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Chapter 13

Product Promotional Strategy


Learning Goals
1. Define the objectives of promotion. 2. Describe the concept of a promotional mix. 3. Explain the various personal selling tasks. 4. List the steps in the sales process. 5. Explain the different types of advertising. 6. List the various advertising media. 7. Discuss how sales promotion and public relations are used in promotional strategy. 8. List the factors that influence the selection of a promotional mix. 9. Compare pushing and pulling promotional strategies.

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Chapter Overview

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promotional strategy The function of informing, persuading, and influencing; consumer decision.

This chapter focuses on promotion, the final marketing mix element. Promotional strategy is the function of informing, persuading, and influencing a consumer decision. It is as important to nonprofit organizations as it is to a profitoriented company like Colgate-Palmolive. Some promotional strategies are aimed at developing primary demand, the desire for a general product category. For example, the Wisconsin Milk Marketing Board promotes natural cheese through advertisements such as the one in Figure 13.1 without referring to any particular cheesemaker. But most promotional strategies are aimed at creating selective demand, the desire for a particular product. Land O' Lakes campaign"The taste that stands above. Land O' Lakes 4-Quart Cheese"is an example. This chapter covers the objectives of promotion, the components of the promotional mixpersonal selling, advertising, sales promotion, and public relationsare discussed, and finally, the factors that influence marketers' decisions in selecting a promotional mix are explained.

Objectives of Promotional Strategy


Promotional strategy objectives vary among organizations. Some use promotion to expand their markets, others to hold their current positions, still others to present a corporate viewpoint on a public issue. Promotional strategies can also be used to reach selected markets. Most sources identify the specific promotional objectives or goals of providing information, differentiating the product, increasing sales,

Figure 13.1 Promotional Strategy Creating Primary Demand

Source: Courtesy of Wisconsin Milk Marketing Board. Agency: Kocs, Wesson & Associates

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Figure 13.2 Using Advertising to Position a Product

Source: Courtesy of The Murphy-Phoenix Company.

stabilizing sales, and accentuating the product's value. An organization can have multiple promotional objectives. The National Pork Producers Council has developed "The Other White Meat" promotional campaign primarily to position pork as a white meat rather than a red meat. Other goals of the campaign include increasing the sale of pork and informing consumers that pork is low in calories and cholesterol, high in nutrition, easy to prepare, and versatile. To illustrate the versatility of pork, one advertisement in the campaign features 21 different pork dishes and offers consumers a free booklet for those and other pork recipes.1

Providing Information
In the early days of promotional campaigns, when there was often a short supply of many items, most advertisements were designed to inform the public of a product's availability. Today, a major portion of advertising in the United States is still informational. A large section of the daily newspapers on Wednesdays and Thursdays consists of advertising that tells shoppers which products are featured by stores and at what price. Health insurance advertisements in Sunday newspaper supplements emphasize information about rising hospital costs. Industrial salespeople keep buyers aware of the latest technological advances in a particular field. Fashion retailers advertise to keep consumers abreast of current styles. Promotional campaigns designed to inform are often aimed at specific market segments. Warner Bros. Records, for example, created a compact disc advertisement targeted at the baby-boom generation. In explaining the purpose of the ad, a Warner

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Figure 13.3 Advertising Designed to Increase Sales

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Source: Courtesy of Esmark Apparel, Inc. Model: Stephanie Seymour/Elite Agency

executive said, "We believe that most boomers are unaware that our classic recordings of the 1950s, 1960s, and 1970s are on CD along with the current releases." The ad informs baby boomers that Warner releases not only contemporary recordings but also some of its best albums from previous years, including those by Fleetwood Mac, Van Morrison, and ZZ Top, on compact discs. Included in the ad is a list of classic recordings now available on compact discs.2

Differentiating the Product


positioning Promotional strategy used to differentiate a good or service from those of competitors in the mind of a prospective buyer.

Marketers often develop a promotional strategy to differentiate their goods or services from those of competitors. To accomplish this, they attempt to occupy a "position" in the market that appeals to their target customers. Promotions that apply the concept of positioning communicate to consumers meaningful distinctions about the attributes, price, quality, or usage of a good or service. Positioning is often used for goods or services that are not leaders in their field. The advertisement for Murphy's Oil Soap in Figure 13.2 is part of a promotional campaign The Murphy-Phoenix Company uses to differentiate its household cleaner from its much larger competition. While market leader Mr. Clean and other large

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competitors such as Top Job are promoted as "tough on dirt" cleaners, Murphy's Oil Soap is positioned as a gentle household cleaner. The positioning strategy is carried through in other ads in the campaign, in which caretakers of churches and opera houses emphasize the soap's gentle cleaning attribute.3

Increasing Sales
Increasing sales volume is the most common objective of a promotional strategy. Some strategies concentrate on primary demand, others on selective demand. Sometimes specific audiences are targeted. In an effort to build the sales volume of its bodywear, Danskin developed an advertising campaign targeted at women age 18 to 44. Advertisements in the $3 million campaign, one of which is shown in Figure 13.3, helped boost the sales of Danskin's adult garments by 30 percent in one year. The campaign theme"All the World's a Stage"communicates the message that Danskin garments can be purchased not only for exercise and dance but also as everyday apparel.4

Stabilizing Sales
Sales stabilization is another goal of promotional strategy. Sales contests are often held during slack periods. Such contests offer prizes (such as vacation trips, color televisions, and scholarships) to sales personnel who meet certain goals. Sales promotion materialscalendars, pens, and the likeare sometimes distributed to stimulate sales during off-periods. Advertising is also often used to stabilize sales. Hotels are crowded on weekdays with business travelers, but these people go home on Friday. So many hotels promote "weekend packages" at lower rates to attract tourists and vacationers. A stable sales pattern allows the firm to improve financial, purchasing, and market planning; to even out the production cycle; and to reduce some management and production costs. The correct use of promotional strategy can be a valuable tool in accomplishing these objectives.

Accentuating the Product's Value


Some promotional strategies are based on factors, such as warranty programs and repair services, that add to the product's value. Many Ford Motor Company advertisements promote specific car and light truck models. Some ads, however, are designed to promote Ford's 6-year, 60,000-mile powertrain warranty, while others concentrate on the Lifetime Service Guarantee offered by Ford dealers. These promotions point out greater ownership utility to buyers, thus enhancing the product's value.

The Promotional Mix


Firms use various elements to achieve their promotional objectives. Promotion consists of two components: personal selling and nonpersonal selling. Personal selling is a promotional presentation made on a person-to-person basis with a potential buyer. Nonpersonal selling consists of advertising, sales promotion, and public relations. The promotional mix is a combination of personal selling and nonpersonal selling. Marketers attempt to develop a promotional mix that effectively and efficiently communicates their message to target customers.
promotional mix Firm's combination of both personal and nonpersonal selling designed to achieve promotional objectives.

Personal Selling
For many companies, personal sellinga promotional presentation made on a person-to-person basis to a potential buyeris the key to marketing effectiveness. The promotional strategy of Merrill Lynch, a financial services firm, focuses on its 12,000-person sales force. Selling was the original method of promotion. Today, selling employs over 6 million Americans. The sales function of most companies is changing rapidly. In some cases, the change has been only cosmetic, such as when the title salesclerk is changed to account representative but the job function remains the same. Yet, many firms are
personal selling Promotional presentation made on a person-to-person basis with a potential buyer.

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Figure 13.4 A Customer-Driven Approach to Order Processing

Source: Courtesy of Willamette Industries, Inc., Lumber and Plywood Divisions.

making significant changes in their sales force. Sales duties have been expanded, and in some instances, the function itself has changed. The primary trend is toward increased professionalism on the part of sales personnel. Today's salespeople act as advisors to their customers, helping them utilize more efficiently the items they buy.

Sales Tasks
Sales tasks vary significantly from one company or situation to another, but it usually includes three basic tasks: order processing, creative selling, and missionary selling.
Order processing Sales task of receiving and handling an order.

Order Processing. The task of order processing involves the receipt and handling of an order. Needs are identified and pointed out to the customer, and the order is processed. The handling of orders is especially important in satisfying customer needs. The Willamette Industries advertisement in Figure 13.4 points out that the firm's salespeople take a customer-oriented approach to order processing. They check the quality of the products their retail customers receive, know their customers' market, and ensure that products are available when customers need them. Route sales personnel for such consumer products as bread, milk, and soft drinks are examples of order processors. They check a store's stock, report the inventory level to the store manager, and complete the sale. Most sales jobs have at least a

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Figure 13.5 Steps in the Sales Process

Step 1 Prospecting and

Step 7

Follow-up

Step 2

Approach

Step 6

Closing

Step 3

Presentation

Step 5

Handling Objections

Step 4

Demonstration

minor order-processing function. It becomes the primary duty in cases where needs are readily identified and acknowledged by the customer. Creative Selling. Sales representatives for most industrial goods and some consumer goods are involved in creative selling, a persuasive type of promotional presentation. Creative selling is used when the benefits of a good or service are not readily apparent and its purchase is being based on a careful analysis of alternatives. In new-product selling, sales people need to be very creative if initial orders are to be secured.
creative selling Persuasive type of promotional presentation used when the benefits of a good or service are not readily apparent and/or when the purchase is based on a careful Missionary Selling. An indirect form of selling in which the representative analysis of alternatives. missionary selling Indirect form of selling in which the sales representative markets the goodwill of a company and/or provides technical or operational assistance.

markets the goodwill of a company or provides technical or operational assistance to the customer is called missionary selling. For example, many technically based organizations, such as IBM and Xerox, provide systems specialists who consult with their customers. These people are problem solvers and sometimes work on problems not directly involving their employer's product. A person who sells a highly technical product may do 55 percent missionary selling, 40 percent creative selling, and 5 percent order processing. By contrast, the job of retail salespeople may be 70 percent order processing, 15 percent creative selling, and 15 percent missionary selling. Marketers often use these three sales tasks as a method of classifying a particular sales job. The designation is based on the primary task performed by the salespeople.

The Sales Process


Years ago, sales personnel memorized a sales talk provided by their employers. Such a canned sales presentation was intended to provide all the information the customer needed to make a purchase decision. The entire sales process was viewed as a situation in which the prospective customer was passive and ready to buy if the appropriate information could be identified and presented by the representative. Contemporary selling recognizes that the interaction between buyers and sellers usually rules out canned presentations in all but the simplest of sales situations. Today's professional sales personnel typically follow a sequential pattern, but the actual presentation varies according to the circumstances. Figure 13.5 shows that seven steps can be identified in the sales process: prospecting and qualifying, the approach, the presentation, the demonstration, handling objections, the closing, and the follow-up. Prospecting and Qualifying. In prospecting, salespeople identify potential customers. They may come from many sources, such as previous customers, friends, business associates, neighbors, other sales personnel, and other employees in the firm. A recent study indicated increased advertising in business publications results in more prospects for salespeople promoting industrial goods and services.5 In the qualifying process, potential customers are identified in terms of their financial ability and authority to buy. Those who lack the necessary financial

canned sales presentation Memorized sales talk intended to provide all the information that the customer needs to make a purchase decision.

prospecting The sales task of identifying potential customers.

qualifying Sales task that enables the salesperson to concentrate on those prospects with the financial ability and authority to buy.

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resources or who are not in a position to make the purchase decision are given no further attention. The Approach. Salespeople should carefully prepare their approach to potential customers. All available information about prospects should be collected and analyzed. Sales representatives should remember that the initial impression they give prospects often affects the prospects' future attitudes. The Presentation. The presentation is the stage at which the salesperson transmits the promotional message. The usual method is to describe the good's or service's major features, highlight its advantages, and cite examples of consumer satisfaction. The Demonstration. A demonstration allows the prospect to become involved in the presentation. Demonstrations reinforce the message communicated to the prospective buyer. In promoting some goods and services, the demonstration is a critical step in the sales process. Paper manufacturers, for example, produce elaborate booklets that their salespeople use to demonstrate different types of paper, paper finishes, and graphic techniques. The demonstration allows salespeople to show art directors, designers, printers, and other potential customers what different paper specimens look like when they are printed. Handling Objections. Many salespeople fear objections from the prospect because they view them as a rebuke. Actually, such objections should be welcomed, because they allow additional points in support of the sale and to answer questions the consumer has about the good or service to be presented by the sales representative. The Closing. The closing is the critical point in sellingthe time at which the seller actually asks the prospect to buy the product. The seller should watch for signals that the prospect is ready to buy. For example, if a prospect starts discussing where the new equipment would fit in the plant system they are inspecting, it should give the sales agent a signal to attempt to close the sale. Effective closing techniques might be that the salesclerk can ask the prospect directly or propose alternative purchases. Or the salesperson may do something that implies the sale has been completed, such as walking toward a cash register. This forces the prospect to say no if they do not want to complete the sale. The Follow-Up. After-sale activities are very important in determining whether a customer will buy again later. After the prospect agrees to buy, the salesperson should complete the order processing quickly and efficiently and reassure the customer about the purchase decision. Later, the salesperson should check with the customer to determine whether the good or service is satisfactory. Many firms employ telemarketers to conduct post-sale activities. Telemarketing is a personal selling approach conducted entirely by telephone. Telemarketers employed by the Apple Bank for Savings in New York make followup calls to customers to measure their reaction to the bank's services. Telemarketers also perform other functions in the sales process. At Apple Bank, they handle customer inquiries and help market the bank's financial services. For example, telemarketers call customers when their certificates of deposit are about to mature and suggest other savings alternatives.6

telemarketing Promotional presentation involving the use of the telephone.

advertising Nonpersonal sales presentation usually directed at a large number of potential customers.

Advertising
For many firms, advertising is the most effective type of nonpersonal promotion. Advertising is a paid, nonpersonal sales communication usually directed at a large number of potential buyers. Firms in the United States account for about half of worldwide advertising expenditures. U.S. marketers spend more than $100 billion each year, or about $420 for each man, woman, and child. The nation's leading

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Figure 13.6 Example of Advocacy Advertising

Most CFOs know just how she feels.


So do shareholders and taxpayers. lack of fair competition in the securities underwiting market is cutting us all out of hundreds of millions of dollars each year. Outdated laws prohibit commercial banks from competing in the corporate debt, equity and revenue bond markets. Consequently last year ten firms dominated 90% of the $270 billion corporate security underwriting business and controlled 60% of the securities industrys total capital. So, they can pretty much name their own price. And we all have to pay it. By contrast, its estimated that if commercial banks were allowed to compete, the cost of underwriting corporate debt would decline by up to 40%. In 1987 the nationwide savings on the cost of underwriting municipal revenue bonds alone would have totalled more than $200 million. Chemical Bank is already highly regarded by CFOs n areas where were allowed to compete: private placements, swaps, municipal bonds, U.S. Government securities and foreign exchange trading. We believe that fair competition in the corporate debt and equity markets would promote the same efficient performance, innovative thinking and cost savings. We also believe that most Chief Financial Officers know just how we feel.

CHEMICALBANK
The bottom line is excellence.

Source: Reprinted by permission of Chemical Bank.

advertisers are Philip Morris; Procter & Gamble; General Motors; Sears, Roebuck; and Ford Motor Company, each of which spends more than $1 billion on advertising annually.7 Advertising expenditures can vary considerably from industry to industry and company to company. In the nonresidential general building contracting industry, for instance, advertising spending amounts to only two-tenths of 1 percent of sales. At the other extreme is the retail mail-order house industry, which spends 14 percent of sales on advertising.

Types of Advertising
The two basic types of advertising are product and institutional. Product advertising involves the selling of a good or service. Advertisements for Nike Air shoes, Marriott hotels, and Packard Bell computers would be classified as product advertising. Institutional advertising involves the promotion of a concept, idea, or philosophy, or the goodwill of an industry, company, organization, or government entity. For example, Texas promoted tourism with the theme: "Visit a country where the natives are friendly and the language barrier is easily overcome." Institutional advertising by profit-seeking firms is called corporate advertising. A form of institutional advertising that is growing in importance, advocacy advertising supports a specific viewpoint on a public issue. Its purpose is to influence public opinion and/or the legislative process. Advocacy advertising is used by many nonprofit organizations. For example, advertisements by the National Rifle Association support Americans' constitutional right to keep and bear arms and speak out against the passage of gun-control laws. The Chemical Bank advertisement in Figure 13.6 is an example of a corporate advocacy advertisement. The ad expresses Chemical Bank's viewpoint concerning a current law that prohibits commercial banks from competing in the securities underwriting market. Advocacy advertising is sometimes referred to as cause advertising

product advertising Nonpersonal selling of a good or service. institutional advertising Promotion of a concept, idea, philosophy, or the goodwill of an industry, company, organization, or a government entity. advocacy advertising Advertising that supports a specific viewpoint on a public issue and is designed to influence public opinion and/ or the legislative process.

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Advertising and the Product Life Cycle

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informative advertising Advertising approach intended to build initial demand for a good or service in the introductory phase of the product life cycle. persuasive advertising Advertising approach used in the growth stage of the product life cycle to improve the competitive status of a good, service, institution, or concept. comparative advertising Persuasive advertising approach in which direct comparisons are made with competing goods or services.

reminder-oriented advertising Advertising approach used during the late maturity and decline stages of the product life cycle that seeks to reinforce previous promotional activity by keeping the name of the good or service in front of the public.

Product and institutional advertising can be subdivided by its purposes: to inform, persuade, or remind. Informative advertising, intended to build initial demand for a product, is used in the introductory phase of the product life cycle. When Johnson & Johnson introduced its Acuvue disposable contact lensthe nation's first disposable lensit launched a massive advertising campaign directed at consumers and eye-care professionals to explain the health benefits of using the new product. Persuasive advertising attempts to improve the competitive status of a product, institution, or concept. It is used in the growth and maturity stages of the product life cycle. The Kinder-Care advertisement in Figure 13.7 is an example of persuasive advertising. Since it was established in 1969, Kinder-Care used informational ads that promoted the centers' hours and programs. But now that the company has grown to almost 1,400 centers and competitors such as La Petite Academy, Children's World, and Gerber Children's Center have entered the market, Kinder-Care has shifted to a persuasive advertising approach. The theme of the campaign"The Joys of Kinder-Care"promotes the idea of trust, which the firm's marketing research indicated was parents' major child-care concern.8 One of the most popular approaches to persuasive product advertising is comparative advertising, which makes direct comparisons with competitive products. Numerous companies have used comparative advertising in recent years. The Pepsi Challenge is an example of comparative advertising. Pepsi-Cola ads have used blind taste tests in which a majority of consumers choose Pepsi over CocaCola. Although Coca-Cola still leads the soft-drink market, the Pepsi Challenge helped increase Pepsi sales considerably. Reminder-oriented advertising, used in the late-maturity and decline stages of the product life cycle, attempts to keep a product's name in front of the consumer or to remind people of the importance of a concept or an institution. Soft drinks, beer, toothpaste, and cigarettes are products for which reminder-oriented advertising is used. The Association of Railroads used an advertisement that began: "Today's

Figure 13.7 An Example of Persuasive Advertising

Source: Courtesy of Kinder-Care Learning Centers, Inc.

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Figure 13.8 An Example of Reminder Advertising

Source: Courtesy of E.D. Bullard Company

railroads, America's great untapped resource." Even police cars in some areas of the United States carry reminder-oriented themes such as "We protect and serve." E. D. Bullard Company designed the poster shown in Figure 13.8 to remind workers of the importance of wearing hard hats.

Advertising Media
All marketers face the question of how to best allocate their advertising expenditures. Cost is an important consideration, but it is equally important to choose the media best suited for the job. All media have advantages and disadvantages; these are discussed in the sections that follow. Newspapers. Newspapers, with 26 percent of total advertising volume, are the largest of the advertising media.9 Because newspaper advertising can be tailored for individual communities, local advertising is common. Newspapers also reach nearly everyone in the community. Other advantages are that readers can refer back to them, and they can be coordinated with other advertising and merchandising efforts. In fact, advertising is considered the third most useful feature in newspapers, after national and local news. A disadvantage is the relatively short life span.

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Figure 13.9 Effective Use of Outdoor Advertising

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Source: Courtesy of Michigan Department of Transportation (MDOT)

Television. Television ranks second overall to newspapers with 22 percent of all advertising volume, but it is the leader in national advertising. Television advertising can be classified as network, national, local, and cable. Television has a significant impact on potential customers despite its high cost. Mass coverage, repetition, flexibility, and prestige are other advantages. The medium's ability to reach huge audiences was demonstrated vividly by the 1989 Pepsi commercial featuring pop singer Micahael Jackson. The firm spent $5 million to beam the commercial to 250 million viewers in 40 nations, from Finland to the Philippines. (The ad was pulled because of Michael Jacksons image and legal problems.) In addition to high cost, its disadvantages include the temporary nature of the message, some public distrust, and lack of selectivity in the ability to reach specific target market segments without considerable wasted coverage. Direct Mail. Direct mail is the third-leading advertising medium, with about 17 percent of total advertising expenditures. Its advantages include selectivity, intense coverage, speed, flexibility, complete information, and personalization. On the other hand, direct mail is extremely costly. It is also dependent on effective mailing lists, and it sometimes meets with consumer resistance. Radio. With 99 percent of all U.S. households owning on average five radio sets, radio is another important broadcast advertising medium. Radio, which accounts for 7 percent of total advertising volume, can be classified as network, spot, and local advertising. Advantages of radio are immediacy, low cost, targeted audience selection, flexibility, and mobility. Disadvantages include the short life span of a radio message and a highly fragmented audience. Magazines. Magazines account for about 5 percent of advertising volume. Modern Maturity, with almost 20 million subscribers, is the nation's largest magazine in terms of paid subscriptions. It is followed by Reader's Digest and TV Guide, each with about 17 million subscribers. Advantages of magazines include selectivity, quality reproduction, long life, and prestige. The main disadvantage of magazines is that they lack the flexibility of newspapers and broadcast media, but the appearance of local advertising in various regional editions of national news magazines suggests that this problem is being overcome.

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Outdoor Advertising. One percent of total advertising expenditures are on outdoor advertising such as billboards. Its strength is in communicating simple ideas quickly. The Michigan Department of Transportation (MDOT) billboard in Figure 13.9 illustrates this concept. Other advantages are repetition and the ability to promote goods and services available for sale nearby. However, the message must be brief, and there are aesthetic considerations. Other Media Options. Other media include advertising in movie theaters and on airline movie screens. Recently, several firms such as Coca Cola, PepsiCo, Chrysler, and Hershey placed ads on videocassette movies. Many firms display their advertising message on trucks, while others use transit advertising. An advertising vehicle gaining in popularity is the hot-air balloon, used by organizations such as Maxwell House, Coors, Eastman Kodak, and the states of Maryland and Connecticut. These alternative media can be employed separately or in conjunction with advertising campaigns using more traditional media. Can you name the candy the space creature picked up in the film "E.T."? Reeses Candy company's sales of Reeses Pieces went through the profit ceiling for this exposure. As such, many other companies now pay thousands of dollars for this type of theatrical exposure and advertising.

Sales Promotion
Sales promotion consists of the forms of promotion other than advertising, personal selling, and public relations that increase sales through one-time selling efforts. Sales promotion was traditionally viewed as a supplement to a firm's sales or advertising efforts, but now it has become an integral part of the promotional mix. Expenditures for sales promotion total more than $100 billion each year.
sales promotion Form of promotion designed to increase sales through one-time selling efforts such as displays, trade shows, special events, and other methods. point-of-purchase advertising (POP) Type of sales promotion that displays and demonstrates an item where the actual purchase decision is made.

Point-of-Purchase Advertising (POP)


Point-of-purchase advertising (POP) consists of displays and demonstrations promoting an item at a time and place near the location of the actual purchase decision, such as in a retail store. Video advertising on supermarket shopping carts is an example. POP can be very effective in continuing a theme developed by some other aspect of the firm's promotional strategy.

Specialty Advertising
Specialty advertising is the giving away of useful merchandise such as pens, calendars, T-shirts, glassware, and pocket calculators that are imprinted with the donor's name, logo, or message. Because the items are useful and are often personalized with the recipient's name, they tend to be kept and used by the targeted audience, giving the advertiser repeated exposure. Originally designed to identify and create goodwill for advertisers, specialty advertising is now used to generate sales leads and develop traffic for stores and trade show exhibitors.

specialty advertising Type of sales promotion that consists of giving away useful items imprinted with the donor's name, logo, or message.

Trade Shows
A trade show is often used to promote goods or services to resellers in the distribution channel. Retailers and wholesalers attend trade conventions and shows where manufacturers exhibit their lines. Such shows are very important in the toy, furniture, and fashion industries. They have also been used to promote the products of one nation to buyers from another. L.A. Gear used a trade show extravaganza to let retailers know about its diversified product line. The company, which originally produced a line of teenage fashion athletic footwear, expanded its offerings to include 80 women's shoe styles, a men's and a children's line, and an apparel collection. But most retailers carry a limited number of L.A. Gear styles compared to those of nationally recognized brand names such as Nike and Reebok. To build its brand recognition among retailers, L.A.

trade show Type of sales promotion that uses exhibitions designed to promote goods or services to retailers, wholesalers, international buyers, and other resellers in the distribution channel.

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Gear designed a trade show display replicating the city of Los Angeles, complete with a Beverly Hills Hotel and a 25-foot City Hall. The display includes a stage where dancers, gymnasts, and other performers entertained retailers attending the National Shoe Fair in New York and the Super Show, the trade show of the sporting goods industry. Don Wasley, L.A. Gear's vice-president of promotion, said, "When we created this trade show booth, it was to let the retailers know we'd arrived. We wanted them to take us seriously.10

Other Sales Promotion Methods


Other sales promotion techniques include samples, coupons, premiums, contests, and trading stamps. Most of these methods are used to introduce new products or encourage consumers to try a new brand. A sample is a free gift of a product distributed by mail, door to door, in a demonstration, or inside packages containing other products. Samples are particularly useful in promoting new products. PepsiCo used a novel sampling promotion to boost the market share of Pepsi Cola in Brazil. Young male students wearing T-shirts with the Pepsi logo dispensed Pepsi samples from refrigerated backpacks to beachgoers sunning themselves on the beaches of Rio de Janeiro. The promotion supported PepsiCo's "Taste of a new generation" advertising campaign in Brazil, where 50 percent of the population is younger than 20.11 A coupon is an advertising clipping or package inclusion redeemable by the customer. Offering what amounts to a small price discount, it can help get a customer to try a new or different product. Many retailers, including southern supermarket giant Winn Dixie, double the face value of manufacturers' coupons. In a recent survey comparing various methods of consumer promotion, 83 percent of respondents said coupons increased the value of their shopping dollar. The respondents gave sweepstakes and other sales promotion techniques much lower ratings.12 A premium is an item given free or at a reduced cost with the purchase of another product. Premiums are most effective when they relate in some way to the purchased item. To promote its new cinnamon-and-raisin biscuits and increase overall breakfast traffic, Hardee's fast-food restaurants offered the premium of a California Raisin figurine for 99 cents with the purchase of two biscuits. Sales during the four-week promotion increased 18 percent, well above Hardee's goal of increasing sales 4.5 percent.13 McDonals and Burger King promote theatrical releases through their Kids Meals. Trading stamps are similar to premiums in that they are redeemable for additional merchandise. Historically, they have been used to build loyalty to a certain retailer or supplier. Contests, sweepstakes, and games offer cash or merchandise as prizes to participating winners. The transit poster shown in Figure 13.10 advertises an American Natural Beverage Corporation sweepstakes in which the grand prize is a 1957 Thunderbird Classic. The first person to spell "Cruisin"' by collecting specially marked bottle caps from Soho Natural Soda wins the car.

public relations An organization's communications with its various publics.

Public Relations
Public relations is an organization's communications with its various publics, such as customers, vendors, news media, employees, stockholders, government, and the general public. Many of these communication efforts have a marketing purpose. Johnson & Johnson Health Care Company launched a five-year public relations campaign to educate the public on reducing childhood injuries. The Safe Kids program includes a free safety kit for children that contains Band-Aids and other J&J products. The firm hopes the goodwill generated by the program will not only enhance its image as a caring and concerned company but also translate into more sales. "Building our image builds our business," said a J&J executive.14 Public relations is often used to supplement advertising and personal selling

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Figure 13.10 Sweepstakes Promotion for Soho Natural Soda

Source: Courtesy of American Natural Beverage Corporation, 145 6th Avenue, New York, New York 10013.

efforts. In some cases, however, public relations is used as a dominant element in a firm's promotional campaign. For example, in addition to advertising, Paramount Pictures developed a public relations program to promote the Eddie Murphy movie "Coming to America." The program was designed to change Murphy's image and broaden his appeal beyond his hard-core, young male fans. In the movie, Murphy plays a romantic and humorous leading man, a departure from his familiar tough-guy role in previous films such as "Beverly Hills Cop" and "Trading Places." To stress the versatility of Murphy's talent, Paramount prepared publicity releases for newspapers and magazines and sent electronic press kits to television stations. These efforts resulted in extensive media coverage for the movie. For example, several magazines featured Murphy in cover stories, and radio stations gave the movie's soundtrack additional playing time.15

Selecting a Promotional Mix


Selecting the appropriate promotional mix is one of the toughest tasks confronting marketers, but there are some general guidelines to assist in determining the relative allocations of promotional efforts and expenditures among personal selling, advertising, sales promotion, and public relations. These guidelines might be stated as a series of four rules. The first guideline is the decision whether to spend promotional monies on advertising or personal selling. Once this decision is made, the marketer needs to determine the level of sales promotion and public relations efforts. A second consideration is the market served by the good or service. For instance,

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a drill press is sold to the industrial market, so the manufacturer's strategy must emphasize the sales force. By contrast, California Raisins are sold to consumers; an effective advertising campaign is important to consumer products like raisins. The third rule deals with the value of the product. Most companies cannot afford to emphasize personal selling in marketing a low-priced item and instead choose advertising for the promotional strategy of goods like toothpaste, cosmetics, soft drinks, and candy. Higher-priced items in both industrial and consumer markets rely more on personal selling. Examples include time-share vacation condominiums and Boeing aircraft. Finally, the marketer needs to consider the time frame involved. Advertising is usually used to precondition a person for a sales presentation. An effective and consistent advertising theme may favorably influence individuals when they are approached by a salesclerk in a store. But except for self-service situations, a salesperson is typically involved in completing the actual transaction. Advertising is often used again after the sale to assure consumers of the correctness of their selection and to precondition them for repeat purchases.16
pushing strategy Sales-oriented promotional strategy designed to motivate marketing intermediaries to push the good or service to their customers.

Alternative Promotional Strategies


The selection of a promotional mix is directly related to the promotional strategy the firm will employ. The marketer has two alternative strategies available to meet these goals: pushing strategy or pulling strategy. A pushing strategy is a sales-oriented approach. The product, product line, or service is marketed to wholesalers and retailers in the marketing channels. Sales personnel explain to them why they should carry this particular item or service. The

Figure 13.11 Examples of Pushing and Pulling Strategies Pushing Strategy

Pulling Strategy

Sources: Courtesy of New Zealand Kiwifruit Authority

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marketing intermediaries are usually offered special discounts, promotional materials, and cooperative advertising allowances. In the last case, the manufacturer shares the cost of local advertising of the product or line. All these strategies are designed to motivate wholesalers and retailers to "push" the product or service to their customers. The kiwifruit advertisement in Figure 13.11 is an example of a pushing strategy. In it, the New Zealand Kiwifruit Authority suggests ways retailers can merchandise the fruit so consumers will buy it. A pulling strategy attempts to generate consumer demand for the product, product line, or service, primarily through advertising and sales promotion appeals. Most advertising is aimed at the ultimate consumer, who then asks the retailer for the product or service; the retailer in turn requests the item or service from the supplier. The marketer hopes that strong consumer demand will "pull" the product or service through the marketing channel by forcing marketing intermediaries to carry it. The General Foods advertisement for Maxwell House coffee in Figure 13.11 illustrates a pulling strategy. The ad announced a sales promotion that tied in with the Taste of Chicago outdoor food festival. Consumers who brought two empty coffee cans to the Maxwell House cafe at the festival received $6 worth of free food tickets. The consumer pull influenced Chicago-area retailers to prominently feature the brand at their stores. With consumers redeeming about 49,000 empty cans, the promotion was so successful it produced record sales and moved the Maxwell House brand from third place to first in the Chicago market.17 Most marketing situations require the use of both strategies, although the emphasis can vary. Consumer products are often heavily dependent on a pulling strategy, while most industrial products are sold through a pushing strategy.

cooperative advertising Sharing of local advertising costs between the manufacturer and the marketing intermediary.

pulling strategy Promotional strategy utilizing advertising and sales promotion appeals to generate consumer demand for a good or service.

Summary of Learning Goals


1. Define the objectives of promotion. The objectives of promotion include providing information, differentiating the good or service, increasing sales, stabilizing sales, and accentuating the value of a good or service. Organizations frequently have multiple promotional objectives. Describe the concept of a promotional mix. Promotion consists of two distinct components: personal selling and nonpersonal selling, which includes advertising, sales promotion, and public relations. A promotional mix is a combination of the personal and nonpersonal elements a firm uses to achieve its promotional objectives. Explain the various personal selling tasks. The three sales tasks are order processing, creative selling, and missionary selling. Order processing involves the receipt and handling of an order. Creative selling is a persuasive type of promotional presentation. It is used when the benefits of a good or service are not readily apparent and/or when its purchase is being based on a careful analysis of alternatives. Missionary selling is an indirect form of selling in which the representative markets the goodwill of a company and/or provides technical or operational assistance to the customer. List the steps in the sales process. Personal selling is a promotional presentation made on a person-to-person basis to a potential buyer. The seven steps in the sales process are prospecting and qualifying, the approach, the presentation, the demonstration, handling objections, closing, and the follow-up. Explain the different types of advertising. Product advertising involves the selling of a good or service. Institutional advertising involves the promotion of a concept, idea, or philosophy, or the goodwill of an industry, company, organization, or government entity. A special category of institutional advertising is advocacy advertising, which supports a specific viewpoint on a public issue. Both product and institutional advertising can be subclassified as

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informative, persuasive, and reminder-oriented. Comparative advertising is a persuasive approach that makes direct comparisons with competitive goods or services. 6. List the various advertising media. Newspapers are the leading advertising medium in terms of advertising revenue. They are followed by television, direct mail, radio, magazines, and outdoor advertising. Use of other media includes cinema advertising and transit advertising. Each medium has specific advantages and disadvantages. Discuss how sales promotion and public relations are used in promotional strategy. Sales promotion consists of the one-time supporting aspects of a firm's promotional strategy. It includes point-of-purchase advertising (POP), specialty advertising, trade shows, samples, premiums, trading stamps, and promotional contests. Public relations deals with the organization's communications with its various publics. Many of these communications have a marketing purpose. List the factors that influence the selection of a promotional mix. The first decision necessary in the development of a promotional mix is whether to use advertising or personal selling. Sales promotion and public relations efforts are then determined. The factors that influence the selection of a promotional mix are the type of product (industrial or consumer), the value of the product, and the timing of its use. Compare pushing and pulling promotional strategies. A pushing strategy is a sales-oriented strategy designed to motivate marketing intermediaries to "push" the product to their customers. A pulling strategy utilizes advertising and sales promotion appeals to generate consumer demand for a product or product line.

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Questions for Review and Discussion


1. Not all promotional efforts are aimed at increasing sales. What other goals can be accomplished by promotion? What promotional mix would be appropriate for the following products? a. Arc welder b. Personal computer c. Specialty steel products sold to manufacturers d. Advertising services What is the primary sales task involved in the following occupations? a. Office supply salesperson selling to local business firms b. Counterperson at Burger King c. Representative for an outdoor advertising firm d. Salesperson representing Dow Chemical Outline the sequence of and explain the various steps in the sales process. Differentiate among product advertising, institutional advertising, and advocacy, or cause, advertising. Also explain the differences among informative, persuasive, and reminder-oriented advertising.

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6.

Which is the most popular advertising media in terms of total advertising volume? How do the other media rank in terms of promotional expenditures? What types of sales promotion technique would you use in the following businesses? a. Independent insurance agency b. Saab dealership c. Pizza restaurant d. Hardware wholesaler Explain how public relations might be used in the marketing strategy of the following: a. Natural gas utility b. Ford Motor Company c. Philadelphia Phillies baseball team d. A local McDonald's franchise What variables should be considered when selecting a promotional mix? Differentiate between a pushing and a pulling strategy. Under what circumstances should each be employed?

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11. McGraw Hill's Laboratory of Advertising Performance reported that the average business-to-business sales call now costs $251.63, up from $229.70 two years earlier. Over the past decade, the cost of personal selling was up 160 percent, while advertising costs had increased only 88 percent. David P. Forsyth, the head of McGraw-Hill Research, commented: "This continuing increase in personal selling costs makes advertising an even more effective tool for reaching business prospects." Why is personal selling so expensive? What can be done to moderate future cost increases? How would you allocate your promotional budget in a business-to-business marketing situation? 12. Describe the most effective salesperson you have encountered in the past year. Explain why you think this person is so effective. 13. Divide the class into three groups. Then set up a role-playing exercise in which students in Group A sell a product to someone in Group B. Group C is responsible for providing a critique of each of the sales interviews. Rotate the roles among the three groups. Continue this process for three rounds, so everyone will have a chance to play each role. Discuss what you have learned from this experience. 14. Describe the best television commercial you have seen in the past year. Discuss what made this commercial so memorable. 15. Tom Burdette's humorous radio commercials for Motel 6 end with the line: "We'll leave the light on for you." Why do you think these popular commercials were considered so effective?

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END NOTES
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 13. "Pork Producers Extend Campaign," Marketing News, February 29, 1988, p. 19. Matthew Grimm, "Time to Trade in those LPs," Adweek's Marketing Week, July 25, 1988, p. 4. Paul B. Brown, "The Put-Up-Or-Shut-Up Strategy," INC., July 1988, p. 113. Robert T. Grieves, "Stretching the Image," Forbes, April 18, 1988, p.99. "Study: Increase Business Ads to Increase Sales," Marketing News, March 14, 1988, p. 13. Apple Bank for Savings, 1987 Annual Report, p. 8. "The Top 50 Advertisers," Adweek's Marketing Week, August 1, 1988, p. M.R.C. 22. Patricia Winters, "Kinder-Care Plan Is Kid Stuff," Advertising Age, June 13, 1988, p. 10. U.S. Bureau of the Census, Statistical Abstract of the United States, 1988, 108th ed. (Washington, D.C.: U.S. Government Printing Office, 1987) p. 530. Shelly Garcia, "L.A. Gear Shoots Beyond Its Glitter Image," Adweek's Marketing Week, June 13, 1988, pp. 18-19. Tania Anderson, "Pepsi Rescues Parched Beachgoers," Advertising Age, May 2, 1988, p. S-9. Scott Hume, "Coupons Score with Consumers," Advertising Age, February 15, 1988, p. 40. "Raisin Expectations," Adweek's Marketing Week, April 11, 1988, p. 7. "Good Will, Good Sales," Adweek's Marketing Week, May 23, 1988, p. 49. Laura Landro, "Paramount's Marketers Try for a 'New' Eddie Murphy," The Wall Street Journal, July 7, 1988, p. 25. This rule is noted in Harold C. Cash and W. J. E. Crissy, "The Salesmam's Role in Marketing," Psychology of Marketing Vol. 12 (Personnel Development Associates). "GF's Taste of Success," Adweek's Marketing Week, April 11, 1988, p. 5.