Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication...

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Chapter 13 Promotion – Introduction to Integrated Marketing Communicatio n McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Transcript of Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication...

Page 1: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Chapter 13Promotion – Introduction to Integrated Marketing Communication

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Page 2: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

At the end of this presentation, you should be able to:

1. Know the advantages and disadvantages of the promotion methods a marketing manager can use in strategy planning.

2. Understand the integrated marketing communications concept and why most firms use a blend of different promotion methods.

3. Understand the importance of promotion objectives.

4. Know how the communication process affects promotion planning.

5. Know how direct-response promotion is helping marketers develop more targeted promotion blends.

13–2

Page 3: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

At the end of this presentation, you should be able to:

6. Understand how customer-initiated interactive communication is different.

7. Know how typical promotion plans are blended to get an extra push from wholesalers and retailers and help from customers in pulling products through the channel.

8. Understand how promotion blends typically vary over the adoption curve and product life cycle.

9. Understand how to determine how much to spend on promotion efforts.

10. Understand important new terms.

13–3

Page 4: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Marketing Strategy Planning Process

13–4

Page 5: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Promotion and Marketing Strategy Planning (Exhibit 13-1)

CH 14: Personal Selling and

Customer Service

CH 13: Promotion Intro. to Integrated

Marketing Communications

Promotion methods

Managing promotion

Effective communication

Blending promotion

CH 15: Advertising & Sales Promotion

13–5

Page 6: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Several Promotion Methods Are Available

Mass SellingMass Selling

Personal SellingPersonal Selling

Sales PromotionSales Promotion

Different methods of promotion Advertising Publicity

13–6

Page 7: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Sales Promotion Tries to Spark Immediate Interest (Exhibit 13-2)

• Contests• Coupons• Aisle displays• Samples• Trade shows• Point-of-purchase

materials• Banners & streamers• Frequent buyer

programs• Sponsored events

• Contests• Coupons• Aisle displays• Samples• Trade shows• Point-of-purchase

materials• Banners & streamers• Frequent buyer

programs• Sponsored events

• Price deals• Promotion allowances• Sales constests• Calendars & gifts• Trade shows• Meetings• Catalogs• Merchandising aids• Videos

• Price deals• Promotion allowances• Sales constests• Calendars & gifts• Trade shows• Meetings• Catalogs• Merchandising aids• Videos

Aimed at wholesalers or retailers

Aimed at wholesalers or retailers

• Contests & Bonuses• Meetings• Portfolios & Displays• Sales aids • Training materials

• Contests & Bonuses• Meetings• Portfolios & Displays• Sales aids • Training materials

Aimed at company’s own sales force

Aimed at company’s own sales force

Aimed at consumers or users

Aimed at consumers or users

13–7

Page 8: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Someone Must Plan, Integrate, and Manage the Promotion Blend

Sales Promotion Managers

Sales Promotion Managers

Advertising Managers

Advertising ManagersSales ManagersSales Managers

Marketing ManagersMarketing Managers

IntegratedMarketing

Communications

13–8

Page 9: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Which Method to Use Depends on Promotion Objectives

PersuadingPersuading

InformingInforming

RemindingReminding

13–9

Page 10: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Reminding May Be Enough

13–10

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Promotion Objectives Relate to the Adoption Process and AIDA Mode (Exhibit 13-3)

Promotion Objectives

Adoption Process

AIDA Model

InformingAwareness

Interest

Attention

Interest

PersuadingEvaluation

TrialDesire

RemindingDecision

ConfirmationAction

{}}

13–11

Page 12: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Interactive Exercise: AIDA

13–12

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The Traditional Communication Process (Exhibit 13-4)

NoiseNoise

SourceSource

ReceiverReceiver

EncodingEncoding

Message channel

Message channel

FeedbackFeedback

13–13

Page 14: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Encoding & Decoding Depend on a Common Frame of Reference (Exhibit 13-5)

EncoderEncoder

DecoderDecoder

Commonframe of

reference

13–14

Page 15: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Checking Your Knowledge

Ron Popeil has been a pioneer in the use of direct-response television “infomercials.” Over the years his infomercials have promoted many products, including the Showtime Rotisserie Barbecue, a food dehydrating machine, and the world-famous “Veg-O-Matic.” The chief advantage of the infomercial is that it provides plenty of time to describe and demonstrate a product’s benefits in detail. The choice of the infomercial is related mainly to the _________ element of the communication process.

A. message channelB. encodingC. decodingD. feedback E. noise

13–15

Page 16: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Encoding and Decoding

13–16

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Integrated Direct-Response Promotion Is Very Targeted

Target DirectlyWith a DatabaseTarget Directly

With a Database

More Than Direct Mail

More Than Direct Mail

Ethical ConcernsEthical Concerns

13–17

Page 18: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

A Model of Customer-Initiated Interactive Communication (Exhibit 13-6)

NoiseNoiseSource’s message

Source’s message

Message channel

Message channel

SearchSearch

Select a topic

Select a topic

Receiver (customer)

Receiver (customer)

13–18

Page 19: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Pushing in the Channel Focuses Promotion at Intermediaries (Exhibit 13-7)

13–19

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Other Promotional Elements of Pushing

13–20

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Pulling in the Channel Directs Promotion at Customers (Exhibit 13-7)

13–21

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An Example of Pulling

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Checking Your Knowledge

Fido, Inc. is a producer of dog food and is getting ready to introduce a new brand. The firm’s marketing research department learns that a competitor is planning to launch another brand about two weeks after Fido’s launch. Fido’s marketing department quickly mails a set of dated coupons to several thousand consumers in a purchased database of dog owners, encouraging them to ask for the new Fido brand in their favorite store and to stock up on the new brand using the coupons. This is an example of:

A. pulling.B. noise.C. pushing.D. encoding.E. decoding. 13–23

Page 24: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Adoption Processes Can Guide Promotion Planning (Exhibit 13-8)

13–24

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Appeal for Innovators

13–25

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Stimulating Adoption of an Image

13–26

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Promotion Varies Over the Life Cycle

“This new idea is good”

“Our brand is best”

“Our brand is better, really”

“Let’s tell those who

still want our product” 13–27

Page 28: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Nature of Competition Requires Different Promotion

13–28

Page 29: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Setting the Promotion Budget

Percentage of SalesPercentage of Sales

Task MethodTask Method

13–29

Page 30: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

You should now be able to:

1. Know the advantages and disadvantages of the promotion methods a marketing manager can use in strategy planning.

2. Understand the integrated marketing communications concept and why most firms use a blend of different promotion methods.

3. Understand the importance of promotion objectives.

4. Know how the communication process affects promotion planning.

5. Know how direct-response promotion is helping marketers develop more targeted promotion blends.

13–30

Page 31: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

You should now be able to:

6. Understand how customer-initiated interactive communication is different.

7. Know how typical promotion plans are blended to get an extra push from wholesalers and retailers and help from customers in pulling products through the channel.

8. Understand how promotion blends typically vary over the adoption curve and product life cycle.

9. Understand how to determine how much to spend on promotion efforts.

10. Understand important new terms.

13–31

Page 32: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Key Terms

Promotion

Personal selling

Mass selling

Advertising

Publicity

Sales promotion

Sales managers

Advertising managers

Public relations

Sales promotion managers

Integrated marketing communications

AIDA model

Communication process

Source

Receiver

Noise

Encoding

Decoding

Message channel

Pushing13–32

Page 33: Essentials of Marketing Chapter 13 Promotion – Introduction to Integrated Marketing Communication McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill.

Key Terms

Pulling

Adoption curve

Innovators

Early adopters

Early majority

Late majority

Laggards

Nonadopters

Primary demand

Selective demand

Task method 13–33