Elements of the Promotional Mix

1. Elements of the Promotional Mix Chapter 15 Integrated Marketing Communications

2. Promotional Mix • Blend of personal selling and nonpersonal selling designed to achieve promotional objectives

3. Personal Selling • Interpersonal promotional process involving a seller’s person-to-person presentation to a prospective buyer • 14 million employed in the world • Oldest form of communication • Face to face, telephone, interactive online marketing, video conferencing

4. Nonpersonal Selling • Includes advertising, product placement, sales promotion, direct marketing, public relations • Non face-to-face

5. Advertising • Paid and non-personal through various media by a business firm, not-for-profit, or individual • Hopes of informing or persuading members of a particular audience • Primarily involves mass media

6. Product Placement • Marketer pays a motion picture or television program owner a fee to display his or her product prominently in the film or show • Reese’s Pieces in E.T. • http://www.youtube.com/watch?v=AfAzUAxWELU • Mars turned down the film’s offer to include M&M’s

7. Sales Promotion • Stimulates consumer purchasing through displays, trade shows, coupons, contests, demos, and various nonrecurrent selling efforts • Short term incentives • McRib at McDonald’s, Chicken Nuggets for 5.99, Applebee’s 9.99 sirloin

8. Direct Marketing • Direct communications other than personal sales contact between buyer and seller, designed to generate sales, info requests, or store visits • Direct mail, telemarketing, infomercials • Applebee’s $5 off carside orders of $20 or more leads to more store visits

9. Other Direct Marketing Communication Channels • Telephone, TV, Newspaper, Magazine, Radio, Catalogs

10. 2/19 Agenda Guerilla Marketing Sponsorships Direct Marketing Communication Channels New Project

11. Guerilla Marketing • Unconventional, innovative, and low-cost marketing techniques designed to get consumers’ attention in unusual ways • Relies on time, imagination, and energy • Scion and Code Red have found success with this method • “The Blair Witch Project”

12. Blair Witch’s Guerilla Campaign Arguably the most important aspect of a successful guerrilla campaign is staying one step ahead of the public. As consumers become more attuned to ad agency efforts, marketers have to figure out how to attack the mob from unexpected angles. The brand standard for catching the public off guard? 1999's The Blair Witch Project. With no stars, no script, and a budget of around $50,000, University of Central Florida Film School pals Daniel Myrick and Eduardo Sánchez successfully scrubbed out the line between reality and fiction. The film's tagline set the stage: "In October of 1994, three student filmmakers disappeared in the woods near Burkittsville, Maryland, while shooting a documentary. A year later, their footage was found." Audiences were expected to believe what they were watching -- shaky, low-quality videotape of three runny-nosed kids weeping in the woods -- was an edited-down version of real recovered footage. And while it was certainly an inventive way to challenge the boundaries of cinematic storytelling (not to mention justifying the low-budget look of the film), Blair Witch didn't exactly seem poised to rival Titanic. That is, until an inventive guerrilla marketing scheme wasdevised.

13. Blair Witch Guerilla Mktg. cont… To ease the suspension of disbelief and stir up some buzz, Sánchez created a Web site devoted to the Blair Witch -- a fictitious, woods-based specter who'd been snapping up Maryland kids for the last century. Although the legend was created out of whole cloth, it was soon snapped up by gullible Interneters everywhere, and a first-ballot hall of fame urban legend was born. Pretty soon, thousands of people were terrified of the Blair Witch. Even when the actors who played the "film students" started showing up (alive) doing interviews about the movie, many across the country refused to believe the Blair Witch wasn't real. From that point, the "I've got to see for myself" effect took over, and Blair Witch dominated at the box office. Considered the most effective horror hoax since Orson Welles' The War Of The Worlds broadcast, the film grossed $250 million worldwide. Not a bad return for Artisan Entertainment, which paid only $1 million for the flick after its Sundance screening. Source: http://www.cnn.com/2007/LIVING/11/13/guerrilla.marketing/

14. Sponsorships • Provision of funds for a sporting or cultural event in exchange for a direct association with the events or activity • Sponsor has, 1) Access to activity’s audience and 2) The image associated with the activity • Coca-Cola paying $500 million for 11 year deal for NCAA Championships

15. Sponsorships cont… • Companies are going away from tobacco and alcohol sales (Nascar) because of government restrictions on these ads • Assessing sponsorship results p. 500

16. Ambush Marketing • Firm that’s not an official sponsor tries to link itself to a major international event. • Samsung putting their logo on hats at the World Cup when Phillips was the official sponsor.

17. Direct Marketing Communication Project • Pick groups • 3 Groups (2 of 2, 1 of 3) • New Product • Create new or find one relatively new that no one knows about • Pick 3 of the 6 Communication Channels

18. Direct Marketing Communication Project • Telephone • Direct Mail • Newspaper • Television (NO) • Magazine • Radio

19. Developing an Optimal Promotional Mix • Nature of the market • Nature of the product • Stage in the product life-cycle • Price • Funds available for promotion

20. Nature of the Market • Personal selling works great in a market with limited buyers • Advertising is more effective when a market has large numbers of potential customers scattered over sizable geographic areas

21. Nature of the Market • The difference between advertising and marketing • Audiences reached

22. Stages in the Product Life Cycle • Promotional mix must be tailored to the products stage in the product life-cycle • In the introductory stage, there is a heavy emphasis on personal selling to the to the intermediaries • In the maturity and early decline stages, firms frequently reduce advertising and sales promotion expenditures

23. Price • More personal selling for higher priced items • Why might this be?

24. Funds Available for Promotion • A critical element in the promotional strategy is the size of the promotional budget • McDonald’s promotion

25. Pulling and PushingPromotional Strategies • Pulling strategy: promotional effort by a seller to stimulate demand among final users, who will then exert pressure on the distribution channel to carry the good or service, pulling it though the marketing channel • Pushing strategy: promotional effort by a seller to members of the marketing channel intended to stimulate personal selling of the good or service, thereby pushing it through the marketing channel

26. Budgeting for Promotional Strategy • Percentage-of-sales method • Fixed-sum-per-unit method • Meeting competition method • Task-objective method

27. Budgeting Percentage-of-sales method Promotional budget is set as a specified percentage of either past or forecasted sales. Fixed-sum-per-unit method Promotional budget is set as a predetermined dollar amount for each unit sold or produced. Meeting competition method Promotional budget is set to match competitor’s promotional outlays on either an absolute or relative basis.

28. Budgeting cont… Task-objective method Once marketers determine their specific, promotional objectives, the amount (and type) of promotional spending needed to achieve them is determined. Example: “By the end of next year, we want 75 percent of the area high-school students to be aware of our new, highly automated fast-food prototype outlet. How many promotional dollars will it take, and how should they be spent?”

29. Allocation of Promotional Budgets for Consumer Packaged Goods

30. Measuring the Effectiveness of Promotion • Direct sales results measures the effectiveness of promotion by revealing the specific impact on sales revenues for each dollar of promotional spending • Indirect evaluation concentrates on quantifiable indicators of effectiveness like: • Recall - how much members of the target market remember about specific products or advertisements • Readership – size and composition of a message’s audience

31. The Value of Marketing Communications • Social Importance • The one generally accepted standard in a market society is freedom of choice for the consumer • Promotion has become an important factor in campaigns aimed at achieving socially oriented objectives like the elimination of drug abuse

32. Addressing Social Concerns

33. The Social Importance: Merck Vaccine Division

34. Business Importance • Promotional strategy has become increasingly important to both small and large firms • Its effectiveness to encourage attitude changes, brand loyalty and increase sales is well-documented

35. Business Importance • Both business and nonbusiness enterprises recognize the importance of promotional efforts • Nonbusiness organizations using promotion include governments and religions

36. Economic Importance • Effective promotion has allowed society to derive benefits not otherwise available • Subsidizes the information contents of newspapers and the broadcast media