Principles of Marketing- Chapter 16

Four elements of the Promotion Mix
Personal Selling, Advertising, Public Relations, Sales Promotion
Integrated Marketing Communications
Coordination of promotion and other marketing efforts to ensure maximum informational and persuasive impact on customers
Six things that make ICM increasingly accepted
Coordinate/manage promotional efforts
Synchronization of promotional elements
Use more precisely targeted promotional tools
Consistent message to customers
Use of database marketing
Protect consumer privacy
Communications
A sharing of meaning through the transmission of information
Source
A person, group, or organization with a meaning it attempts to share with a receiver/audience
Receiver
The individual, group, or organization that decodes a coded message
An audience is two or more receivers
Coding process (Encoding)
Converting meaning into a series of
signs or symbols
The Communication Process
Source> Coded Message >Communications Chanel> Decoded Message>Receiver/Audience>Feedback to the Source
Communications channel
The medium of transmission that carries the coded message from the source to the receiver/audience
Decoding Process
Converting signs and symbols into concepts and ideas
Noise
Anything that reduces a communication’s clarity and accuracy
Feedback
Receiver’s response to a decoded message
Promotion
Communication that builds and maintains favorable relationships by informing and persuading one or more audiences to view an organization positively and to accept its products
Promotion’s goal:
to stimulate product demand and build customer relationships
True/ False: Most organizations expend a large amount of resources on promotion
True
Advertising
A paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media
Advertising is changing as _________ is changing
mass media consumption habits
The internet/ digital media aim at _____ audiences
Smaller, more targeted
Advertising is ____ and can reach _____ audiences
Flexible, large or small
Advantages of Advertising
Cost-efficient when it reaches a large number of people at a low cost per person
It lets the source repeat the message several times
Visibility gained from advertising can enhance a firm’s image
Disadvantages of Advertising
Absolute dollar outlay is high
Rarely provides rapid feedback
Difficult to measure its effect on sales
Less persuasive than personal selling
Generally limited time exposure
Public Relations
A broad set of communication efforts used to create/maintain favorable relationships between an organization and its stakeholders
Publicity
a non-personal communication in a news-story form about an organization, its products, or both
Is transmitted through a mass medium at no charge
Public relations should be viewed as
an ongoing program during
crisis and good times
Public Relations tools
Publicity
Annual reports
Brochures
Event sponsorships
Sponsorship of socially responsible programs
Press releases/Conferences/Feature articles
Personal Selling
A paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation
Advantages of Personal Selling
A more specific form of advertising
Has a greater impact on consumers
Provides immediate feedback
Disadvantages of Personal Selling
Expensive
Labor intensive
Time consuming
Types of Interpersonal Communications
Kinesic, Proximic, Tactile
Kinesic
Body language; communicating through movement of the head, eyes, arms, hands, legs, or torso
Proximic
Communicating by varying the physical distance between two parties in face-to-face interactions
Tactile
Communication through touching
Sales Promotion
A activity or material that acts as a direct inducement, offering adding value or incentive to resellers, salespeople, or customers
Examples of Sales Promotion
Free samples
Games
Rebates
Sweepstakes
Contests
Premiums
Coupons
Objectives of Promotion
Create Awareness
Stimulate Demand
Encourage Product Trail
Identify Prospects
Retain Loyal Customers
Facilitate reseller support
Combat Competitive Promotional Efforts
Reduce Sales Fluctuations
_______is crucial to initiating the product adoption process for new products
Awareness
Create Awareness for:
For existing products, promotional efforts create increased awareness of brands, product features, image-related issues, or operational characteristics
*Primary Demand
Demand for a product category rather than a specific brand
*Secondary Demand
Demand for a specific brand
Encourage Product Trail
If customers stall in the evaluation stage, marketers can use methods to encourage product trial in order to move them to adoption
Product Trail Techniques:
Free samples
Coupons
Test drives
Limited free-use offers
Contests
Games
Identifying prospects
Some promotional efforts aim to locate and identify customers who are interested in the firm’s products and are most likely to buy
Techniques Include: Toll Free Number, Direct Response Information form
The organization should follow up with prospects
True/False: A main goal in marketing is to maintain long-term customers
True
Keeping current customers is less/more costly than acquiring new customers
less
Retention techniques of maintaing loyal customers
Frequent-user programs
Special offers for existing customers
Online communications
Customer-only events
Sweepstakes
Strong relationships with resellers are important to an organization’s ability to maintain:
a sustainable competitive advantage
Various promotional methods to facilitate reseller suport
Resellers view promotion as a form of support
Share promotional expense
Special offers/buying allowances
Promotional activities may aim to______ the effect of a competitor’s promotional and marketing programs
–This type of promotional activity does not necessarily increase sales or market share
–An Example: “This is our State”
offset or lessen
A _____ is often used by firms in highly competitive consumer markets
combative promotional objective
A business cannot operate at peak efficiency when:
Examples:
Holidays
Seasonal products
sales fluctuate rapidly
_____are often designed to stimulate sales during slumps.–An Example is “Butterball.come” a website for recipes during the holidays
Promotional activities
Selecting Promotion Mix Elements
Resources & objectives
Characteristics of the target market
Characteristics of the product
Cost and availability of promotional methods
Push and pull channel policies
Promotional Resources, Objectives, and Policies
The size of an organization’s promotional budget affects the number and intensity of promotional methods used
Characteristics of a target market
Size
Geographic Distribution
Demographic Characteristics
Size
Often drives which promotional elements are chosen
Small target markets often rely on personal selling
Geographic Distribution
Personal selling is feasible when customers are concentrated in a small area
Dispersed customers often best reached with advertising
Demographic Characteristics
Age, income, education, etc. will affect consumers’ media consumption patterns and are important considerations when developing the promotion mix
Business products concentrate on:
Personal selling
Sales promotion
Consumer products concentrate on
Convenience goods = advertising
Durables and expensive products = personal selling
Both = public relations
___ and ____ use are important factors of Characteristics of Products
Product price and product
Intensive distribution
Advertising, sales promotion
Selective distribution
Promotion mixes may vary
Exclusive distribution
Personal selling
National advertising/Sales promotion
Have higher expenses but low cost per individual
International promotion
Can be difficult because of lack of promotional channels
Personal selling
Is dependent on recruiting and hiring qualified salespeople
Push Policy
Promoting a product to the next institution down the marketing channel
Pull Policy
Promoting a product directly to consumers in order to develop strong consumer demand
Is it possible for organizations to use both the push policy and the pull policy at the same time?
Yes
Word-of-mouth (WOM) communication:
Personal, informal exchanges of communication that customers share with one another about products, brands, and companies
Most customers are likely to be influenced by ____ when making purchases
friends and family members
_____is becoming increasingly important and
Is most effective for new-to-market and expensive products
Effective WOM communication
*Buzz marketing
An attempt to incite publicity and public excitement surrounding a product through a creative event
*Viral marketing
A strategy to get consumers to share a marketer’s message, often through email or online video, in a way that spreads dramatically and quickly
Product Placement
A form of advertising that strategically locates products or product promotions within entertainment media to reach a product’s target market
____ have become a successful method of reaching consumers
In-program product placements
Product Placement
Has become more important as more consumers bypass advertisements through DV-R, TiVo, and the Internet and is Increasing in popularity internationally
utilized product placement in the movie The Social Network
GAP
*A website talked about in class where you can look up the most popular brands/ which movies these brands were shown in through “product placement”
Brand Channel.com
*A website talked about in class that shows the most recent viral videos and how many hits they received. (An example of “Viral Marketing”
Visible Measures.com
Point of purchase displays
Marketing materials or advertising placed next to the merchandise it is promoting. These items are generally located at the checkout area or other location where the purchase decision is made.
Talked about in class – demand- an example of something everyone has to have
Milk mustache
Talked about in class- Things you see that make you want to buy the product
Jennifer Anniston- Smart Water
Energizer Bunny- batteries
*Talked about in class- A well known marketing icon that failed within the first year due to weak fundamentals
The puppet dog from Pets.com