Chapter16 Promotion

Marketing vs. Promotion

 Marketing concept vs. promotion concept  The marketing mix  product  place  price  promotion

Marketing vs. Promotion (cont’d)

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The promotion mix

 Advertising  Personal selling  Sales promotion  Direct marketing  Internet marketing  Publicity

Marketing vs. Promotion (cont’d)

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Types of sales promotion

 Consumer products  consumer-oriented  trade-oriented  Industrial products

Promotion and the Demand Curve Price Price Price 0 D 1 D 2 Quantity 0 A. To be more inelastic Exhibit 14-3 14-8 D D Quantity 0 D D Quantity B. to the right C. Both to the right and more inelastic

Integrating the Elements of the Promotion Mix

 Stages of the buying decision  prepurchase  purchase  postpurchase  Size of decision-making unit

Integrating the Elements of the Promotion Mix (cont’d)

 The product life cycle  Product characteristics  complexity  risk  The target audience  consumer vs. business  pull vs. push

Push vs. Pull Strategies

 Push Manufacturer Wholesaler Retailer Consumer

Push vs. Pull Strategies

 Pull Manufacturer Wholesaler Retailer Consumer

Promotional Objectives

 Sales targets  Market share targets  Communication targets  awareness  information  brand preference  share of voice  share of mind  share of heart

Promotional Objectives (cont’d)

 Direct objectives  Indirect objectives  Indirect objectives are used more often

Promotional Objectives (cont’d)

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Situations where direct objectives may be appropriate:

 Advertising by retailers  Direct-response advertising  Sales-promotion advertising  Business-to-business advertising

Promotional Objectives (cont’d)

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Should state:

 Target audience  Objective  Degree of change  Time frame

Promotional Objectives (cont’d)

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Example:

 Target -- 30 million U.S. households  Communication objective -- The detergent buyer should identify Brand X as a low sudzing detergent  Desired change -- from 10 to 40 percent  Time frame -- 1 year

Advertising Media

 Television  Radio  Outdoor  billboards  transit advertising  Magazines  Newspapers  Direct mail  Internet  banners  links to related web sites

Advertising Media (cont’d)

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Criteria for selecting media

 Cost  Compatibility with media habits of target audience  Compatibility with product  Compatibility with message

Types of Advertisements

 Product advertisements  Institutional advertisements  Pioneering  Competitive  Reminder  Advocacy

Advertising Appeals

 Rational appeals  Moral appeals  Emotional appeals

Emotional Appeals

 Joy  Love  Humor  Sex  Pride  Guilt  Fear

Execution Styles

 Slice-of-life  Lifestyle  Musical  Personality symbol  Humor  Endorsements (expertise, trustworthiness, likeability)

Media Terminology

 Reach  Rating  Frequency  Gross Rating Points (GRPs)  Impact  Cost per thousand  Wasted coverage

Budgeting Methods

 Percentage of sales method  Match-competitors method  Affordability method  Share of market method  Objective and task method

Budgeting Methods (cont’d)

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Objective and task method

 Identify the objectives  Determine the tasks that will have to be performed  Determine the cost of performing those tasks

Budgeting Methods (cont’d)

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Example of objective and task method

 Identify the objectives  Target -- 30 million U.S. households  Communication objective -- The detergent buyer should identify Brand X as a low sudzing detergent  Desired change -- from 10 to 40 percent  Time frame -- 1 year

Budgeting Methods (cont’d)

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Example of objective and task method (cont’d)

 Determine the tasks that will have to be performed  reach 80% of the market with the advertising message  determine the frequency or average # of impressions needed (frequency = 30)  determine the number of Gross Rating Points (GRPs) (80 X 30 = 2,400 GRPs)

Budgeting Methods (cont’d)

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Example of objective and task method (cont’d)

 Determine the cost of performing those tasks  determine the average cost of a GRP ($3,000 per GRP)  multiply by the number of GRPs ($3,000 X 2,400 = $7,200,000)

Media Scheduling

 Steady (drip) scheduling GRPs Time

Media Scheduling

 Flighting or “intermittent” schedule GRPs Time

Media Scheduling

 Pulse or “burst” schedule GRPs Time

Sales Promotion

 Consumer products  Industrial products

Sales Promotion (cont’d)

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Consumer products

 Consumer-oriented  coupons  premiums  samples  contests/sweepstakes  rebates  etc

Sales Promotion (cont’d)

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Consumer products (cont’d)

 Trade-oriented  point-of-purchase (POP)  advertising allowances  display allowances  merchandise assistance  quantity discounts

Sales Promotion (cont’d)

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Industrial products

 Trade shows  Displays/exhibits  Brochures and technical promotional material

Other Promotional Tools

 Direct marketing  Publicity  E-Commerce -- or is e-commerce much broader than promotion?

 Personal selling

Consumer Behavior Issues (p. 349)

 Learning Hierarchy Learn Feel Do  Relevant to high-involvement products in industries where product differentiation exists

Consumer Behavior Issues (p. 349)

 Dissonance-Attribution Hierarchy Do Feel Learn  Relevant to high-involvement products in industries where little product differentiation exists (e.g., refrigerators)

Consumer Behavior Issues (p. 349)

 Low-Involvement Hierarchy Do Feel  Attitude change occurs only after product experience  Relevant to low-involvement products in industries where little product differentiation exists (e.g., soft drinks).