PROMOTION

Promotion Mix

Any form of communication a business or company uses to

inform, persuade or remind people about products and to
improve its image
 3

Elements in the communication process

Message
Message
Sender
Sender Encoding
Encoding Decoding Receiver
Decoding Receiver
Media
Media

Noise
Noise

Feedback
Feedback Response
Response

Receiver’s field of experience

Sender’s field of experience
Steps in Developing Effective Marketing Communication

Identifying the Target market

When it
What will How it will
will be
be said be said
said
Where it
Who will
will be
say it
said
 5

Integrated marketing communications (IMC)

Promotion Mix

The concept under which a company carefully integrates and

coordinates its many communications channels to deliver a clear,
consistent and compelling message about the organization and its
products.

Promotion keeps the product in the minds of the customer and helps
stimulate demand for the product.
Promotional Elements Used in IMC

Consistent,
Consistent,clear
clearand
an
compelling
compellingcompany
compan
and
andproduct
product
messages.
messages.
 Promotion Mix
 Advertising

any paid form of non-personal presentation of ideas, goods or services

by an identified sponsor
 Personal Selling

a paid form of personal presentation of ideas, goods or services by an

identified sponsor
 Publicity

any unpaid form of non-personal presentation of ideas, goods or services

 Sales Promotion

an activity and/or material that acts as a direct inducement, offering added

value or incentive for the product, to resellers, consumers or employees
 Purposes of Promotion

 Convince potential customers to buy

 Explain features/benefits of products
 Tell where products are sold
 Advertise sales on products
 Answer customers’ questions
 Introduce new products
 Create a favorable image of the company or product
 AIDA Model of Promotion Mix

 Get Attention

 Hold Interest

 Arouse Desire

 Obtain Action
 Factors Determining Promotion Mix

 Type of product

 Nature of market

 Budget availability

 Company policy

 Stage of product in its Life cycle

Relationship between Advertising and the Product Life Cycle
Prepared for Marketing
106 Copyright,
Professor W.T.G.
Richardson, Seneca
College

Competitive
Comparative
Pioneering
An Excellent ‘Out of the Box’ Thinking !

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Advertising is any paid form of non-personal presentation
and promotion of ideas, goods, or services by an
identified sponsor

 Broadcast
 Print
 Internet
 Outdoor
 Advertising

 Reaches large, geographically dispersed audiences, often with high frequency

 Low cost per exposure, though overall costs are high

 Consumers perceive advertised goods as more genuine

 Dramatizes company/brand and builds brand image

 May stimulate short-term sales

 Impersonal, one-way communication, tries to communicate a reason to purchase

The five M’s: mission, money, message, media and measurement

 15

Advertising
Major advertising decisions

Message
Message
decisions
decisions

Mission Money
Money Measurement
Measurement
Mission Budget Campaign
• Sales goals Budget Campaign
• Advertising decisions
decisions evaluation
evaluation
objectives
Media
Media
decisions
decisions
 Advertising objectives

 Informative advertising

 Persuasive advertising

 Reminder advertising

 Reinforcement advertising
 Money

 Stage in the PLC

 Market share

 Competition

 Advertising frequency

 Substitutes
 Designing a message

Message
Messagecontent
content What
Whatto
tosay?
say?

Message
Messagestructure
structure
&&Message How
Howto
tosay?
say?
Message format
format
Steps in Developing Effective Marketing Communication

Designing a Message

 Rational appeal relates to the audience’s self-interest

 Emotional appeal is an attempt to rouse up positive or negative
emotions to motivate a purchase
 Moral appeal is directed at the audience’s sense of right and proper
 Choosing media

Personal
Personal Non-personal
Non-personal
communication Word-of-mouth
Word-of-mouth
communication communication
communication
channel influence
influence
channel channel
channel

 Deciding on reach, frequency and impact

• Reach
• Frequency
• Impact
 Measurement
Measurement

 Communication – effect

 Sales- effect
 Advertising Versus Personal Selling

Personal Selling is more important if...

The product has a high value.
It is a custom-made product.
There are few customers.
The product is technically complex.
Customers are geographically concentrated.
Advertising/Sales Promotion is more important if...
The product has a low value.
It is a standardized product.
There are many customers.
The product is simple to understand.
Customers are geographically dispersed.
 Major advertising media

 Magazine

 Television

 Newspaper

 Yellow Pages

 Radio

 Outdoors

 Cinema

 Internet
Place advertisement (Out- of - home)

• Billboards (Hoardings, digital and transit)

• Public spaces (trains, buses, subways, bus stops,
petrol pumps, and railway stations)
• Product placement in movies
• POP (Point of Purchase)
Place advertisement (Out- of - home)
• Billboards (Hoardings, digital and transit)
• Public spaces (trains, buses, subways, bus stops,
petrol pumps, and railway stations)
• Product placement in movies
 SALES PROMOTION

2 for 1 Sale $2 off

after 8PM
on Tuesday
Buy One, Get
One Free

 Stimulate purchases

 Increase store traffic

 Sales Promotion
 Collection of incentive tools , mostly short term, designed to stimulate

quicker and greater purchase of particular products or services

 May be targeted at the trade or ultimate consumer

 Makes use of a variety of formats: premiums, coupons, contests etc.

 Attracts attention, offers strong purchase incentives, dramatizes offers,

boosts sagging sales

 Not effective at building long-term brand preferences
 Sales Promotion

 Short term incentives to encourage the purchase or sale of a product or

service. Sales promotion include tools for consumer promotion, trade

promotion and business and sales force promotion.

 Now ,it is part of the Marketing spend of all companies and these days SP

spends in many companies exceed that of the advertisements spends.

 30

Consumer-Promotion
Consumer-PromotionTools
Tools

Sales-promotion Tools

Samples Coupons
Coupons Cash
Cashrefunds
refunds
Samples

Price Premiums Warranties

Pricepacks
packs Premiums Warranties

Demonstrations
Demonstrations
Tie
Tie–in
–inpromotions
promotions POP
POP

Contests Sweepstakes
Sweepstakes Games
Games
Contests
 32

Trade-Promotion
Trade-PromotionTools
Tools

Buy-back
Buy-back
guarantees
guarantees
Price-offs Allowance
Allowance
Price-offs or
or
free
freegoods
goods
 33

Business-Promotion
Business-PromotionTools
Tools

Trade
Tradeshows
showsand
and
Specialty
Specialtyadvertising
advertising Sales
Salescontests
contests
Conventions
Conventions
 34

Personal Selling
Salesperson : An individual acting for a company by performing one or more of the

following activities:

Prospecting

Communicating

Servicing

Information gathering

Direct communications between paid representatives and prospects that lead to

transactions, customer satisfaction, account development, and profitable relationships.

 Personal Selling

 Most effective tool for building buyers’ preferences, convictions and

actions
 Personal interaction allows for feedback and adjustments
 Relationship-oriented
 Buyers are more attentive
 Sales force represents a long-term commitment
 Most expensive of the promotional tools
 Public Relations

It involves building good relations with the company’s various publics by obtaining
favorable publicity, building up a good corporate image and handling or heading off

unfavorable rumors, stories and events.

 Publications
 Events
 Speeches
 Press releases
 Sponsorships
 Public- service activities
 Web pages
 Identity media
“The planned and sustained effort to establish and maintain goodwill

and mutual understanding between an organization and public”.

 Reaches many prospects missed via other forms of promotion;

 Highly credible and very believable

 Often the most under used element in the promotional mix

 Direct Marketing
 Many forms:

• Telephone marketing, direct mail, online marketing, Catalog, Kiosks

etc.

 Four distinctive characteristics:

- Non - public
- Immediate
- Customized
- Interactive

Well-suited to highly-targeted marketing efforts.

Promotion Mix Strategies
 41

Push versus pull promotion strategy

Producer Reseller
marketing marketing
activities Retailer activities
Producer Retailer&& Consumers
Producer wholesalers Consumers
wholesalers

Push strategy

Demand Demand
Producer Retailer
Retailer&& Consumers
Producer wholesalers Consumers
wholesalers

Producer marketing activities

Pull strategy
Examples of push tactics
• Trade show promotions to encourage retailer demand
• Direct selling to customers in showrooms or face to face
• Negotiation with retailers to stock your product
• Efficient supply chain allowing retailers an efficient supply
• Packaging design to encourage purchase
• Point of sale displays

Examples of pull tactics

• Advertising and mass media promotion
• Word of mouth referrals
• Customer relationship management
• Sales promotions and discounts
 Channel Management
Place

It bridges the gap between the point of production and the point of
consumption.
 The channel serves as a connecting link between the
producer and consumers.

A channel of distribution represents three types of flows:

a. Goods flow from producer to consumers

b. Cash flow from consumers to producer as payment for goods

c. Marketing information flows in both directions

- From producers to consumers in the form of information on new products, new
uses of existing products, etc.

- Flow of information from consumers to producers is the feedback of the wants,

suggestions, complaints, etc.

Channel of Distribution

A set of interdependent organizations involved in the

process of making a product or service available for use
or consumption by the consumer or business user.
Why would a manufacturer not like to do his own distribution?

• Lacks the financial resources to do direct marketing

• Cannot have the infrastructure to make the product widely available
and near the customer
• Trading profits could be less than manufacturing profits
Consumer and Business Marketing Channels
Marketing Intermediary Reduces the Number of Channel
Transactions
Consumer and business marketing channels

Level 0

Level 1

Level 2

Level 3

Level 0

Level 1

Level 2

Level 3
Distribution Intensity

• Intensive distribution
• Selective Distribution
• Exclusive distribution
 The Best Channel System Should Achieve Ideal
Market Exposure

Market
Market
Intensive
Intensive
Intensive
Intensive Exposure
Exposure
Strategies
Strategies

Selective
Selective
Selective
Selective

= number of outlets
Exclusive
Exclusive
• Exclusive Distribution:
▫ Protected territories for distribution of a product in a given
geographic area
▫ Characteristics: prestige, image, channel control, and
high profit margins
• Selective Distribution:
▫ A limited number of outlets in a given geographic area are
used to sell the product
▫ Select channel members that maintain the image of the
product and are good credit risks, aggressive marketers and
good inventory planners.
• Intensive Distribution
▫ The use of all suitable outlets to sell a product
▫ Objective/Goal: complete market coverage and to sell to
as many customers as possible
Selective Distribution

Maytag uses selective distribution like

many furniture and appliance
manufacturers.
The “Where to Buy” page on their
Web site assists buyers in finding
stores that carry the Maytag brand.
 Limiting Market Exposure

Producer
Producer

Vertical
Arrangements
May Be Legal Wholesaler
Wholesaler

Retailer
Retailer Retailer
Retailer Retailer
Retailer

Horizontal Arrangements Are

Illegal
Channel Systems Can Be Complex
Channel Members
• Wholesalers
▫ Businesses that buy large quantities of goods from manufacturers,
store the goods, and then resell them to other businesses.
▫ Take title to goods they buy for resale.
▫ Rack jobbers-wholesalers who manage inventory and
merchandising for retailers by counting stock, filling it in when
needed and maintaining store displays.
▫ Drop shippers-own the goods they sell but do not physically
handle the actual products.
Channel Members
• Retailers
▫ Sell goods to final consumer for personal use.
▫ Brick-and-mortar retailers-sell goods to the customer
from their own physical stores.
▫ Buy products from manufacturers or wholesalers.
▫ Non-store retailers
▫ Takes title for goods.
▫ E-tailing-online retailing; selling products over the
Internet
 Channel Members
• Agents
▫ Intermediaries that bring buyers and sellers together.

▫ Independent Manufacturer’s Representative

 Work with several related, but noncompeting manufacturer’s in
a specific industry.
 Paid commission on what they sell.

▫ Brokers
 Negotiate a sell, paid a commission, and look for new customers
• Independent intermediaries do business with many different manufacturers and many different

customers. Because they are not owned or controlled by any manufacturer, they make it possible for

many manufacturers to serve customers throughout the world while keeping prices low.

• Merchant wholesalers are independent intermediaries that buy goods from manufacturers and

sell to retailers and other B2B customers. Because merchant wholesalers take title to the goods, they

assume certain risks and can suffer losses if products get damaged, become out-of-date or obsolete,

are stolen, or just don’t sell.

•  Merchandise agents or brokers are a second major type of independent intermediary. Agents

and brokers provide services in exchange for commissions. They may or may not take possession of

the product, but they never take title; that is, they do not accept legal ownership of the product.

Agents normally represent buyers or sellers on an ongoing basis, whereas brokers are employed by

clients for a short period of time.

Apple, Inc Headquarters are located at is located at 1 Infinite Loop,

Cupertino, California.

• The Apple Consultants Network includes independent professional service providers

and technology consulting firms that specialize in Apple and third-party solutions.

Certified on Apple technologies, these providers deliver on-site technology services and

support to home users and businesses of all sizes.

• Apple service providers are certified technicians, who complete regular Apple training

and assessments, and offer repair services, and exclusive access to genuine Apple parts.

• They are located in Asia/Pacific, Africa, the Middle East Europe and Latin America.

• Apple has over 200 retail stores worldwide including the US, UK and Canada. Apple

recently opened a new retail store in Shanghai China.

 Marketing Logistics

• Definition: The physical flow of goods, services,

and related information from points of origin to
points of consumption.

• Includes:
▫ Inbound distribution
▫ Outbound distribution
▫ Reverse distribution
Transportation

• Trucks
• Railroads
• Ships
• Pipelines
• Air
• Internet
• Intermodal
transportation
Intermodal Transportation

Intermodal transportation combines two or more modes of

transportation. Fishyback = water and trucks; Piggyback = trucks and
rail; Trainship = water and rail; Airship = air and water.
Third-Party Logistics

Most small and medium

size companies
outsource
transportation to UPS
or other logistics
providers.