbors, friends, family members, and associates. ◦ Buzz marketing: cultivating opinion leaders and getting them to spread info. about a product or service to others in their communities. � Nonpersonal Communication Channels: Media that carry messages without personal contact or feedback, including major media, atmospheres, and events

Selecting the Message Source � Messages delivered by highly credible sources are more persuasive for target audiences. � Picking the wrong spokesperson can result in embarrassment and tarnished image. “Celebrity endorsement”

Collecting Feedback � After sending the message, the communicator mush research its effect on the target audience. � Feedback on marketing communications may suggest changes in the promotion program or in the product offer itself.

Setting the Total Promotion Budget and Mix

Setting the Total Promotion Budget � Affordable method � Percentage-of-Sales method � Competitive-Parity method � Objective-and-Task method ◦ Setting the promotion budget at the level management thinks the company can afford ◦ Setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price ◦ Setting the promotion budget to match competitors’ outlay ◦ Developing the promotion budget by: � Defining specific objectives � Determining the tasks that must be performed to achieve these objectives � Estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget

Push vs. Pull Promotion Strategy � Push strategy: a promotion strategy that calls for using the sales force and trade promotion to push the product through channels. producer promotes the product to channel members who in turn promote it to final consumers to create consumer demand for a product. � The

Big. C catalog

Push vs. Pull Promotion Strategy � Pull strategy: a promotion strategy that calls for spending a lot on advertising and consumer promotion to induce final consumers to buy the product, creating a demand vacuum that “pulls” the product through the channel � If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers.

Push vs. Pull Promotion Strategy Producer marketing activities PUSH (personal selling, trade promotion, other) Producer PULL Retailers and wholesalers Reseller marketing activities PUSH Consumers (personal selling, advertising, sales promotion, other) Retailers and wholesalers PULL Producer marketing activities (Consumer advertising, sales promotion, other) Consumers

Summary: Push vs. Pull Strategy � Push strategy involves convincing trade intermediary channel members to "push" the product through the distribution channels to the ultimate consumer via promotions and personal selling efforts. � Pull strategy attempts to get consumers to "pull" the product from the manufacturer through the marketing channel.

Product Life Cycle Stages and Promotion Tools � � Introduction: Ad and PR are good for producing high awareness. Sales promotion is useful in promoting early trial. Personal selling must be used to get trade to carry the product. Growth: Ad and PR continue to be powerful influences. Sales promotion can be reduced because fewer incentives are needed. Mature: Sales promotion becomes important relative to ad. buyers know the brand, and ad is needed only to remind them of product. Decline: Ad is kept at a reminder level, PR is dropped. Salespeople give the product only a little attention. Sales promotions might continue to be strong.