Marketing Ch 19

1. Marketing Ch 19 What is Promotion?

2. The Role of Promotion • Promotion – Any form of communication a business or organization used to inform, persuade, or remind people about its products and improve its public image. • Product Promotion – To convince potential customers to buy products from it instead of from a competitor

3. The Role of Promotion • Explains the major features and benefits of its product (especially in relation to the products of its competitors) • Tells where those products are sold • Advertises sales on those products • Answers customers questions • Introduces new products

4. The Role of Promotion • Institutional Promotion – Create a favorable image for itself (especially in relation to competitors) • Does not directly sell a certain product • By creating a favorable image ultimately result in increased sales of a company’s product

5. Basic Types of Promotions • Advertising • Publicity • Sales Promotion • Personal Selling

6. Advertising • Advertising – Is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. • Three ways advertising is distinguished from other forms of promotion • The time or space devoted to it is paid for • It used a set format to carry the message rather than personal, one-on-one selling • It identifies the sponsor of the message

7. Six Advantages of Advertising • A large number of people usually see the advertiser’s message • Advertising costs per potential customer (whether that customer is a viewer, reader, or listener) are usually lower than other forms of promotion • Businesses can choose the most appropriate media to reach their target market, since there are many different ways to advertise • Billboards, newspapers, radio, and television

8. Six Advantages of Advertising • A business can control the content of an advertisement and adapt it to the medium and method of presentation • Advertisements are subject to repeat viewing. This helps to keep the advertiser’s message in people’s minds. • Advertisements can “presale” products – that is, they can influence people to make up their minds about a purchase before they shop.

9. Four Advertising Drawbacks • Advertising cannot focus well on individual needs because the message is the same for all customers. • Some forms of advertising, such as television, can be too expensive for many businesses. • Frequent asked questions under favorites

10. Four Advertising Drawbacks • In certain respects, advertising is wasteful and inefficient. Many of the people that read magazines or view television, are not potential customers for the advertised products • Because of the cost involved and the need to attract and hold the attention of potential customers, advertisements often must be brief

11. Publicity • Publicity – Involves placing newsworthy information about a company, product, or person in the media • Promote particular events • Promote particular product • Principal function to build an image • Image is based on combination of: • Physical surrounding • Personal experience • Things written or said in the media

12. Publicity • How does advertising and publicity differ: • Publicity is FREE • News is huge and people are more likely to pay attention to a news story about a business than to advertisements for it.

13. Publicity • Negative side of publicity • Lose control over their message • Not all publicity is positive

14. Sales Promotion • Sales promotions – Represents all marketing activities, other than personal selling, advertising, and publicity • Objective is to increase sales, to inform customers about new products, and to create a positive store or corporate image

15. Sales Promotions • Three unique characteristics: • It usually involves short term activities (advertising and publicity are longer in length) • It usually offers some type of incentive to make a purchase • It can be successfully used in all channels of distribution with manufacturers, wholesalers, retailers, and consumers

16. Sales Promotions • May be either consumer orientated or trade orientated

17. Trade Promotions • Trade Promotions – Sales promotion activities designed to gain manufacturers’, wholesalers', and retailers’ support for a product • More money is spent promoting to businesses then to customers

18. Trade Promotions • Slotting Allowances – Cash premium paid by the manufacturer to a retail chain for the costs involved in placing a new product on its shelves • Buying space in the store • Pays for a retailers cents –off specials, charges for store shelves, penalties if a company’s product doesn’t sell, and store advertising and display costs

19. Trade Promotions • Buying Allowances – Special price discount given by manufacturers to wholesalers and retailers to encourage them to either buy a product or buy a larger quantity of a product • Because of the discount, wholesalers make more money on each product they sell

20. Trade Promotions • Trade Shows and Conventions – Designed to reach wholesalers and retailers. • Provide businesses with the opportunity to introduce new product, encourage increase sales, and gain continued support

21. Trade Promotions • Sales Incentive – Awards given to managers and employee who successfully meet or exceed their company’s set sales quota for a particular product.

22. Consumer Sales Promotions • Consumer promotions – Sales promotions designed to encourage customers to buy a product

23. Consumer Sales Promotions • Licensing – For a fee license logo’s, trademark’s, trade characters, names and likenesses, or personal endorsements to a business

24. Consumer Sales Promotions • Promotional Tie-ins – Involves sales promotional arrangements between one or more retailers or manufacturers • Combine resources to do a promotion that creates additional sales for each partner • Designed to stimulate customer response to a product offered

25. Consumer Sales Promotions • Visual Merchandising and Displays – Refers to the coordination of all physical elements in a place of business so that it projects the right image to its customers. • Displays – Refers to the visual and artistic aspect of presenting a product to a target group of customers

26. Consumer Sales Promotions • Premiums and Incentives – Designed to increase sales by building product loyalty and attracting new customers • Premiums – Low-cost items given away free to consumers as a condition of purchase

27. Premiums • 4 Types • Coupons – cash discounts on goods and services • Introduce new products • Enhance sales of existing products • Factory Packs – Free gifts placed in product packaging

28. Premiums • 4 Types • Traffic Builders – low-cost premiums given away free to consumers • Coupon Plans – Offering a variety premiums in exchange for labels, coupons, and other tokens • Part–Cash Redemption – Variation whereby you return proofs-of-purchase in exchange for a gift or rebate

29. Consumer Sales Promotions • Incentives – High-priced products earned and given through contests or as sweepstakes awards • Product Samples – Free trial size of a product dent through the mail, distributed door-to-door, or through retail stores and trade shows

30. Personal Selling • Personal Selling – Making an oral sales presentation to one or more potential buyers • Two types • Order-Taking • Order-Getting

31. Personal Selling • Order-taking Personnel – Cashiers, counter clerks, sales associates • Perform routine tasks • Order-Getting Personnel – Professional sales-people • More involves in informing customers and helping them buy

32. Promotional Mix • Promotional Mix – Combination of different types of promotions • Each type of promotion is designed to complement the other