Promotional Concepts and Promotional Concepts and StrategiesStrategies

Chapter 17

THE PROMOTIONAL THE PROMOTIONAL MIXMIX

Section 17.1

Promotion in Promotion in MarketingMarketing

Promotion is persuasive communication.

Promotional techniques to enhance their public image and reputation, and to persuade people to value their products.

Goals of promotional activities is AIDAA – first AttractI – then build InterestD – DesireA – finally ask for Action

Promotion in MarketingPromotion in MarketingA business uses product promotion

to convince prospects (potential customers) to select their goods or services instead of a competitors brand.

Promotional activities include: ◦ Explain major features and benefits◦ Identify where it is sold◦ Advertise sales◦ Answer customer questions◦ Introduce new offerings

Promotion in Promotion in MarketingMarketing

Institutional promotion is a promotional method used to create a favorable image for a business, help it advocate change, or take a stand on trade or community issues

Promotional activities include◦Website maintenance

Does not directly sell a certain product

The Promotional MixThe Promotional Mix

Examples of Each Different Type of Promotion

The Promotional MixThe Promotional MixPromotion in Marketing

Companies and nonprofit organizations rely on

promotion.

Types of Promotion in the Types of Promotion in the Promotional MixPromotional Mix

(A combination of 5 basic types of (A combination of 5 basic types of promotion)promotion)Personal selling

AdvertisingDirect marketingSales promotionPublic relations

1. Personal Selling1. Personal SellingGenerate direct

contact with prospects and customers

Examples include: personal meetings, in-home demonstrations, e-mail and telephone correspondence

Most expensive forms of promotion

The Promotional MixThe Promotional MixTypes of Promotion in the Promotional Mix

PersonalSelling

The Promotional Mix

Direct contact

Expensive

2. Advertising2. AdvertisingA form of non-personal

promotionTo promote ideas,

goods, or services in a variety of media outlets

Examples include billboards, business cards, brochures, Internet, magazines, newspapers, phone directories, grocery store receipts, radio, TV, sports arenas, cars and buses, restaurant menus and web sites.

The Promotional MixThe Promotional MixTypes of Promotion in the Promotional Mix

PersonalSelling

Advertising

The Promotional Mix

Direct contact

Expensive

Advertising iseverywhere

3. Direct Marketing3. Direct MarketingA type of promotion that

companies use to address individuals directly and not through a third party medium (such as TV, radio, or the internet)

Direct MarketingDirect MarketingDirect Mail

◦ Sent via standard mail to a home or business

Telemarketing ◦ Customers are called on the phone and

asked directly for goods or servicesE-marketing

◦ Any promotion delivered via the Internet (e-mail, mobile apps, social media, search engine marketing (paid search), web site optimization

Social MediaSocial MediaElectronic media that allows

people with similar interests to participate in a social network◦Facebook◦MySpace◦YouTube◦LinkedIn◦Twitter

Helps businesses reach prospective customers

Direct MarketingDirect MarketingGoals of direct marketing are to

generate sales or leads for sales representatives to pursue

Gives recipients an incentive to respond by visiting a store or Web site, calling a toll-free number, returning a form, or sending an e-mail

Targeted customers receive special offers or incentives, such as money-off coupon

Direct MarketingDirect MarketingAllows businesses to engage in one-

way communicationCongress passed the CAN-SPAM Act

of 2003◦Act requires senders of unsolicited

commercial e-mail to give recipients a way to opt out of e-mails

◦Prohibits the use of deceptive subject lines and headers

◦Requires businesses to provide valid return addresses on e-mails.

The Promotional MixThe Promotional MixTypes of Promotion in the Promotional Mix

PersonalSelling

AdvertisingDirect

Marketing

The Promotional Mix

Direct contact

Expensive

Advertising iseverywhere

Mail

E-marketing

Telemarketing

Social media

4. Sales Promotion4. Sales PromotionAccording to AMA,

sales promotion represents all marketing activities – other than personal selling, advertising and public relations – that are directed at business or retail customers to boost sales.

Objectives are to: Increase sales Inform potential

customers about new products

Create positive business or corporate image

Sales PromotionSales PromotionExamples include

◦ Coupons◦ Money-off Promotions◦ Competitions◦ Product Samples◦ Point-of-Sale Displays

The Promotional MixThe Promotional MixTypes of Promotion in the Promotional Mix

PersonalSelling

AdvertisingDirect

MarketingSales

Promotion

The Promotional Mix

Direct contact

Expensive

Advertising iseverywhere

Mail

E-marketing

Telemarketing

Social media

Coupons

Money-offpromotions

Product samples

Displays

5. Public Relations and 5. Public Relations and PublicityPublicityPR activities enable an organization

to influence a target audiencePR campaigns try to create influence

general opinions and create a favorable image for a person, organization or a company, its products, or its policies

Goal is to encourage media relations with reporters

Public Relations: New Public Relations: New ReleasesReleasesMost important media toolAn announcement that is sent to

the appropriate media outletsPublicity is one tactic that public

relations professionals usePublicity is freeNot controlled by the business

Public Relations: Using Social Public Relations: Using Social MediaMediaBusinesses interact with customersGet feedback on the company and

its products and servicesProvide businesses with a way to

obtain opinions and speak directly with potential and existing customers

Potential to reach prospective customers is tremendous

PublicityPublicityInvolves bringing news or

newsworthy information about an organization to the public’s attention.◦Known as placement

Can be used to make public aware of certain people, specific products or services, efforts by nonprofit agencies, political issue

Publicity is free

The Promotional MixThe Promotional MixTypes of Promotion in the Promotional Mix

PersonalSelling

AdvertisingDirect

MarketingSales

PromotionPublic

Relations (PR)

The Promotional Mix

Direct contact

Expensive

Advertising iseverywhere

Mail

E-marketing

Telemarketing

Social media

Coupons

Money-offpromotions

Product samples

Displays

News releases

Social media

Publicity

The Concept of Promotional The Concept of Promotional MixMixWhat is Promotional Mix?Combination of strategies and

cost-effective allocation of resources

Identify target market to measuring the results

Strategies complement one another

Elements of the mix must be coordinated

The Promotional MixThe Promotional MixTypes of Promotion in the Promotional Mix

Types of Ads

Promotional BudgetPromotional Budget

Roles of marketing dept

Determines promotional mix

Establishes the budget

Allocates resources

Coordinates the campaign

Supervises outside resources

Measures the results

Determining the budget can be difficult

It is the % of sales

The Push-Pull ConceptThe Push-Pull Concept

Push Policy Manufacturer

pushes product to the retailer

Involves personal selling and sales promotion – trade shows

Pull Policy Directs promotion

towards consumers

Create consumer interest and demand

Involves advertising to consumers – premiums & samples

The Promotional MixThe Promotional MixTypes of Promotion in the Promotional Mix

Put the number of users and nonusers in the appropriate spaces on the graphic organizer. Why or why not do you use these sites?

The Promotional MixThe Promotional MixThe Concept of Promotional Mix

Discuss the Six Steps of the

Promotional MixDevelop a

Promotional Mix

TYPES OF TYPES OF PROMOTIONPROMOTION

Section 17.2

Sales Promotion definitionSales Promotion definitionIncentives that

encourage customers to buy products or services

Build brand awareness

Encourage customers to try new products

Increase purchases by current customers

Reward customer loyalty

Types of PromotionTypes of PromotionSales Promotions

Sales promotions are usually supported by

advertising activities that include trade promotions

and consumer promotions.

Trade promotionsTrade promotionsSales promotion activities designed to

get support for a product from manufacturers, wholesalers, and retailers

More money is actually spent on promoting to businesses than to consumers

Good business ethics require that trade promotional payments and awards be offered in uniform manner.

Types of PromotionTypes of PromotionSales Promotions

Trade Promotions

Promotional Allowances

Cooperative Advertising

Slotting Allowances

Sales Force Promotions

Trade Shows and Conventions

Types of Trade PromotionsTypes of Trade Promotions1. 1. Promotional AllowancesPromotional Allowances

Represent cash payments or discounts given by manufacturers to wholesalers or retailers for performing activities to encourage sales

2. Cooperative Advertising2. Cooperative Advertising

Manufacturer supports the retailer by helping to pay for the cost of advertising it product locally

Known as cooperative advertising

3. 3. Slotting AllowancesSlotting AllowancesA cash premium paid by

a manufacturer to a retailer to help the retailer cover the costs of placing the manufacturer’s product on the shelves

Range from a few thousand dollars to several million dollars per product

Also pay retailer’s discount specials, charge for store shelves, penalties for poor sales, store advertising and display costs

4. 4. Sales Force Sales Force PromotionsPromotions

Awards given to dealers and employees who successfully meet or exceed a sales quota

Sales force promotions vary, but can include bonuses or prizes such as merchandise awards or travel awards.

5. 5. Trade Shows and Trade Shows and ConventionsConventions

Showcase a particular line of products

Introduce new products, encourage increased sales of existing products & meet customers and partners in distribution

Consumer PromotionsConsumer Promotions

Sales strategies that encourage customers and prospects to buy a product or service

Consumer promotions support advertising, personal selling and public relations efforts

Types of Consumer Types of Consumer PromotionsPromotions1. 1. CouponsCoupons

Certificates that entitle customers to cash discounts on goods or services

Placed inside product packages or in newspapers / magazines

2. 2. PremiumsPremiums

Low-cost items given to consumers at a discount or for free

Designed to increase sales by building product loyalty & attract new customers

2. Premiums2. PremiumsFundamental concept behind

premium marketing is that people will be more motivated to buy a product when they are offered an added value gift in exchange

Three types of premiums◦Factory Packs◦Traffic Builders◦Coupon Plans

Drawback – customers think premiums are disposable

Types of PromotionTypes of PromotionSales Promotions

Three Different Types of Premiums and Descriptions

2. Premiums2. PremiumsFactory Packs, or in-packs, are free

gifts placed in product packages or as a container premium◦Popular with cereal manufactures

Traffic Builders – low cost premiums such as pens, key chains, pocket calendars, and coffee mugs◦New store or special event

Coupon Plans – ongoing programs offering a variety of premiums in exchange for labels or coupons obtained from a product◦Ex – Send 3 soup labels in to manufacturer

to receive a cookbook

3. 3. DealsDeals

Deals or price packs offer short-term price reductions that are marked directly on the label or package

Deal might “bundle” two-related products together, such as free wing chair with purchase of sofa

4. 4. IncentivesIncentivesAre higher-priced

products, awards, or gift cards that are earned and given away through contests-games of skill; sweepstakes-games of chance; and rebates.

Create customer excitement & increase sales

5. 5. Product SamplesProduct Samples

A free trial size of a product sent through the mail, distributed door-to-door, or given away at retail stores and trade shows

6. 6. SponsorshipSponsorship

Company pays a fee for the right to promote itself and its products or services at or on a set location

Negotiate the right to use logos and names on retail products

7. 7. Promotional Tie-Ins, Promotional Tie-Ins, Cross-Promotion, Cross-Cross-Promotion, Cross-SellingSelling

Cross-promotion and cross-selling campaigns

Activities include sales promotional arrangements between one or more retailers or manufacturers

They product mutually beneficially results

8. 8. Product PlacementProduct PlacementA consumer promotion that

involves using a brand-name product in a movie, television show, sporting event, or even in a commercial for another product

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9. 9. Loyalty Marketing Loyalty Marketing ProgramsProgramsAlso called

frequent buyer programs, reward, or frequent shopper programs reward customers by offering incentives for repeat purchases

Frequent flyer promotions

Customer loyalty means that customers are so satisfied with a brand or retailer that they continue to buy that brand or patronize that retailer

10. 10. Online Loyalty Online Loyalty MarketingMarketing

Online versions of loyalty marketing programs

Internet search engine award points

11. 11. Point-of-purchase Point-of-purchase displaysdisplays

Displays designed primarily by manufacturers to hold and display their products

High traffic area and promote impulse purchases

Kiosks – web based or display screens that customers can use to interact with sales staff

Types of PromotionTypes of PromotionSales Promotions

Examples of Each Type of Consumer Promotion

Types of PromotionTypes of Promotion

Examples of Different Types of Sales Promotions