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Advertising Personal Selling

Sales Promotion Public Relations Direct Marketing

Reaches large,geographically dispersedaudiences, often withhigh frequency

Low cost per exposure,though overall costs arehigh

Consumers perceiveadvertised goods as morelegitimate

Dramatizescompany/brand

Builds brand image; may

stimulate short-termsales

Impersonal; one-waycommunication

15 -1

PromotionPromotion

ToolsTools

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Advertising

PersonalSelling

Sales Promotion

Public Relations

Direct Marketing

Most effective tool forbuilding buyerspreferences, convictions,and actions

Personal interactionallows for feedback andadjustments

Relationship-oriented

Buyers are moreattentive

Sales force represents along-term commitment

Most expensive of thepromotional tools

15 -2

PromotionPromotionToolsTools

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Advertising

Personal Selling

SalesPromotion

Public Relations

Direct Marketing

May be targeted at thetrade or ultimateconsumer

Makes use of a variety offormats: premiums,coupons, contests, etc.

Attracts attention, offers

strong purchaseincentives, dramatizesoffers, boosts saggingsales

Stimulates quickresponse

Short-lived

Not effective at buildinglong-term brandpreferences

15 -3


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Advertising Personal Selling Sales

Promotion PublicRelations

DirectMarketing

Highly credible

Many forms: newsstories, news features,events andsponsorships, etc.

Reaches manyprospects missed via

other forms ofpromotion

Dramatizes companyor benefits

Often the most

underused element inthe promotional mix

15 -4

PromotionPromotion

ToolsTools

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Advertising

Personal Selling

SalesPromotion

Public Relations

DirectMarketing

( If IMC is referred)

Many forms:Telephone marketing,direct mail, onlinemarketing, etc.

Four distinctivecharacteristics:

Nonpublic

Immediate

Customized

Interactive

Well-suited to highlytargeted marketingefforts

15 -5


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Promotion Mix Strategies Push strategy: trade promotions and

personal selling efforts push theproduct through the distribution

channels.

Pull strategy:producers useadvertising and consumer sales

promotions to generate strongconsumer demand for products.

15 -6

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Advertising and Sales Promotion Avoid false and deceptive advertising

Trade promotions can not favor certaincustomers over others

Use advertising to promote socially

responsible programs and actions

15 -8

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Personal Selling

Salespeople must follow the rules offair competition

Three day cooling-off rule protectsultimate consumers from high

pressure tactics Business-to-business selling Bribery, industrial espionage, and

making false and disparaging statements

about a competitor are forbidden

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Sales Promotion

15 - 10

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What is Sales Promotion?What is Sales Promotion?

Mass communication technique that offersshort-term incentives to encouragepurchase or sales of a goods or service.

Three Target Groups

1) Consumer Promotion2) Trade Promotion

3) Sales force Promotion

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What is Sales Promotion?What is Sales Promotion?

Rapid growth in the industry has beenachieved because:

Product managers are facing morepressure to increase their current sales,

Companies face more competition, Advertising efficiency has declined, Consumers have become more deal

oriented.

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Point-of-Purchase

Displays

Point-of-Purchase

Displays

Consumer - Promotion Tools

PremiumsPremiums

Price PacksPrice Packs

Cash RefundsCash Refunds

CouponsCoupons

SamplesSamples

Short-Term Incentives to Encourage Purchase

or Sales of a Product or Service.

Consumer-PromotionObjectives

Consumer-Promotion Tools

PatronageRewards

PatronageRewards

GamesGames

SweepstakesSweepstakes

ContestsContests

Advertising

Specialties

Advertising

SpecialtiesPatronageRewards

Entice Consumers to

Try a New Product

Entice Consumers toTry a New Product

Lure Customers AwayFrom Competitors Products

Lure Customers AwayFrom Competitors Products

Get Consumers to Load Upon a Mature Product

Get Consumers to Load Upon a Mature Product

Hold & Reward Loyal

Customers

Hold & Reward Loyal

CustomersConsumer Relationship

Building

Consumer RelationshipBuilding

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Specialty

Advertising

Items

Specialty

Advertising

Items

Trade - Promotion ToolsTrade - Promotion Tools

ContestsContests

Free GoodsFree Goods

Buy-Back

Guarantees

Buy-Back

Guarantees

AllowancesAllowances

Price-OffsPrice-Offs

Short-Term Incentives That are Directed toRetailers and Wholesalers.

Trade-PromotionObjectives

Trade-PromotionTools

PatronageRewards

PatronageRewards

Push MoneyPush Money

DiscountsDiscounts

PremiumsPremiums

Displays

Persuade Retailers or

Wholesalers to Carry a Brand

Persuade Retailers orWholesalers to Carry a Brand

Give a Brand Shelf SpaceGive a Brand Shelf Space

Promote a Brand inAdvertising

Promote a Brand inAdvertising

Push a Brand to ConsumersPush a Brand to Consumers

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Business - Promotion ToolsBusiness - Promotion Tools

Short-Term Incentives That are Directed to

Industrial Customers.

Business-PromotionObjectives

Business-Promotion Tools

Generate Business LeadsGenerate Business Leads

Stimulate PurchasesStimulate Purchases

Reward CustomersReward Customers

Motivate SalespeopleMotivate Salespeople

ConventionsConventions

Trade ShowsTrade Shows

Sales ContestsSales Contests

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Sales-force Promotion:Bonuses, Contest andRallies . Best salesman of the YearAward Trip to Europe or USfor best performers.

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Decide on the Size of the IncentiveDecide on the Size of the Incentive

Set Conditions for ParticipationSet Conditions for Participation

Evaluate the ProgramEvaluate the Program

Determine How to Promote andDistribute the Promotion Program

Determine How to Promote andDistribute the Promotion Program

Determine the Length of the ProgramDetermine the Length of the Program

Developing the Sales Promotion

Program

Developing the Sales Promotion

Program

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Sales Promotions

Sales promotion spurs action

and must complementadvertising

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Sales Promotion

An extra incentive to buy

An acceleration tool

Targeted to different parties

An inducement to intermediaries

A direct inducement that offers an extra

value or incentive for the product to thesales force, distributors, or the ultimate

consumer with the primary objective of

creating an immediate sale.

A direct inducement that offers an extra

value or incentive for the product to thesales force, distributors, or the ultimate

consumer with the primary objective of

creating an immediate sale.

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Reasons for Increase in SalesPromotion

Growing Power of Retailers

Declining Brand Loyalty

Increased Promotional Sensitivity

Brand Proliferation

Fragmentation of Consumer Markets

Short-Term Focus

Increased AccountabilityCompetition

Clutter

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Sales Promotion Uses

Introduce new products by encouraging trial andrepurchase

Get existing customers to buy more

Attract new customers

Defend current customers

Maintain sales in off season

Target a specific market segment

Enhance IMC efforts and build brand equity (brandcan cheapen if SP is not designed to reinforce

the brand positioning)

If advertising spends are reduced to increase SalesPromotions it can erode brand franchise andimage (commodity / parity product image)

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Frequency programs

Sales Promotion Vehicles

Consumer-Oriented

Samples

Coupons

Premiums

Contests/sweepstakes

Refunds/rebates

Bonus packs

Price-off deals

Event marketing

Trade-Oriented

Contests, dealer incentives

Trade allowances

Point-of-purchase displays

Training programs

Trade shows

Cooperative advertising

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Objectives of Consumer-Oriented Sales Promotion

To Obtain Trial and Repurchase

To Increase Consumption of anEstablished Brand

To Defend (Maintain) CurrentCustomers

To Target a Specific Segment

Enhance IMC programs and buildbrand equity

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Advantages and Limitations ofCoupons

Advantages: Appeal to price

sensitive consumer

Can offer price break

without retailers coop

Can be effective way

to induce trial of new ofexisting products

Can be a way to defend

market share andencourage repurchase

Disadvantages Difficult to determine

how many consumerswill use coupons andwhen

Coupons are often usedby loyal consumers whomay purchase anyway

Declining redemptionrates and high costs of

couponing Misredemption and

fraud

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Distribution of Coupons

Through ads, DM / press / on-pack and also by the scanner tocompetitive brand users

Coupon ads should - Reinforce the positioning - highlight brand strength and key benefits

emphasised in the ad

Be convenient to clip, show package prominently and have the

mandatory legal copy Placed in /on packto build repeat purchase & loyalty

Placed on other products Cross-ruff to attract newcustomers

DM coupons are more targeted, have higher redemption

Scanner dispensed coupons attract other brand users

Cash rebates (on durables) on proof of purchase

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Coupon Fraud

Consumers redeem withoutpurchase

Clerks and staff exchange forcash

Managers/owners redeemwithout sale

Criminals collect or counterfeitand sell

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Coupon Trends

Major companies cutting back onuse of coupons

Searching for more effectivecoupon techniques

More use of internet fordistribution

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Sampling

Sampling works best when:

The products are of relatively low unit value, so

samples dont cost much The purchase cycle is relatively short so the

consumer can purchase in a relatively short timeperiod

The products are divisible and can be brokeninto small sizes that can reflect the productsfeatures and benefits

There is enough quantity for the consumer totry a product, (but keep packaging & mailing

expenses down)

Providing consumer with some

quantity of a product for no chargeto induce trial

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Sampling Methods

Door-to-door

Direct mail

In-store sampling

Cross-product samplingWith newspaper or magazine

Through the internet

Sampling is more effective after an introductory

set of ads giving a toll free number to call forsamples

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Premiums

Two types of premiums: (in pack / mailed onproof of purchase at no cost)

Free premiums -

only require purchase of the product

Self-liquidating premiums -

require consumer to pay some or all of the cost of the

premium Reinforces brand image

Builds repeat purchase / brand loyalty

Premium an offer of an item of

merchandiseor service either free or at a low

cost that

is an extra incentive for customers

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Contests and Sweepstakes

Contest a promotion whereconsumers compete for prizes or

money on the basis of skills or

ability. Winners are determined byjudging entries or ascertaining which

entry comes closes to some

predetermined criteria

Sweepstakes/games a promotionwhere winners are determined purely by

chance and cannot require a proof ofpurchase as a condition for entry.

Winners are determined

by random selection from the pool of

entries or generation

orce brands advertising platformif appropriat

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Other Popular Consumer SalesPromotion Tools

Price packs offer lower price than usual orgreater quantity than usualBonus Packs For value enhancing items more

quantity packs are better than price-offspromotions

Price-off deals - Induces switching and reinforces

loyalty

Refunds and Rebates

Event marketing

Frequency/loyalty programs

Subsidised financing / Reduced EMI incentive for durables

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N f hi B ildi ( FB)

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Nonfranchise-Building (non-FB)Promotions

Non-FB Promotions May Include Price-off deals Bonus packs Rebates or refunds

Non-FB Promotions shortcomings Trade promotions benefits may not reach customers Customers may buy on the basis of price rather than

brand equity Do not encourage the development of brand loyalty

Nonfranchise-building promotions -Accelerate the purchase decisionprocess and generate an immediatesales increase but do not contribute to

the building of brand identify and image

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Trade-Oriented Sales PromotionObjectives

Obtain Distribution of New Products

Maintain Trade Support for Existing Products

Encourage Retailers to Display and Promote ExistingBrand

Build Retail Inventories Stock and buy more stocks Move goods from warehouse to shelf

Can erode brand franchise & image if advertising spendsare reduced (commodity / parity product image) or is

not brand enhancing

Types of Trade Oriented

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Types of Trade-OrientedPromotions

Contests and IncentivesTrade Allowances

Buying Allowances

Promotional Allowances

Slotting Allowances

Point-of-Purchase Displays

Sales Training Programs

Trade ShowsCooperative Advertising

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Trade Allowances

Off-invoice / buying allowance

Count-recount allowances

Billback allowances

Display allowances in-ad grocer coupon

Slotting and facing allowances

Trade inventory financing and delayed

billing Sweepstakes, contests, etc for retail sales

people

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Trade Allowances

Off-invoice or buying allowance - % price-cutapplied to volumes purchased during promotionalperiod. (Free goods may be offered instead)Applies Push pressure to sell stocks picked-up

Count-recount allowances for shifting thestocks from the warehouse to the shelf Pressure to pass the price cut to the consumer

Billback allowances allowance paid if certainperformance criteria is met For Displays Ads in retailer publications etc

Display allowances - to display productsprominently Time pressed customers pick up brands made salient

this way

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Trade Allowances

In-ad grocer coupon - in the retailerscircular. Co pays for coupon face-value &handling costs

Slotting & facing allowances one time feepaid to place new brand on shelf to cover costof space, admn. & risk

Trade inventory financing & delayed

billing - used for durables reduced ratefinancing / delayed billing

Sweepstakes, contests for retail salespeople. Timed to run along with sales promos

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Problems with TradeAllowances

Marketers expect that the savings will be passed onto the consumer in the form of lower prices.However, the trade members often pocketdiscounts

Two practices that are particularly bothersome forward buying

and diverting

To deal with these trade problems, companieshave adopted a policy of

Everyday Low Pricing (EDLP) the list price is loweredand trade promotional allowances are reduced /eliminated

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Promotion Targeted to ResellerSalespeople

Product or program sales Selling a specific number of cases Selling a specific number of units Selling a specific number of promotional programs

New account placements Number of new accounts opened Number of new accounts ordering a minimum amount Promotional programs placed in new accounts

Merchandising efforts Establishing promotional programs Placing display racks, counter and other p-o-p displays

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Types of CooperativeAdvertising

Horizontal cooperate advertising

Ingredient-sponsored cooperativeadvertising

Vertical cooperative advertising

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Retailerspromotions

Consumer Promotions used byretailers to

clear inventory out of style, slow

moving, shelf-unstable products

C F hi B ildi

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CFB Promotional Objectives

Communicate distinctive brand attributesDevelop and reinforce brand identity that is

consistent with the image of the brand

Build long-term brand preference

Encourage repeat purchase and long-termpatronage

Engage active consumer involvement

Consumer Franchise-Building(CFB) Promotions

Consumer Franchise BuildingPromotions Communicate distinctive

brand attributes and contribute to the

development and reinforcement of

brand identity and image

Nonfranchise Building(non FB)

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Nonfranchise-Building(non-FB)Promotions

Non-FB Promotions May Include

Price-off deals Bonus packs Rebates or refunds

Non-FB Promotions shortcomings Trade promotions benefits may not reach

customers Customers may buy on the basis of price rather

than brand equity Do not encourage the development of brand

loyalty

Nonfranchise-building promotions -Accelerate the purchase decisionprocess and generate an immediatesales increase but do not contribute tothe building of brand identify and image

Th S l P ti

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AllOth

ers

MaintainPromotions

MaintainPromotions

Cut BackPromotions

Cut BackPromotions

Our Firm

We losemarket share

Same marketshare, profits

stay low

Higher profitsfor everyone

We gain inmarket share

The Sales PromotionDilemma

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Evaluation and Risks

Consumer Promotions Advtg and SP play a complementary role

and when run in tandem they yieldpowerful synergies

Delivers additional brand value and

Induces trial & repeat purchase

Breaks through clutter

SP can hurt the image of the brand equity if run in isolation of advertising

if poorly designed

if protracted - particularly true for highlyinvolvement, image & feeling products

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Evaluation-Risks

Trade Promotions Advtg. Campaign, Consumer SP and TP

if run in tandem yield powerful

synergies

TP erode brand franchise and image

leading to less leverage with the trade Because of less ad spend If promos are not brand enhancing

Coordinating Sales Promotion

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Coordinating Sales PromotionWith Other IMC Elements

Budget allocation - It depends on the promotional objectives of the campaign

the market and competitive situation

the brands stage in its life cycle

Media support and timing

Coordination of ad and promotion themes

Measuring effectiveness

Various IMC elements such asadvertising, direct marketing, Internet

and personal selling efforts need to be

coordinated with sales promotion to

create a synergistic effect. Must

consider:

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Direct Marketing

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13-53

Direct Marketing

Direct marketing consists of directconnections with carefully targetedindividual consumers to both obtain an

immediate response and cultivatelasting customer relationships.

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13-54

The New Direct-Marketing Model

Some firms use direct marketing as asupplemental medium.

For many companies, direct

marketing constitutes a new andcomplete model for doing business.

Some firms employ the direct modelas their onlyapproach.

Some see this as the new marketingmodel of the next millennium.

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Benefits of Direct Marketing

Benefits to Buyers:

Convenient

Easy to usePrivate

Ready access to products

and information

Immediate and interactive


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13-56


Benefits to Sellers:

Powerful tool for building customerrelationships

Can target small groups orindividuals

Can tailor offers to individual needs Can be timed to reach prospects at

just the right moment

Gives access to buyers they could

not reach through other channels Offers a low-cost, efficient way to

reach markets

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13-57

Customer Databases

An organized collection of comprehensive dataabout individual customers or prospects, includinggeographic, demographic, psychographic, andbehavioral data.

Databases can be used to identify prospects, tailorproducts, and maintain customer relationships

Database marketing requires substantialinvestment in hardware, software, personnel

F f Di t M k ti

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13-58

Forms of Direct Marketing

Direct-Mail Marketing

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13-59

Direct-Mail Marketing

Involves sending an offer,

announcement, reminder, or otheritem to a person at a particularaddress.

Accounts for a high proportion ofdirect-marketing sales.

Permits high target-market selectivity.

Personal and flexible. Easy to measure results.

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13-60

Catalog Marketing

With the Internet, more and morecatalogs going electronic.

Print catalogs still the primary

medium.

Harder to attract new customers withInternet catalogs.

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13-61

Direct-Response TV Marketing

Direct-Response Advertising

Infomercials

Home Shopping Channels

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13-62

Integrated Direct-Marketing

The use of carefullycoordinated multiple-media,multiple-stage campaigns.

Public Policy and Ethical Issues in

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13-63

Public Policy and Ethical Issues inDirect Marketing

Irritation to Consumers

Taking unfair advantage of impulsive

or less sophisticated buyers

Targeting TV-addicted shoppers

Deception, Fraud

Invasion of Privacy

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Direct Marketing

End

15 - 64

Creating a Public Relations Plan

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Creatinga

PR Plan

Creatinga

PR Plan


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Do these sound familiar?Do these sound familiar?

1. We notified everybody. Wesent a letter/memo out.

2. We tried some PR. We mailed

a press release Press kit.

3. Communication? Our newsletter

goes to over 50,000 people.4. Publicity? Lets do a public

service announcement.

5. Marketing: Weve distributed

over one Kazillion brochures!

Do these sound familiar?Do these sound familiar?


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ResearchResearch

Questions to ask

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Questions to ask

What makes your business unique?

How do people find out about your business? Do people perceive your business differently than you

perceive your business? Why? Why do users choose your business? Why do they

choose your competitor?

What are the values, lifestyles, interests of yourcustomers? What to they do for a living? Educationallevel? Are they happy? Disappointed?

Who are you communicating with the most? Whoshould you be communicating and relating with more?

Who is critical to your success? Why? How close areyou to them?


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Analysis

&Planning

Analysis

&Planning

Analyze data generated from

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questions or other collectioninstruments and develop a

planGOAL: To impact attitude, opinion,

behavior or action

FOCUS ON WHAT THE CUSTOMERVALUESIMPLEMENT STRATEGY: Best way to reach,

move, influence target audience

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Keep it personal; focus on opinion leaders

Segment! Segment! Segment!

Expand involvement in your business throughadvisory groups, sub-committees

Use community and local resources

Try something new! Explore ways to makenew technology more intimate

Use several channels to reach each audience

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bli l i d

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Public Relations Ideas

Student recognition award, bulletinboards, newspapers, etc.

Senior ID cards free admission to events

Adopt a student

Open House have students and parentspresent

Evening Meals business and professionalleaders

Parent conferences

P bli R l i Id

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Public Relations IdeasOpen shop possible one night per

weekPerforming student groups

Computerized assignment system

Shadow a studentOutside marquee

Letters to parents honor rolls

Publish Honor Rolls in newspapersGood conduct awards

P bli R l i Id

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Good news cards hand out to parents atevening meeting

Booster club meetings after ball games

Grandparents Day

Flowers to mothers on mothers day

Awards assemblies

Citizenship and Good Deeds day

P bli R l ti Id

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Announce student birthdays overmorning intercom

School picnic invite parents in forspecial activities

Students seen doing something goodMini-school for parents entire day

follow the schedule of their children

Senior citizen Thanksgiving dinner

Senior citizen Pen-Pal club

P bli R l ti Id

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Positive phone calls from teachers

Career day

School page in local newspaper

School web page

Give out school email addresses to parents

Web-based grading and homework sites

Parent-Advisory Committee

Joining community organizations (Rotary clubetc.)

P bli R l ti Id

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Speaking at community meetings(Homeowners Association meetings)

School renewal day

School-based enterprises

After-school day care

Opening the building after hours forcommunity use (scout meetings,computer lab use, library use)


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CommunicationCommunication

Hierarchy of Effective Communication

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1. One-to-one, face to face

2. Small group discussion/meeting

3. Speaking before a medium-sized groups4. Phone conversation

5. Hand-written, personal note

6. Typewritten, personal letter not generated by computer

7. Computer generated personal letter

8. Mass-produced, non-personalized letter9. Brochure or pamphlet sent out as a direct mail piece

10. Article in organizational newsletter, magazine, posters, etc.

11. New carried in popular press

12. Advertising in newspapers, radio, TV, magazines, posters, etc.

13. Other less effective forms of communication (billboards,skywriters, pens, give-aways, etc.)

It is the responsibility of an

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It is the responsibility of aneffective public relations

plan to forcecommunication up theladder of effectiveness,striving constantly to

narrow the audience to amanageable size, and todeliver the message on a

one-to-one basis

Fredrick Volkman, Washington UniversiFredrick Volkman, Washington Universi


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EvaluationEvaluation

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Avoid

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Avoid

Not using data in making decisionsNot reporting information; or not

developing reports that encourage

other to use informationMisinformation

Forgetting to tell people how to usethe information you collect ordiscover

Public Relations

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SummarySummary

Public Relations

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EssentialsEffective PR & Marketing means building

relationshipsIt is better to have many people involved in

your PR plan, understanding that efficiencymay suffer some, than to have one person do

everything perfectlyIf your PR & Marketing program isnt tied toyour organizations critical issues, you aregoing about it the wrong way

The best way to kill a bad product is toadvertise it

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Ambush Marketing

15 - 87

What is Ambush

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What is AmbushMarketing?

Generally defined as: marketing and promotional activities

that:

seek an association with a sponsoredevent

without the authorization or consent of the

organizer of the event or sponsor, and without paying the requisite fee

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ambush marketing?

Goal: to misappropriate or capitalize on the goodwill and

popularity of the sponsored event

intentionally confuse the public into thinking that the

ambush marketer is the official sponsor of the eventto deflect some attention away from the competing

sponsors

to reduce the effectiveness of their communication

while also undermining the value and the quality of the

sponsorship opportunity that was sold

Ambush Marketing?

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Ambush Marketing?

The result:

consumers may be confused as to who is the

official sponsor of the event

ambush marketing may impact negatively onsponsorship rights

Therefore:

sponsors seek some guarantee from theorganizer of the event that offenders will be

pursued (in the sponsorship agreement)

Forms ambush

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marketing Simultaneous promotions (for example:

sample/free product distribution at

sponsored event, billboard advertising or

flying blimp with advertisers mark over

venue) Purchase of sub-category rights (for

example: broadcast rights purchased

from a TV network from marketers who

are not official sponsors of the event forthe duration of the sponsored event)

Laws How did it work?

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Laws: How did it work?

No Olympic Pizza or Cake on salein Turin

No fly zone over sports venues Bar Olympic (pub in central

location) had to cover the logo

Same obligation for a sportsapparel and equipment shop

Special Teams

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Special Teams

How did it work?

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How did it work?

Despite huge efforts some teams run afoul

Logo on the helmet, duly covered

sp dm

Documents