Using Effective Promotions Chapter 16 Using Effective Promotions McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

PROMOTION in an ORGANIZATION Promotion Mix -- The combination of promotional tools an organization uses. The traditional mix includes: See Learning Goal 1: Identify the new and traditional tools that make up the promotion mix. 16-2

ADVERTISING See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media Advertising is different from public relations, since advertising is paid and public relations is free. 16-3

ADVERTISING in the FIRM Advertising -- Paid, non- personal communication through various media by organizations and individuals who are in some way indentified in the message. Major goals of advertising: Inform Persuade Remind See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media Advertising is different from public relations, since advertising is paid and public relations is free. 16-4

IMPACT of ADVERTISING Total advertising expenditures exceed $241 billion yearly. Consumers benefit because production costs of TV programs, radio programs, newspapers and magazines are paid for by advertisers. Marketers choose ad media that will reach the target market. See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media 16-5

SOCIAL ADVERTISING Social media advertising is growing so fast, marketers can’t keep up. Starbucks has over 12 million followers on Twitter. McDonald’s has over 7 million fans on Facebook. See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media 16-6

MATCH GAME Match the Company with the Slogan “Everybody doesn’t like something, but nobody doesn’t like ___________.” “It takes a licking and keeps on ticking.” “With a name like _________, it has to be good.” “Good to the last drop.” “Betcha can’t eat just one!” See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media Match Game This slide represents a few of the most recognized taglines in the U.S. It will be interesting to see how many students recognizes the taglines. Ask students: Do you know what products these taglines represent? Taglines are very important to a company’s advertising message. Companies want people to respond to their message, therefore these taglines must tell an individual how the product benefits them. Sara Lee GE Timex Smuckers Maxwell House Lays L'Oreal 16-7

POPULAR ADVERTISING MEDIA TV advertising is still the dominant media. Digital Video Recorders (DVRs) challenge TV advertising because viewers can skip ads. Product Placement -- Advertisers pay to put their products into TV shows and movies where the audience will see them. See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media 16-8

INFOMERCIALS and ONLINE ADVERTISING Infomercial -- A full length TV program devoted exclusively to promote a particular product. Online Ads are attempts to get potential customers to a web site to learn about a product. See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media Infomercials are expected to rise to over $170 billion in 2014. 16-9

INFOMERCIAL HALL of FAME The Biggest Hits Over the Past 40 Years Veg-O-Matic Ginsu Knives The Clapper Thigh Master George Foreman Grill Bowflex See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media Infomercial Hall of Fame This slide presents the biggest infomercial hits over the past 40 years. Ask students: Why are infomercials on the air? (Simple, they work. It is estimated that infomercials make up 25 percent of all television commercials and that 66 percent of adults have watched them.) The following link is from YouTube and features the top ten worst infomercials of all time. Students love to watch this video and laugh at some of the products featured. (http://www.youtube.com/watch?v=duaiVk_aRgQ) Source: Fortune, www.fortune.com, accessed July 2011. 16-10

MONITORING AD EFFECTIVENESS Dr. Pepper posts messages on Facebook and monitors the results from their over 8.5 million fans. Richard Branson tweets his customer base to maintain two-way communication. See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media Photo Courtesy of: Brent Moore 16-11

ADVERTISING GLOBALLY See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media Culturally sensitive advertising is key to successful international marketing. 16-12

ADVERTISING EXPENDITURE by MEDIA in $ MILLIONS Rank Media Projected 2013 Spending 1 Direct Mail $52.3 2 Broadcast TV 36.8 3 Newspaper 23.4 4 Cable TV 27 5 Radio 15.9 6 Yellow Pages 11.9 7 Consumer Magazine 9.1 8 Internet 25.3 Other 39.7 Total 241.4 See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media Before showing this slide ask students to guess the top five forms of advertising. 16-13

GLOBAL ADVERTISING STRATEGY Globalism requires marketers to develop a single product and promotional strategy to implement worldwide. Problems can arise in global markets with using one advertising campaign in all countries - especially bad translations. See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media Culturally sensitive advertising is key to successful international marketing. 16-14

REGIONAL ADVERTISING STRATEGY Regionalism – specific ads for each country or for specific groups within a country. (most effective) See Learning Goal 2: Contrast the advantages and disadvantages of various advertising media, including the Internet and social media Culturally sensitive advertising is key to successful international marketing. 16-15

PERSONAL SELLING See Learning Goal 3: Illustrate the steps of the B2B and B2C selling processes. Selling is about more than trying to convince someone to buy a product; it is about listening to the needs of the customer. 16-16

PERSONAL SELLING Personal Selling -- The face-to-face presentation and promotion of a product, including the salesperson’s search for new prospects and follow- up service. See Learning Goal 3: Illustrate the steps of the B2B and B2C selling processes. Selling is about more than trying to convince someone to buy a product; it is about listening to the needs of the customer. 16-17

STEPS in the B2B SELLING PROCESS Prospect and qualify See Learning Goal 3: Illustrate the steps of the B2B and B2C selling processes. 16-18

PROSPECTING and QUALIFYING in SELLING Prospecting -- Researching potential buyers and choosing those most likely to buy. Qualifying -- Making sure customers have a need for a product, the authority to buy and the willingness to listen to a sales message. Prospect -- A customer who meets the qualifying criteria. See Learning Goal 3: Illustrate the steps of the B2B and B2C selling processes. A key to B2B selling is qualifying customers, so that time is not wasted on customers who do not have a need. 16-19

STEPS in the B2B SELLING PROCESS Approach Make a presentation Answer objections Close the sale Trial Close -- A statement or question that moves the process toward the purchase. Follow up See Learning Goal 3: Illustrate the steps of the B2B and B2C selling processes. 16-20

STEPS in the B2C SELLING PROCESS See Learning Goal 3: Illustrate the steps of the B2B and B2C selling processes. 16-21

USING PUBLIC RELATIONS in PROMOTION See Learning Goal 4: Describe the role of the public relations department, and show how publicity fits in that role. 16-22

USING PUBLIC RELATIONS in PROMOTION Public Relations (PR) -- Evaluates public attitudes, changes policies and procedures in response to the public, and executes a program of action and information to earn public understanding and acceptance. 3 steps of a good PR program: Listen to the public Change policies and procedures Inform people that organization is responsive to their needs See Learning Goal 4: Describe the role of the public relations department, and show how publicity fits in that role. 16-23

PUBLICITY Publicity -- Any information about an individual, product or organization that’s distributed to the public through the media and is not paid for or controlled by the seller. See Learning Goal 4: Describe the role of the public relations department, and show how publicity fits in that role. 16-24

ADVANTAGES of PUBLICITY Free Reaches people who would not look at an advertisement More believable than advertising See Learning Goal 4: Describe the role of the public relations department, and show how publicity fits in that role. 16-25

DISADVANTAGES of PUBLICITY No control over whether the media will use a story or when they may release it. Once a story has been run, it is not likely to run again. There is such a thing as bad publicity. See Learning Goal 4: Describe the role of the public relations department, and show how publicity fits in that role. 16-26

SALES PROMOTIONS See Learning Goal 5: Assess the effectiveness of various forms of sales promotion, including sampling. 16-27

SALES PROMOTIONS Sales Promotion -- The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities. See Learning Goal 5: Assess the effectiveness of various forms of sales promotion, including sampling. 16-28

SOME KEY CONSUMER SALES PROMOTIONS Coupons Demonstrations Sampling Sweepstakes In-store Displays Contests See Learning Goal 5: Assess the effectiveness of various forms of sales promotion, including sampling. Information in this slide is based on Figure 16.8 on p. 452. Other forms of promotion listed in the figure are: cents-off promotions, premiums, bonuses, catalogs, special events and lotteries. Promotion needs to tie into the overall marketing strategy of the product being sold. 16-29

USING WORD-of-MOUTH PROMOTION Word-of-Mouth Promotion -- People tell others about products they have purchased. Word-of-Mouth is important for products like: Restaurants Daycare and Eldercare Car Repair Shops Hair Stylists Hotels See Learning Goal 5: Assess the effectiveness of various forms of sales promotion, including sampling. 16-30

EMERGING PROMOTIONAL TOOLS Viral Marketing -- Paying customers to say positive things on the Internet or setting up multiple selling schemes whereby consumers get commissions. People who promote through viral marketing often receive SWAG which can include free tickets, shirts, and other merchandise. See Learning Goal 6: Show how word of mouth, e-mail marketing, viral marketing, blogging, podcasting, and mobile marketing work. 16-31

PUSH, PULL, PROMOTIONAL STRATEGIES Convince wholesalers and retailers to stock and sell Producer uses trade discounts, personal selling, cooperative advertising to convince the intermediaries Idea is to push the product through the distribution system to the stores Heavy advertisements and sales promotion efforts Directed at consumers so that they will request the products from retailers Products are pulled down through the distribution system See Learning Goal 6: Show how word of mouth, e-mail marketing, viral marketing, blogging, podcasting, and mobile marketing work. 16-35

MANAGING THE PROMOTION MIX Large, homogeneous groups of consumers are best reached through ADVERTISING Large organizations are best reached through PERSONAL SELLING SALES PROMOTION motivates to buy now PUBLICITY adds support and creates a good impression WORD OF MOUTH is often the most powerful promotional tool See Learning Goal 6: Show how word of mouth, e-mail marketing, viral marketing, blogging, podcasting, and mobile marketing work. Tweeting, blogging, and podcasting are rapidly changing how products are promoted. 16-36

INTEGRATED MARKETING COMMUNICATION (IMC) Integrated Marketing Communication (IMC) -- Combines the promotional tools into one comprehensive strategy. IMC is used to: Create a positive brand image. Meet the needs of consumers. Meet the strategic marketing and promotional goals of the firm. See Learning Goal 1: Identify the new and traditional tools that make up the promotion mix. Emphasis today is on integrating traditional media with social media. 16-37