CHAPTER 1A

PROMOTION MIX
5M’S OF ADVERTISING
(major decisions)
 Marketing Communication
Mix or Promotion Mix

Product’
s Design

Stores that Product’

Sell the s Price
Product

Product’
s
Package
Setting the Overall Communication Mix
Reaches
Reaches Many
Many Buyers,
Buyers, Repeats
Repeats
Advertising
Advertising Message
Message Many
Many Times,
Times,
Impersonal,
Impersonal, Expensive
Expensive
Personal
Personal Personal
Personal Interaction,
Interaction,
Selling Relationship
Relationship Building,
Building, Most
Most
Selling Expensive
Expensive Promo
Promo Tool
Tool
Sales
Sales Wide
Wide Assortment
Assortment of of Tools,
Tools,
Promotion Rewards
Rewards Quick
Quick Response,
Response,
Promotion Efforts
Efforts Short-Lived
Short-Lived
Public
Public Very
Very Believable,
Believable, Dramatize
Dramatize aa
Relations Company
Company or or Product,
Product,
Relations Underutilized
Underutilized
Direct
Direct Nonpublic,
Nonpublic, Immediate,
Immediate,
Marketing
Marketing Customized,
Customized, Interactive
Interactive
Push versus Pull Promotion
Strategy
What is Sales Promotion?

Sales Promotion Offers Short-

Term Incentives to Encourage
Purchase or Sales of a Product
or Service.
Offers Reasons to Buy NOW.
 Rapid Growth of Sales
Promotion
• Sales promotion can take the form of consumer
promotions, business promotions, trade
promotions, or sales force promotions.
• Rapid growth in the industry has been achieved
because:
– Product managers are facing more pressure to
increase their current sales,
– Companies face more competition,
– Advertising efficiency has declined,
– Consumers have become more deal oriented.
Sales Promotion Objectives

• Consumer Promotions: increase short-term

sales or help build long-term market share.
• Trade Promotions: get retailers to:
– carry new items and more inventory,
– advertise products,
– give products more shelf space, and
– buy product ahead.
• Sales Force: getting more sales support.
• In general, sales promotion should focus on
consumer relationship building.
 Major Consumer Sales
Promotion Tools
Sample
Sample Trial
Trial amount
amount of
of aa product
product

Coupons Savings
Savings when
when purchasing
purchasing
Coupons
specified
specified products
products
Cash Refund
Refund of of part
part of
of the
the purchase
purchase
Cash Refunds
Refunds
price
price
Price Reduced
Reduced prices
prices marked
marked on on the
the
Price Packs
Packs
label
label or
or package
package
Premiums Goods
Goods offered
offered free
free or
or low
low cost
cost
Premiums
as
as an
an incentive
incentive toto buy
buy aa
Advertising
Advertising Articles product
product with
Articles imprinted
imprinted with an
an
Specialties
Specialties advertiser’s
advertiser’s name
name given
given asas
gifts
gifts
 Major Consumer Sales
Promotion Tools
Patronage Cash
Cash or or Other
Other Award
Award Offered
Offered
Patronage Rewards
Rewards for
for Regular
Regular Use Use ofof aa Product
Product
Point-of-Purchase Displays
Displays or or Demonstrations
Demonstrations at at
Point-of-Purchase the
the Point
Point of
of Purchase
Purchase
Contest Consumers
Consumers SubmitSubmit an an Entry
Entry to
to
Contest be
be Judged
Judged
Sweepstakes Consumers
Consumers SubmitSubmit Their
Their
Sweepstakes Names
Names for for aa Drawing
Drawing
Consumers
Consumers Receive
Receive Something
Something
Games
Games Each
Each Time
Time They
They BuyBuy Which
Which May
May
Help
Help Them
Them Win Win aa Prize
Prize
 Major Trade Sales Promotion
Tools
Trade-Promotion Trade-Promotion
Objectives Tools
Persuade
Persuade Retailers
Retailers or
or
Wholesalers Discounts
Discounts
Wholesalers to
to Carry
Carry aa Brand
Brand
Give
Give aa Brand
Brand Shelf
Shelf Space
Space Allowances
Allowances
Promote
Promote aa Brand
Brand in
in
Advertising
Advertising Free
Free Goods
Goods
Push
Push aa Brand
Brand to
to Consumers
Consumers Push
Push Money
Money
Specialty
Specialty Ad
Ad Items
Items
 Major Business Sales
Promotion Tools

Business- Business-Promotion
Promotion Tools
Objectives
Generate
Generate Business
Business Leads
Leads Conventions
Conventions
Stimulate
Stimulate Purchases
Purchases Trade
Trade Shows
Shows
Reward
Reward Customers
Customers Sales
Sales Contests
Contests

Motivate
Motivate Salespeople
Salespeople
Developing the Sales
Promotion Program

Decide on the Size of the Incentive

Set Conditions for Participation

Determine How to Promote and

Distribute the Promotion Program

Determine the Length of the Program

Evaluate the Program

What is Public Relations?

Public Relations 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.
 Major Public Relations
Functions
Press
Press Relations
Relations or
or Agentry
Agentry Public Relations
Departments May
Product Perform Any or All
Product Publicity
Publicity
of the Following
Functions:
Public
Public Affairs
Affairs

Lobbying
Lobbying

Investor
Investor Relations
Relations

Development
Development
 Major Public Relations Tools

News
Web Site Speeche
s
Public Special
Service Events
Activities
Corporate Written
Identity
Audiovisual Materials
Materials
Materials
 Advertising

• Advertising is centuries old.

• U.S. advertisers spend in excess of $244
billion each year; worldwide spending
exceeds $465 billion.
• Advertising is used by:
– Business firms,
– Nonprofit organizations,
– Professionals, and
– Social agencies.
Major Decisions in Advertising
 Setting Advertising
Objectives
Informative Advertising Persuasive Advertising
Inform Consumers or Build Selective Demand
Build Primary Demand i.e Sony DVD Players
i.e DVD Players
Advertising Objective
Specific Communication Task
Accomplished with a Specific
Target Audience
During a Specific Period of Time
Comparative Advertising Reminder Advertising
Compares One Brand Keeps Consumers
to Another Thinking About a Product
i.e. Avis vs. Hertz i.e. Coca-Cola
Setting the Advertising Budget
Methods of Setting the Advertising Budget
for Each Product and Market.

Affordable Percentage-of-Sales
Percentage-of-Sales
Based on What the Based
Based on
on aa Certain
Certain
Company Can Afford Percentage
Percentage ofof Current
Current
or
or Forecasted
Forecasted Sales
Sales

Objective-and-Task
Objective-and-Task Competitive-Parity
Competitive-Parity
Based
Based on
on Determining
Determining Based
Based on
on the
the Competitors’
Competitors’
Objectives
Objectives &
& Tasks,
Tasks, Promotion
Promotion Budget
Budget
Then
Then Estimating
Estimating Costs
Costs
 Developing Advertising
Strategy
Advertising Strategy Consists of Two Major
Elements and Companies are Realizing the
Benefits of Planning These Two Elements Jointly.

Creating the Selecting the

Advertising Advertising Media

Messages
Creating the Advertising Message:
Message Strategy
Develop a Message
Focus on
Customer Benefits
Creative Concept
“Big Idea”
Visualization or
Phrase
Advertising Appeals
Meaningful,
Believable
& Distinctive
 Developing Advertising
Strategy: Message Execution

Testimonial Evidence Slice of Life

Scientific Evidence
Typical Lifestyle
Message
Execution
Technical Expertise Fantasy
Styles
Personality Symbol Mood or Image

Musical
 Advertising Strategy:
Selecting Advertising Media
• Deciding on reach, frequency, and impact.
• Choosing among the major media types.
– Media habits of target customers,
– Nature of the product,
– Types and costs of messages.
• Selecting specific media vehicles.
– Specific media within each general media type.
• Deciding on media timing.
– Scheduling advertising over the course of a year.
 Evaluating Advertising

Advertising Program Evaluation

Communication Effects Sales Effects

(Copy Testing)
Is the Ad Communicating Is the Ad Increasing
Well? Sales?
Other Advertising Considerations

Sales Departments in Advertising Departments

Small Companies in Larger Companies

Advertising Agency

Firm that Assists Companies

in the Planning, Creation, &
Implementation of Their
Advertising Programs
Advertising Management:
Key Questions
• What is my target audience
• How do they make decisions?
• What should be my brand positioning?
• How do I build brand equity?
• What motivates behaviour?
• How do I best communicate?
 How does advertising work?

Someone must:
• have an opportunity to see or hear the
message
• pay attention to the message
•understand what is presented
• act upon the message in the
desired manner
The Mandate for effectiveness
• Today advertising is in a bind
– A down economy
– Tragedy of 9/11
– New technologies that threaten how
advertising works
• Advertisers expect specific results that
lead to sales
• Advertising must be effective
What Makes an Ad Effective?
• Effective ads work on two levels: with consumers and
with advertisers.
– Consumers
• View ads for entertainment or out of curiosity
• May then learn the ad relates to a need
• May receive an incentive to risk change
• May find reinforcement for product decisions
– Advertisers
• Ads must gain consumers’ attention
• Ads must hold attention long enough to change
consumer purchasing behavior
What Makes an Ad Effective?
 Strategy

• Advertisers develop ads to

– Meet specific objectives
– Target a certain audience
– Speak to that audience’s most important concerns
– Appear in media that will reach the audience most
effectively
 Creativity

Lancer
• The creative concept is the ad’s central idea
– Grabs your attention
– Sticks in your memory
• Creativity drives the entire advertising field
– Planning strategy
– Conducting research
– Buying and placing ads
Execution

• Effective ads are well-

executed
– Details, photos, printing,
production values have
been finely tuned
– How you say it is as
important as what you say
 Ads Must Be Goal - Directed

• The intended effects of advertising are important for

evaluating effectiveness
• These goals include
– Perception
• Will the ad be attended to and remembered?
– Learning
• Will the audience understand
the message and make correct
associations?
 Ads Must Be Goal -Directed
• These goals include (cont.)
– Persuasion
• Does the ad change attitudes and touch
emotions?
– Behavior
• Will the audience try the product?
A Model of Key Effects
Current Advertising Issues

• Integrated marketing communications (IMC)

– Unifying all marketing communications tools to send a
consistent persuasive message
• Consumer Power
– Technology has given consumers greater leverage
 Current Advertising Issues

• Interactive advertising
– Will technology change the
face of advertising?
– Is the promise of technology
exaggerated?
– Implications of the failure
of banner ads
 Current Advertising Issues
• Globalization
– Trade barriers have fallen in Europe
– Formerly communist nations have partially opened
markets
– Should advertisers practice global or local advertising?
• Niche marketing
– Advertisers target market segments
– New technologies make targeting groups possible
The Changing Communications
Environment

Market Fragmentation Led to

Marketers Have Shifted

Media Fragmentation
Away From Mass
Marketing
Less Broadcasting
2 Factors
are Changing the Face of Today’s
Marketing Communications:

Improvement in
Information Technology
Has Led to
Segmented Marketing
More Narrowcasting
The Five Ms of Advertising