marketing communications, promotion & pricingyeagerwt/chaps_19_20_21.pdf · there are five key...
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Marketing Communications Mix
• Advertising• Public Relations• Sales Promotion • Personal Selling• Direct Marketing* (authors don’t include)
There are five key elements of Marketing Communications
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Sales Promotion
• Usually intended to produce immediate results and generate additional sales
• Generally used in conjunction with other marketing communication elements
• Two basic types:– Consumer sales promotion – Trade sales promotion
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Sales Promotion
• Consumer sales promotion– Directed at ultimate end-users or the product
or service
• Trade sales promotion– Directed at retailers, wholesalers, or other
business buyers
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Sales Promotion
• Positives– Supports brand image
– Stimulates demand– Focuses customers’ attention
• Negatives– Can destroy pricing levels if overused
– Can cause loss of market share– At times, may hurt brand image
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Sales Promotion
Trade Promotion methods include:• Buying & Buy-Back Allowances• Merchandising Allowances• Scan-Back Allowances• Free Merchandise• Cooperative Advertising• Spiffs & Push Money• Sales Contests• Trade Show exhibits
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Sales Promotion
Consumer Elements include:• Coupons, Incentives & Premiums• Samples• Point-of-Purchase displays• Demonstrations• Sweepstakes, Games and Contests• Rebates
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Personal Selling
• Interpersonal paid communication between a buyer and a seller– Allows immediate feedback
– Dynamic in nature– Flexible
– Excellent for establishing and nurturing relationships
• Important when the product is complex
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Personal Selling
• Three primary types of communication between a buyer and a seller– Kinesic (motion)
– Proxemic (varying of distances)– Tactile (actual touching)
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Personal Selling
• Elements of the Process– Prospecting
– Pre-approach– Approach
– Making the presentation– Overcoming objections
– Closing the sale– Follow up
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Personal Selling
Types of Sales People• The Order-Taker
– Inside– Field
• The Order-Grabber– New Business– Keeping Current Customers happy
• Support Staff– Technical– Trade– Missionaries
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Personal Selling
Elements of Managing the Sales Force• Objectives
• Number of Salespeople• Recruitment, Selection & Training
• Compensation Plans• Motivation
• Territorial Management• Evaluation & Control
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Advertising
• Nonpersonal• Paid for by an identifiable sponsor• Disseminated through mass channels of
communication to promote the adoption / purchase of goods services, persons or ideas
• Most recognized form of marketing communication
• Efficient because it reaches a large audience
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Advertising
Types of Advertising include:• Institutional• Advocacy • Product-oriented• Pioneering• Competitive• Comparative
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Advertising
Media includes:• Television• Radio • Outdoor signage• Magazines• Newspapers• The Internet
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Advertising
Steps to a Successful Advertising Campaign:• Identify and know your target audience• Define what you want to accomplish • Develop the advertising platform• Determine the resource allocation• Generate a media plan• Create the advertising message based on the
corporate positioning statement• Execute the campaign• Monitor and Measure (evaluate the results)
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Advertising
Key terms to know:• Artwork• Copy• Layouts• Illustrations• Storyboards• Pre- & Post-tests• Aided & Unaided Recall tests• Monitor and Measure (evaluate the results)
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Public Relations
• Attempts to positively influence feelings, beliefs, and opinions
• Publicity is the primary element– Non-paid for communications– In media form (often news media)
– Not totally controlled by the sponsoring company
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Public Relations
• Key Publicity tools:– New releases
– Feature articles– Captioned photos
– Press conference
• Audits/Research– PR– Social
– Communications
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Public Relations
• Negative PR– Always at the worst time
– Happens fast– Need a contingency plan with appropriate
policies and procedures– Honesty is best policy; no cover-ups
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Price
• Price Competition– Allows flexibility
– Can generate a price war detrimental to all
• Non-Price Competition– Emphasis is on product features, services,
quality, packaging, etc.– Only effective if the purchaser can perceive
these differences– Must have a Unique Competitive Advantage
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Price
• Reflects the economic sacrifice of the customer.
• Easiest element of the Marketing Mix to change
• Changes more easily implemented• Through its elasticity, has an effect on
customer demand• Among the most important decisions faced
by a marketer
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Current Impacts on Pricing
• Global pricing considerations• Internet pricing effects• Competitive reactions• Current economic conditions• Ethical and Legal restraints
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Pricing Objectives
• There are five basic pricing objectives:– Ensuring market survival– Enhancing sales growth– Maximizing company profits– Deterring the competition from entering a
market position or niche – Establishing/maintaining a particular
product/quality image
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Influences on Pricing Decisions
• The five “C”s of Pricing:– Costs– Customers– Channels of Distribution– Competition – Compatibility (with overall corporate goals)
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Customer Price Evaluations
• Judgments of perceived value (the reasonable price)
• Price/Quality Relationship• Consumer Use of Price Information
– Best value strategy – Price-aversion strategy– Price-seeking strategy– Comparison of advertised price strategy
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Key Pricing Definitions
• Price Elasticity
– How sensitive is Demand to a change in Price
• Marginal Revenue– The change in total revenue when the firm
sells one additional unit
• Average Fixed Cost– The fixed cost per unit produced
• Variable Costs– Vary directly with the number of units produced
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Key Pricing Definitions
• Marginal Cost– The extra cost incurred when the firm produces
one additional unit
• Break-Even Point– Occurs when total revenue equals total costs
– Comparison of advertised price strategy
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Business Pricing
Discounts are typical• Trade – off of list price• Quantity – for larger orders• Cash – faster payment 2/10 net 30• Seasonal – to stimulate demand• Allowances – trade-ins, etc.
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Business Pricing
• Geographic Pricing is common• Transfer Pricing takes place within the
corporate structure