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Promotion and Integrated Marketing Communication Advertising Public Relations/ Publicity Personal Selling Sales Promotion Direct Marketing Chapters 12, 13 & 14

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Promotion and Integrated Marketing Communication

AdvertisingPublic Relations/ Publicity

Personal SellingSales Promotion

Direct Marketing

Chapters 12, 13 & 14

MARKETING COMMUNICATIONSMARKETING COMMUNICATIONS

• MARKETER INITIATED TECHNIQUES USED TO SET UP CHANNELS OF INFORMATION AND PERSUASION WITH TARGETED AUDIENCES TO INFLUENCE ATTITUDES AND BEHAVIOR “Promotion” Message and Media

• MARKETING COMMUNICATIONS MIX“Tool Box” of Media and Techniques Integration and Coordination Based on Communications Model

• MARKETER INITIATED TECHNIQUES USED TO SET UP CHANNELS OF INFORMATION AND PERSUASION WITH TARGETED AUDIENCES TO INFLUENCE ATTITUDES AND BEHAVIOR “Promotion” Message and Media

• MARKETING COMMUNICATIONS MIX“Tool Box” of Media and Techniques Integration and Coordination Based on Communications Model

MAJOR OBJECTIVES OF MARKETING COMMUNICATIONS

InformingInforming PersuadingPersuading

RemindingReminding

MARKETING COMMUNICATIONS OBJECTIVES

• Increase Market Penetration• Develop Repeat Purchase Behavior• Establish Customer Relationships• Increase Rate of Consumption• Encourage Product Trial• Stimulate Impulse Buying• Stimulate Demand• Differentiate the Product• Establish a Product Image• Influence Sales Volume• Establish, Modify, or Reinforce Attitudes• Develop Sales Leads• Stimulate Interest• Establish Understanding• Build Support & Acceptance

ELEMENTS OF THE MARKETING COMMUNICATIONS MIX

1. Advertising1. Advertising

2. Public Relations2. Public Relations5. Direct Marketing5. Direct Marketing

3. SalesPromotion3. Sales

Promotion4. Personal Selling 4. Personal Selling

Integrated Marketing Communications (IMC) is the strategic integration of multiple means of

communicating with target markets

MARKETING COMMUNICATIONS PLANNING

Marketing Plan ReviewMarketing Plan Review

Situation AnalysisSituation Analysis

Communications ProcessAnalysis

Communications ProcessAnalysis

Budget DevelopmentBudget Development

Program DevelopmentProgram Development

Integration & ImplementationIntegration & Implementation

Monitoring, Evaluating, Controlling

Monitoring, Evaluating, Controlling

METHODS

PUSH vs.PULL

Push and Pull Strategies

• Push strategy is directed toward the channel members– Provide incentives for those in the

distribution channels to buy the product

• Pull strategy is directed toward the ultimate purchaser– The focus is on creating demand at the

household or ultimate consumer level

Approaches to Determining the Promotional Budget

• Percentage of sales– A fixed amount of money per past or projected

sales• Probably the most widely used as it is simple• But, what about cause and effect?

• All available funds/All you can afford– Budget what is left over for promotional

expenditures• New companies often put all available funds into

promotion to penetrate the market• But, you can miss opportunities or overspend

Approaches to Determining the Promotional Budget

• Competitive parity/Follow the competition– Adopt the average ratio for promotional expenses

to sales for the industry or main competitor; or the same absolute amount as a competitor

• But, what if they do not know what they are doing and/or strategies and tactics are different?

• Objective and task– 1) Determine objectives; 2) Determine relationship

between expenditures and ability to achieve objective; 3) Set a budget that allows the achievement of these goals

Psychological Processes

• The high involvement decision processNeed -> search -> evaluation -> purchase -> outcomes

• The adoption processAwareness -> interest -> evaluation -> trial -> adoption -> post-adoption confirmation

• Buyer readiness states/Hierarchy of effectsAwareness -> knowledge -> liking -> preference -> conviction -> purchase

• AIDAAwareness -> Interest -> Desire -> Action

Selection of the Promotional Mix

• PRODUCT CHARACTERISTICS– Industrial good/technical good

• Need personal selling; customers want to receive information, inspect and compare the products

– Consumer package goods/frequently purchase items

• Advertising and sales promotion to reach market– Unit value

• Low cost must use mass media approaches, with high unit cost personal selling is effective

– Customization• Customized often requires personal selling

Selection of the Promotional Mix

• CUSTOMER CHARACTERISTCS– Industrial versus consumer market

• Consumers are easier to reach (decision maker) through media sources; industrial buyers typically have a more formal buying process, requiring personal selling

– Number of customers• For a small number of customers, personal selling can

play a much more important role– Geographical dispersion

• Not only affects the type of promotional effort, but the media choices

Advertising Defined

• ADVERTISING– Any paid form of non-personal presentation

and promotion of ideas, goods, or services by an identified sponsor

• Magazines, newspaper, outdoor posters, direct mail, radio televisions, etc.

• Key issues– The time or media space is paid for– The sponsor is identified and has control over the

promotional activity

DEVELOPING AN ADVERTISING CAMPAIGN

EvaluateAdvertisingEffective-

ness

Select &Schedule

Media

DetermineAdvertising

Budget

DetermineAdvertisingObjectives

SelectTargetMarket

DesignCreativeStrategy

ADVERTISING STRATEGYADVERTISING STRATEGY

• MESSAGE STRATEGIESObjective vs. Subjective MessagesComparative Message TechniquesEmotional Techniques: Mood, Fear, HumorCelebrity Endorsements vs. Non-Celebrity Images

• MEDIA STRATEGIESBroadcast: Television, RadioPrint: Newspapers, Magazines, JournalsSpecialized: Outdoor, Transit, Direct Mail, Internet

• MESSAGE STRATEGIESObjective vs. Subjective MessagesComparative Message TechniquesEmotional Techniques: Mood, Fear, HumorCelebrity Endorsements vs. Non-Celebrity Images

• MEDIA STRATEGIESBroadcast: Television, RadioPrint: Newspapers, Magazines, JournalsSpecialized: Outdoor, Transit, Direct Mail, Internet

ADVERTISING STRATEGYADVERTISING STRATEGY

• RELATIVE STRENGTHS AND WEAKNESSES OF STRATEGIESEffectiveness and Efficiency: Reach and

FrequencyTarget CapabilitiesCostBelievabilityAppropriateness for Message (Image, Details)

• RELATIVE STRENGTHS AND WEAKNESSES OF STRATEGIESEffectiveness and Efficiency: Reach and

FrequencyTarget CapabilitiesCostBelievabilityAppropriateness for Message (Image, Details)

Reach & Frequency

• Reach: number of different target consumers who are exposed to a message at least once during a specific period of time

• Frequency: number of times an individual is exposed to a given message during a specific period of time

• Cost per contact: cost of reaching one member of the target market– Allows comparison across advertising strategy

vehicles

EVALUATING ADVERTISING EFFECTIVENESS

PretestingPretesting

PosttestingPosttesting

Sales EffectivenessEvaluations

Sales EffectivenessEvaluations

Tools:•Focus Groups•Screening•Persuasion Scores

Tools:•Unaided Recall Tests•Aided Recall Tests•Inquiry Evaluations

Tools:•Monitor Sales

PUBLIC RELATIONSPUBLIC RELATIONS

• EFFORTS TO IMPROVE AND MANAGE RELATIONSHIPS WITH PUBLICSCustomersStock HoldersCommunityGovernmentNews Media

• PROACTIVE vs. REACTIVEDuPont vs. Exxon

• PUBLICITYNot Overtly SponsoredHigh Credibility

• EFFORTS TO IMPROVE AND MANAGE RELATIONSHIPS WITH PUBLICSCustomersStock HoldersCommunityGovernmentNews Media

• PROACTIVE vs. REACTIVEDuPont vs. Exxon

• PUBLICITYNot Overtly SponsoredHigh Credibility

PUBLIC RELATIONS

Press RelationsPress

Relations

Product PromotionsProduct

PromotionsAdvising

ManagementAdvising

Management

CorporateCommunications

CorporateCommunicationsLobbying Lobbying

Public Relations Functions

Personal Selling

• PERSONAL SELLING– Oral presentation in a conversation with one or more

prospective purchasers for the purpose of making a sale

– Personal selling represents the most popular promotional effort in terms of financial expenditures and number of people employed

– Personal Selling is:• (1) Dyadic, (2) Flexible, (3) Focused (personalized), and (4)

Often results directly in a sale• Other promotional elements move the customer toward the

sale, personal selling closes the sale

PERSONAL SELLING AND SALES MANAGEMENT

PERSONAL SELLING AND SALES MANAGEMENT

• FUNCTIONS AND CONTRIBUTIONS OF PERSONAL SELLING“Boundary Spanner” Role, Relationship

Management (Trust)Two-Way Information Channel (Diffusion

of Product and Market Information)Facilitate Exchange

• FUNCTIONS AND CONTRIBUTIONS OF PERSONAL SELLING“Boundary Spanner” Role, Relationship

Management (Trust)Two-Way Information Channel (Diffusion

of Product and Market Information)Facilitate Exchange

THE MARKETING-COMMUNICATIONS MIX:Relative Emphasis in Consumer and Business Markets

BUSINESS MARKETS CONSUMER MARKETS

SALESFORCE

SALESFORCE

ADVERTISINGPROMOTIONSDIRECT MKT.

ADVERTISINGPROMOTIONSDIRECT MKT.

EMPHASIS EMPHASIS

COMPLEMENT

PERSONAL SELLING AND SALES MANAGEMENT

PERSONAL SELLING AND SALES MANAGEMENT

• ROLES OF SALESPERSONPsychologistConsultantEducator / TeacherProblem SolverTeam Leader

• TYPES OF SELLING POSITIONSNew Business (Prospector)Existing Business (Order Taker)Detailing Support (Marketing, Technical)

• ROLES OF SALESPERSONPsychologistConsultantEducator / TeacherProblem SolverTeam Leader

• TYPES OF SELLING POSITIONSNew Business (Prospector)Existing Business (Order Taker)Detailing Support (Marketing, Technical)

STEPS IN THE SELLING PROCESS: A RELATIONSHIP APPROACH

STEPS IN THE SELLING PROCESS: A RELATIONSHIP APPROACH

• INITIATING RELATIONSHIPSProspectingPre-Call PlanningApproach

• DEVELOPING CUSTOMER RELATIONSHIPSSales Communications and PresentationsGaining and Managing Commitment

• ENHANCING CUSTOMER RELATIONSHIPSFollow-UpSupport

• TRADITIONAL vs. RELATIONSHIP APPROACHES• Consultative (needs-satisfaction) vs. Manipulative (product-focused)

• INITIATING RELATIONSHIPSProspectingPre-Call PlanningApproach

• DEVELOPING CUSTOMER RELATIONSHIPSSales Communications and PresentationsGaining and Managing Commitment

• ENHANCING CUSTOMER RELATIONSHIPSFollow-UpSupport

• TRADITIONAL vs. RELATIONSHIP APPROACHES• Consultative (needs-satisfaction) vs. Manipulative (product-focused)

SALES MANAGEMENT ISSUESSALES MANAGEMENT ISSUES

• RECRUITING AND HIRINGDifficult to Predict Success

• DEPLOYMENTTerritory Design

• AUTOMATIONUse of Technology to Link Buyer, Salesperson, and

Organizations (Customer Relationship Management and Supply Chain Management)

• EVALUATION AND COMPENSATIONOutcome-Based vs. Behavior-Based

• RECRUITING AND HIRINGDifficult to Predict Success

• DEPLOYMENTTerritory Design

• AUTOMATIONUse of Technology to Link Buyer, Salesperson, and

Organizations (Customer Relationship Management and Supply Chain Management)

• EVALUATION AND COMPENSATIONOutcome-Based vs. Behavior-Based

Sales Promotion

• SALES PROMOTION– Those marketing activities - other than

advertising, public relations/publicity, and personal selling - that stimulate consumer purchasing and dealer effectiveness

• Displays, shows and exhibitions, coupons, contests, samples

THE GROWTH IN SALES PROMOTION

Consumer FactorsConsumer Factors

AccountabilityAccountability

Increased Retail PowerIncreased Retail Power

Impact of TechnologyImpact of Technology

Short-Term FocusShort-Term Focus

Reasons for the Growth in Sales Promotion:

StimulateTrial

SupportFlexible Pricing

IncreaseConsumption

NeutralizeCompetitors

ComplementaryProducts

EncourageRepurchase

ImpulsePurchasing

OBJECTIVES OF CONSUMER PROMOTIONS

CONSUMER SALES PROMOTION TECHNIQUES

Price Deals

AdvertisingSpecialties Coupons

Sampling Rebates

Contests, Games,Sweepstakes

Premiums Cross-Promotions

OBJECTIVES OF TRADE PROMOTIONS

Increase ResellerInventory

InfluencePrice Discount

Defend AgainstCompetitors

Avoid PriceReductions

InfluenceReseller Promotion

Gain/MaintainDistribution

Increase ResellerInventory

InfluencePrice Discount

Defend AgainstCompetitors

Avoid PriceReductions

InfluenceReseller Promotion

Gain/MaintainDistribution

LIMITATIONS OF SALES PROMOTION

Cannot Reverse Declining Sales Trend

Cannot Reverse Declining Sales Trend

Cannot Overcome Inferior Product

Cannot Overcome Inferior Product

May Encourage Competitive Retaliation

May Encourage Competitive Retaliation

May Hurt ProfitMay Hurt Profit

Direct Marketing

• Techniques used to get consumers to make a purchase from their home, office or other nonretail setting– Direct mail, catalogs, mail order,

telemarketing, electronic retailing

TECHNIQUES OF DIRECT MARKETING

ElectronicMedia

ElectronicMedia

Direct SellingDirect Selling

PrintMedia

PrintMedia

BroadcastMedia

BroadcastMedia

Direct MailDirect Mail

TelemarketingTelemarketing