Week 8 Chapter 9: Promotion

1. Week 8 Chapter 9: Promotion

2. Chapter 9: Promotion Learning objectives: explain promotion and its role in the marketing mix understand the IMC approach to marketing promotion and the major elements of the promotion mix describe different types of advertising and the steps in creating an advertising campaign outline the role of public relations in promotion explain how sales promotion activities can be used understand the nature of personal selling discuss a range of marketing communication options additional to the traditional promotion mix.

3. Promotion • Promotion • The creation and maintenance of communication with target markets. • The marketing activities that make potential customers, partners and society aware of and attracted to the business’s offerings. • In marketing, promotion is usually thought of as comprising a strategic mix of advertising, public relations, sales promotions and personal selling. • the promotional approach is known as integrated marketing communications (IMC) • Marketing communication • A term for promotion that refers to communicating a message to the marketplace.

4. Communication process

5. The communications process Source the sender of a message the source deciding what to say & translating it into words or symbols that convey meaning Encoding Message channel the carrier of the message - the receiver translating the words or symbols back into the message Decoding Receiver the potential customer any distraction that reduces the effectiveness of the communication process Noise

6. Lecture exercise • Watch the following video clip and outline the source, message channel, encode & decode and receiver of the message. • Doritos Crystal ball

7. Objectives of promotion Objectives of promotion: To support the organisation's overall marketing objectives To demonstrate features and benefits To encourage product trial and create demand To reinforce the product or brand and encourage repeat purchase To increase support offered by retailers To increase awareness about and goodwill for the organisation. Involves some degree of philanthropy; when tied to the purchase of a product they are known as Cause-related marketing

8. Lecture exercise • Watch the following video clips and outline what promotion objective might be used? • Dove: Evolution

9. Integrated marketing communications Integrated marketing communications (IMC) The coordination of promotional efforts to maximise the communication effect. Promotion mix Combinations of methods used to promote a product or idea The four elements of a promotion mix are: Advertising Public relations Sales promotion Personal selling.

10. Advertising • Advertising: • The transmission of paid messages about an organisation, brand or product to a mass audience. • Worth over $12 billion/year in Australia • Benefits: • Reaches many people at relatively low cost per person • It is also possible to aim advertising at particular target markets by choosing appropriate media. • Limitation: • Difficult to measure effectiveness (‘Half the money I spend on advertising is wasted; the trouble is I don’t know which half’) • limited presentation and personalisation of the marketing message carried by advertising.

12. Jerry Seinfeld joins the Greater • Greater Building Society Dial-up Broadband Jerry Seinfeld joins the Greater Building Society

13. Advertising: Product & Organisational • Advertising can involve: • Traditional mass media - television, radio, newspapers and magazines, or • Other media - billboards, direct mail, the internet, email, SMS, and displays and signs on trucks, buses and taxis. • Advertising can be designed to promote either a product or an organisation (institutional). • Product advertising includes advertisements for goods and services. Two main types of product advertising: • Competitive advertising • Using advertising to promote the features and benefits of a product. 2. Comparative advertising • Using advertising to directly compare a product against a competing product. Common with groceries, automotive and housing industries • http://trak.in/tags/business/2010/09/20/competitive-advertising/

14. Advertising: Product & Organisational • Organisational or institutional advertising is aimed at promoting ideas and images. • Banks, insurance companies and travel centres often use this type of advertising to promote the nature of the service you can expect (e.g. short queues, friendly staff) rather than specific products you can buy. • Such advertising can also be combined with public relations campaigns to foster a particular image of the organisation or for it to push its agenda.

15. Creating an advertising campaign • Key steps in creating an advertising campaign: • Understand the market environment • Know the target market (audience) • Set specific objectives • Create the message strategy • Allocate resources • Select media • Produce the advertisement • Place the advertisement • Evaluate the campaign.

16. Advertising media options • Marketing organisations can choose among a variety of media, each with their own special characteristics. • Table 9.5 outlines the advantages and disadvantages of the principal media options. • Media to choose from includes: • Television • Radio • Internet • Email • Newspaper • Magazine • Direct mail • Public Signage

17. Table 9.5 Advertising media options: advantages and disadvantages

18. Legal issues in advertising • Legal issues in advertising • There are a number of legal restrictions on what can be advertised and how. • need to be truthful and honest in all forms of advertising and promotion and come under the Trade Practices Act 1974 (Cwlth) in Australia and the Fair Trading Act in New Zealand. • Recently, there has been growing pressure for greater regulation of advertising.

19. Public relations • Public relations • Communications aimed at creating and maintaining relationships between the marketing organisation and its stakeholders. (Stakeholders include customers, suppliers, owners, employees, media, financial institutions and those in the immediate and wider environment.) • Effective PR messages are timely, engaging, accurate and in the public interest. • Benefits: • Credibility, resulting word-of-mouth, low- or no-cost, effectively combat negative perceptions or events. • Limitations: • many efforts are seen by the news media as attempts to obtain free advertising and are thus rejected.

20. Public relations • Public relations aimsto generate positive publicity and goodwill toward the organisation, by using the following: • written materials e.g. annual reports • Sponsorships • giveaways • good deeds and other ways e.g. McDonalds McHappy Day events • Public relations is also used reactively to counter poor publicity or as a part of crisis management.

21. Product recall and public relations Dial-up Broadband Class discussion What are some of the sources of negative publicity the Mattel brand could encounter due to this product recall and how could they deal with this negative situation? Mattel

22. Public Relations Approaches and Methods • Three main approaches to Public Relations include Publicity, Sponsorship, Charitable donations • Publicityis the exposure a marketing organisation receives when it obtains free coverage in the media. • Positive coverage is preferred, but many marketers adhere to the old idea that ‘any publicity is good publicity’.

23. Public Relations Approaches and Methods • Sponsorshipis a paid association with an event or person. • E.g. Sanitariumsponsors Australia’s state cricket competition, the Sheffield Shield, via its Weet-bix breakfast cereal brand. • On a smaller scale, local businesses might sponsor school fetes by donating prizes and so on. • Involvement in charitable donations • Many businesses donate to charity or a ‘good cause’ and usually receive a public thank you and a certificate they can display at their premises. • Businesses may also receive publicity for their charitable work

24. Lecture exercise: Publicity • Watch the following video clip on the “heart attack grill” and outline whether you feel this is an example of good publicity or bad publicity. How could the organisation overcome bad publicity? • http://www.youtube.com/watch?v=koxRy4asAAc&playnext=1&list=PL9D2D70C77605D2D3&index=4

25. Sales promotion • Sales promotion • Offers of extra value to resellers, salespeople and consumers in a bid to increase sales. • Benefits: • smooth out sales in periods of low demand and to facilitate retailer support • Rewards the sale of company’s products • Limitations • Can lose effectiveness if overused • easily copied • public becoming increasingly cynical about whether they offer real value.

26. Sales promotion • Sales promotions • Short-term incentives to encourage purchase of a product by either resellers or consumers. • Consumer sales promotions include: • Free samples • Premium offers • Loyalty programs • Contests • Coupons • Discounts Rebates • Point of purchase • Event sponsorship

27. Consumer sales promotions • Free samples • Sample of a product provided for free so that consumers can experience it without committing to a purchase. • Premium offers • Given as a bonus for purchasing a product • Loyalty programs • Schemes that reward customers based on the amount they spend.

28. Consumer sales promotions • Contests • Effective in promoting product benefits and allow organisations to build a database of members of their target market. • Coupons • Vouchers that offer consumers a discount price on a product or service • Discounts • A certain amount off the regular price.

29. Consumer sales promotions • Rebates • Return of some of purchase price upon presentation of proof of purchase. • Point of purchase promotions • Includes in-store signage and display, and free product trials or demonstrations in stores • Event sponsorships • Exclusive merchandise deal, where sponsor has sole right to sell products at venue

30. Trade sales promotions • Trade sales promotions • Present products to business customers and stimulate the products’ movement through the marketing channel. Examples include: • Conventions and trade shows • Sales contests for marketing intermediaries • Gifts and premium money • Trade allowances • Cooperative advertising • Dealer listings

31. Personal selling • Personal selling • Personal communication efforts that seek to persuade consumers to buy products. • Expensive, high-involvement or industrial products favour personal selling • Benefits: • Can be specifically tailored to individuals, so has greater influence than advertising, sales promotions and PR strategies. • Limitations: • Expensive, • limited reach • labour intensive • time-consuming

32. Personal selling • Models of personal selling include INPLCF: • Information: Developing a list of potential customers, a process known as prospecting • Needs: Identifying the individual customer’s specific needs • Product: highlight how the product features match the customers needs, to stimulate and hold interest in the product • Leverage: Highlight comparative and competitive advantages • Commitment/close: salesperson asks the prospect to buy the product • Following up: Customer loyalty and repeat business can be encouraged by following up with customers

33. How important is personal selling to your organisation? Dial-up Broadband Class discussion Why would personal selling be important for the Story Bridge Adventure Climb. Story Bridge Adventure Climb

34. Roles and duties of a salesperson

35. Integrating promotion mix elements • Marketing organisations have different promotional needs and finite financial and other resources, so must choose from options in the promotion mix. • Those with large promotion budgets usually use multiple strategies. • E.g. Harvey Norman uses a combination or TV advertising, catalogues in newspapers, discounts, personal selling in store • Small budgets will rely on fewer, simpler strategies. • E.g. Local Restaurant might sponsor the local sports team, offer discounts on various nights • Best promotion mix will change over time.

36. Push and pull policies Marketing organisations must choose whether to primarily aim their promotions at consumers (pull policy) or at marketing partners such as retailers (push policy), or both. • Push policy • An approach in which a product is promoted to the next institution in the marketing channel. • E.g. a producer promotes its product to a wholesaler, which in turn promotes the product to a retailer, who finally promotes the product to consumers. • Pull policy • An approach in which a product is promoted to consumers to create demand through the marketing channel. • E.g. through the use of advertising, free samples, competitions

37. Push or Pull strategy? Dial-up Broadband Class Question: Would you define the Telstra Bigpond campaign as a push or pull strategy and why? Telstra Bigpond, Patrick and Daniel campaign

38. Additional forms of promotion • Sponsorship • The paid association of a brand with an event or person. • A company develops a sponsorship relationship with a particular event, providing financial support in return for the right to display a brand name, logo or advertising. • E.g. DHL sponsors surf lifesaving in Australia and Westpac sponsors rescue helicopters in Australia • Ambush marketing • The presentation of marketing messages at an event that is sponsored by an unrelated business or a competitor. • E.g. Holden controversially flew a blimp over the MCG during a recent Toyota sponsored AFL grand final.

39. Additional forms of promotion • Product placement • The paid inclusion of products in movies, television shows, video games, songs and books. • E.g. Coca Cola paid for more than 3000 mentions on US network television in just six months. • A plug • When the media overtly promotes a product within a program rather than as a separate advertisement. • E.g. Better Homes & Gardens recommends a particular brand and type of paint to use for a DIY project.

40. Additional forms of promotion • Guerrilla marketing • The use of an aggressive and unconventional marketing approach. • http://www.youtube.com/watch?v=8oKbt4yWEpE&feature=related • Viral marketing • The use of social networks to spread a marketing message. • E.g. ‘The Blair Witch Project’, Microsoft’s free Hotmail email service and Tourism Queensland’s ‘Best Job in the World’ campaign.

41. Viral marketing • Carlton Draught’s ‘Big Ad’ Dial-up Broadband Class discussion What do you believe are important factors in order for a marketing message to “go viral”.

42. Chapter 9: Promotion Summary: explain promotion and its role in the marketing mix understand the IMC approach to promotion and the major elements of the promotion mix describe different types of advertising and the steps in creating an advertising campaign outline the role of public relations in promotion explain how sales promotion activities can be used understand the nature of personal selling discuss a range of marketing communication options additional to the traditional promotion mix.