Elements of the Promotion MixAdvertisingIngredientsof thePromotionMixPublic RelationsPersonal SellingSales Promotion

The Communication ProcessReceiverDecodingChannelEncodingSenderNoiseChannel

Goals and Tasks of PromotionInforming

Reminding

PersuadingTargetAudience

AIDA and the Hierarchy of EffectsAttentionInterestDesireActionAwarenessKnowledgeLikingPreferenceConvictionPurchase

When Elements of Promotion Are Most Useful

AdvertisingPersonalsellingSalespromotionPublicrelations Either not effective or inefficientVery effectiveSomewhat effectiveAwarenessKnowledgeLikingPreferenceConvictionEffectivenessPurchase

Factors that Affect the Promotion MixPushandPull StrategiesNature of the ProductStage in the ProductLife CycleTarget Market CharacteristicsType of Buying DecisionAvailable Funds$ $ $

Creating a Promotion PlanChoose Promotion MixDevelop Promotion BudgetSet Promotion ObjectivesIdentify Target MarketAnalyze the Marketplace

Criteria for Setting Promotion Objectives

Promotion objectives should:be measurable, concretebe based on sound research, with a well-defined target audiencebe realisticreinforce the overall marketing plan and relate to specific marketing objectives

Examples of Promotion ObjectivesObjective: To RemindTo remind consumers that Peter Pan peanut butter is the creamiest peanut butter and is available at their nearest grocery and convenience storesObjective: To Inform (Awareness)To increase the top-of-mind awareness level for Peter Pan peanut butter from 16 percent to 24 percentObjective: To Persuade (Attitudinal)To increase the percentage of parents who feel that Peter Pan peanut butter is the best peanut butter for their children from22 percent to 35 percent

Techniques for Setting Promotion Budgets Arbitrary Allocation

All - You - Can - Afford

Competitive Parity

Percent of Sales

Market Share

Objective and Task

Regulation of PromotionSelf-Regulation

National Advertising Division (NAD)

National Advertising Review Board (NARB)Federal Regulation

Federal Trade Commission (FTC)

Effects of AdvertisingAdvertising SpendingReturn on Advertising ExpendituresIncreasing efficiencyas ad budget becomessufficientDiminishingreturnson additionalspending

Major Types of AdvertisingCorporate ImageAdvocacy AdvertisingTypesofAdvertisingPioneeringCompetitiveComparativeProductAdvertisingInstitutionalAdvertising

Advertising Campaign Decision ProcessDetermine the campaign objectives.Make creative decisions.Make media decisions.Evaluate the campaign.

Common Advertising AppealsProfitHealthLove or RomanceFearAdmirationConvenienceFun and PleasureVanity and EgotismSave money, keep from losing moneyBody-conscious, healthySell cosmetics and perfumesSocial embarrassment, growing old, losing health, powerCelebrity endorsement effectiveFast-food and microwave productsVacations, beer, amusement parksExpensive, conspicuous items

Executional Styles for AdvertisingMood or ImageMusicalDemon-strationScientificReal/AnimatedProductSymbolsFantasyLifestyleSpokes-person/TestimonialSlice-of-LifeHumorousCommonExecutionalStyles

Methods Used to Evaluate Advertising CampaignsPretests

Examples: Consumer jury tests Portfolio or unfinished rough tests Physiological testsPost-testsExamples: Recognition tests Recall tests Attitude measures Audience size measurement

The Tools of Public RelationsMajorToolsUsed ByPRProfessionalsNew Product PublicityProduct PlacementCustomer SatisfactionPhone LinesConsumer EducationEvent SponsorshipIssue SponsorshipWeb Sites

Types of Consumer & Sales Promotion GoalsType of buyerDesired resultsSales promotion examplesLoyal customersReinforce behavior,Loyalty marketing programs,People who buy yourincrease consumption,such as frequent-buyer cardsproduct most or allchange purchase timing or frequent-shopper clubsof the timeBonus packs that give loyalconsumers an incentive to stock up or premiums offeredin return for proofs-of-purchaseCompetitorsBreak loyalty, persuade Sampling to introduce yourcustomersto switch to your brandproducts superior qualitiesPeople who buy acompared to their brandcompetitors productSweepstakes, contests, ormost or all of the timepremiums that create interest in the productBrand switchersPersuade to buy yourAny promotion that lowers thePeople who buy abrand more oftenprice of the product, such asvariety of productscoupons, price-off packages,in the categoryand bonus packsTrade deals that help make theproduct more readily available than competing productsPrice buyersAppeal with low pricesCoupons, price-off packages,People whoor supply added valuerefunds, or trade deals thatconsistently buy thethat makes price lessreduce the price of brand toleast expensive brandimportantmatch that of the brand thatwould have been purchased

Source: From Sales Promotion Essentials, 2E by Don. E. Schultz, William A. Robinson, and Lisa A. Petrison. Reprinted by permission of NTC Publishing Group, Lincolnwood, IL.

Tools for Consumer Sales PromotionCouponsPremiumsFrequent Buyer ProgramsContests and SweepstakesSamplesPoint-of-PurchaseDisplaysSixCategoriesofConsumerSalesPromotions

Tools for Trade Sales Promotion

Advantages of Personal SellingCost ControlMessage ControlTargetedDetailed InformationClosing Sales

Advertising Versus Personal SellingPersonal 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.

Differences Between Traditional & Relationship SellingTraditional Personal SellingSell products (goods and services)Focus on closing salesLimited sales planningSpend most contact time telling customers about productConduct product-specific needs assessment Lone-wolf approach to the accountProposals and presentations based on pricing and product featuresSales follow-up focused on product delivery

Relationship SellingSell advice, assistance, and counselFocus on improving the customers bottom lineConsiders sales planning as top prioritySpend most contact time attempting to build a problem-solving environment with the customerConduct discovery in the full scope of the customers operationsTeam approach to the accountProposals and presentations based on profit impact and strategic benefits to the customerSales follow-up is long term, focused on long-term relationship enhancement

Source: Robert M. Peterson, Patrick L. Shul, and George H. Lucas, Jr., Consultative Selling: Walking the Walk in the New Selling Environment, National Conference on Sales Management, Proceedings, March 1996.

Steps in the Selling ProcessBasicSteps intheSellingProcessGenerating Sales LeadsQualifying Sales LeadsMaking the Sales ApproachMaking the Sales PresentationHandling ObjectionsClosing the SaleFollowing Up

Functions of Sales ManagementMotivate Sales ForceEvaluate Sales ForceManage TurnoverTrain Sales ForceDevelop Compen-sation PlanStructure Sales ForceDetermine Sales Force SizeRecruit Sales ForceSet Sales ObjectivesMajor Tasks of Sales Management

Steps in Setting the Right Price$ $ $ $ $ $ $ $Fine-Tune Base PriceChoose StrategyEstimate Demand, Costs, and ProfitsEstablish Pricing GoalsRight Price

Legal and Ethical Issues in PricingUnfair Trade PracticesKey Legaland EthicalIssuesRelated toPricePrice FixingPrice DiscriminationPredatory Pricing

Discounts, Allowances, and RebatesPriceReductions

Geographic PricingBasing-PointFreight-AbsorptionZone PricingUniform DeliveredFOB OriginPricingTacticsBased onGeography

Special Pricing TacticsOdd-EvenPricingTwo-PartPricingBundlePricingBaitPricingPriceLiningFlexiblePricingProfessionalServicesLeaderPricingSinglePriceCommonSpecial PricingTactics

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