Chapter16 Promotion

Marketing vs. Promotion

Marketing concept vs. promotion concept

The marketing mix product place price promotion

Marketing vs. Promotion (cont’d)

The promotion mixAdvertisingPersonal sellingSales promotionDirect marketingInternet marketing Publicity

Marketing vs. Promotion (cont’d)

Types of sales promotion Consumer products

consumer-oriented trade-oriented

Industrial products

Exhibit 14-3

0

Price

Quantity

D

0

Price

Quantity 0

Price

Quantity

D2

D1 DD

D

B. to the rightA. To be more inelastic

C. Both to the right and more inelastic

14-8

Promotion and the Demand Curve

Integrating the Elements of the Promotion Mix

Stages of the buying decision prepurchase purchase postpurchase

Size of decision-making unit

Integrating the Elements of the Promotion Mix (cont’d)

The product life cycleProduct characteristics

complexity risk

The target audience consumer vs. business pull vs. push

Push vs. Pull Strategies

Push

Manufacturer Wholesaler Retailer Consumer

Push vs. Pull Strategies

Pull

Manufacturer Wholesaler Retailer Consumer

Promotional Objectives

Sales targetsMarket share targetsCommunication targets

awareness information brand preference share of voice share of mind share of heart

Promotional Objectives (cont’d)

Direct objectives Indirect objectivesIndirect objectives are used more

often

Promotional Objectives (cont’d)

Situations where direct objectives may be appropriate:

Advertising by retailersDirect-response advertisingSales-promotion advertisingBusiness-to-business advertising

Promotional Objectives (cont’d)

Should state:Target audienceObjectiveDegree of changeTime frame

Promotional Objectives (cont’d)

Example:Target -- 30 million U.S. householdsCommunication objective -- The

detergent buyer should identify Brand X as a low-sudzing detergent

Desired change -- from 10 to 40 percent

Time frame -- 1 year

Advertising Media

TelevisionRadioOutdoor

billboards transit advertising

MagazinesNewspapersDirect mailInternet

banners links to related

web-sites

Advertising Media (cont’d)

Criteria for selecting mediaCostCompatibility with media habits of

target audienceCompatibility with productCompatibility with message

Types of Advertisements

Product advertisementsInstitutional advertisementsPioneeringCompetitiveReminderAdvocacy

Advertising Appeals

Rational appeals

Moral appeals

Emotional appeals

Emotional Appeals

JoyLoveHumorSex

PrideGuiltFear

Execution Styles

Slice-of-lifeLifestyleMusicalPersonality symbolHumorEndorsements (expertise,

trustworthiness, likeability)

Media Terminology

ReachRatingFrequencyGross Rating Points (GRPs)ImpactCost per thousandWasted coverage

Budgeting Methods

Percentage of sales methodMatch-competitors methodAffordability methodShare of market methodObjective and task method

Budgeting Methods (cont’d)

Objective and task methodIdentify the objectivesDetermine the tasks that will have to

be performed Determine the cost of performing

those tasks

Budgeting Methods (cont’d)

Example of objective and task method

Identify the objectives Target -- 30 million U.S. households Communication objective -- The detergent

buyer should identify Brand X as a low-sudzing detergent

Desired change -- from 10 to 40 percent Time frame -- 1 year

Budgeting Methods (cont’d)

Example of objective and task method (cont’d)

Determine the tasks that will have to be performed reach 80% of the market with the advertising

message determine the frequency or average # of

impressions needed (frequency = 30) determine the number of Gross Rating Points

(GRPs) (80 X 30 = 2,400 GRPs)

Budgeting Methods (cont’d)

Example of objective and task method (cont’d)

Determine the cost of performing those tasks determine the average cost of a GRP

($3,000 per GRP) multiply by the number of GRPs ($3,000

X 2,400 = $7,200,000)

Media Scheduling

Steady (drip) scheduling

GRPs

Time

Media Scheduling

Flighting or “intermittent” schedule

GRPs

Time

Media Scheduling

Pulse or “burst” schedule

GRPs

Time

Sales Promotion

Consumer products

Industrial products

Sales Promotion (cont’d)

Consumer productsConsumer-oriented

coupons premiums samples contests/sweepstakes rebates etc

Sales Promotion (cont’d)

Consumer products (cont’d)Trade-oriented

point-of-purchase (POP) advertising allowances display allowances merchandise assistance quantity discounts

Sales Promotion (cont’d)

Industrial products

Trade showsDisplays/exhibitsBrochures and technical promotional

material

Other Promotional Tools

Direct marketingPublicityE-Commerce -- or is e-commerce

much broader than promotion?Personal selling

Consumer Behavior Issues (p. 349)

Learning Hierarchy

Relevant to high-involvement products in industries where product differentiation exists

Learn Feel Do

Consumer Behavior Issues (p. 349)

Dissonance-Attribution Hierarchy

Relevant to high-involvement products in industries where little product differentiation exists (e.g., refrigerators)

Do Feel Learn

Consumer Behavior Issues (p. 349)

Low-Involvement Hierarchy

Attitude change occurs only after product experience

Relevant to low-involvement products in industries where little product differentiation exists (e.g., soft drinks).

Do Feel