Promotion

Basic Promotion
Intergrated Marketing Communications

Personal Selling

Advertising & Sales Promotion

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Promotion communication of information

influence the buyer 3 methods

Personal Selling

Mass Selling
Sales Promotion

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Personal Selling direct communication between seller and buyer face2face contact

Usually used to sell industrial goods and services

Also used to sell some expensive consumer items, eg. Cars, computer systems

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Mass Selling communicating with large numbers of potential customers non-personal selling

used when the target market is large and dispersed

Advertising is a form of Mass Selling

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Advertising the main form of mass selling

any paid form of nonpersonal communication eg. Techniques include billboard ads and TV commercials

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Publicity
The generation of awareness about a product beyond regular advertising methods.

Usually less costly than advertising because sometimes the message is spread for free by a newspaper article or TV story.

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Publicity
Examples of Publicity

famous person photographed using your product

your product mentioned in National News in a positive way your product featured in a movie TV commentary about aspects of your product trade magazines carrying a story
eg. Road and Track doing a feature on the new Landrover

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Publicity
Publicity can be negative eg. If a famous movie star gets electrocuted using your product, this can cause people to NOT want to buy it this would be a major problems eg. If your product is sabotaged - this could include tampering with medical products ie. Tylenol eg. If there are negative rumours about the ingredients in your product eg. If there are negative ingredients about the moral aspects of your company

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Promotion People
Sales Managers Advertising Managers

Sales Promotion Managers

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Promotion People
Sales Managers Are concerned with managing personal selling In small companies this person also does the advertising and sales promotion

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Promotion People
Advertising Managers They manage the mass selling activities They chose the company to make the commercials Pick the billboard signs etc. If the company is big enough they hire an outside agency They may also do publicity as well

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Promotion People
Sales Promotion Managers They manage the Sales Promotion activities

They decide about in-store coupons, prizes, contests etc.

They spend a lot of time visiting the retail outlets where the product is sold

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People in Sales Promotion

Sales Promotion Managers - they deal with
Point-of-purchase advertising specialty advertising samples coupons premiums loyalty points / air miles rebates contests
Page 455

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Sales Promotion includes:

Point-of-purchase advertising specialty advertising samples coupons premiums loyalty points / air miles rebates contests

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Relationship between Advertising and the Product Life Cycle

Not mentioned in your textbook

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Informing people have to know about it, in order to buy it

Advertising that seeks to develop demand through presenting factual information on the attributes of a product or service. Tends to be used in promoting NEW products. Use in the Introductory Stage of PLC

Page 458 - 459

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Persuading
when competition offers similar product, you have to persuade them to try yours

Advertising that emphasizes using words and/or images to try to create an image for a product and to influence attitudes about it. Used by Coke and Pepsi re: lifestyle ads.

Used after the Introductory Stage of the PLC

Page 458 - 459

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Reminding
when new competition comes along, you have to remind customers of your greater experience, advantages etc.

Advertising whose goal is to reinforce previous promotional activity by keeping the products or services name in front of the public.

Used in the Maturity Period and the Decline Stage of the PLC.

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Pushing through the promotion channel

Producer personal selling 2 wholesaler retailer customer

Promotion techniques used

run ads in trade magazines to make wholesalers aware of the product

provide incentives to retailers to carry the item

cases it buys page 466

free case of drinks with each 2

run contests for salespeople to win prizes for selling the product

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Pulling through the promotion channel

Producer personal selling 2 wholesaler retailer customer

Promotion techniques used

run TV commercials so customers directly learn about the product - then they go to the store and ask for it, or call around to find out where it is sold give free samples to potential customers

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Pulling through the promotion channel

Producer personal selling 2 wholesaler retailer customer

Sometimes you do pulling when the Middlemen cannot be pushed, that is they already have a competitors product, so the way to get Middlemen to WANT to carry the product, is to have customers ask for it.

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Potential Mail Recipients

Once your name is on a list for a newspaper subscription, your name and address can be sold to another company who will mail you information to try and convince you to buy their product. Buying and selling lists (databases) of such names is big business.

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Comparison of Direct Marketing and General Advertising

Direct Marketing Selling to individuals. Customers are often identifiable by name, address, and purchase behaviour. Products have added value or service. Distribution is important product benefit. The medium is the marketplace. Marketer controls product until delivery. Advertising used to motivate an immediate order or inquiry. General Advertising Mass selling. Buyers identified as broad groups sharing common demographic and psychographic characteristics. Product benefits do not always include convenient distribution channels. Retail outlet is the marketplace. Marketer may lose control as product enters distribution channel. Advertising used for cumulative effect over time to build image, awareness, loyalty, benefit recall. Purchase action deferred. Repetition used over time. Consumers feel less risk have direct contact with the product and direct recourse. Not in your text

Repetition used within ad. Consumers feel high perceived risk product brought unseen. Recourse is distant.

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Adoption Process
Innovators Early Adopters
- sales people concentrate their efforts here

Early majority
Late majority

Laggards, or nonadopters

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Setting the promotion budget

Most common method is based on using past percentages
- that is to say,,,,

If you sold $ 1,000,000 and you spent 20% on advertising, which = $200,000
then, if you spend $400,000 you should sell $2 million!

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Setting the promotion budget

Other methods - used in real world
Matching what competition spends

Based on what is required to get number of customers that will meet corporate objectives called the Task Method
- sometimes stated as a % of sales