Integrated Promotion Decisions Chapter 13 McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

13-2 The Promotion Mix: A Communication Toolkit Promotion decisions must consider the objectives the marketer has in mind, as well as the merits of and costs entailed in using different tools in the promotion mix. In making these decisions, the marketer is developing a promotional, or an integrated marketing communication (IMC) plan.

13-3 The Promotion Mix: A Communication Toolkit The principal tools from which a marketer can choose in developing an IMC plan are: –Advertising –Personal selling –Sales promotion –Public relations

13-4 Decision Sequence for Developing the Promotion Mix

13-5 Developing an Integrated Marketing Communications Plan Step 1: Define the audience(s) to be targeted –Three broad ways to segment both consumer and organizational markets: Who the customers are Where they are How they behave

13-6 Developing an Integrated Marketing Communications Plan Step 2: Set the promotional objectives. –SMART (Specific, Measurable, Attainable, Relevant, and Time-bound) –Good objectives should include: A statement defining the target audience. A statement of how some specific aspect(s) of the audiences perceptions, attitudes, or behavior should change. A statement of how quickly such a change is expected to occur. A statement of the degree of change required.

13-7 Developing an Integrated Marketing Communications Plan Step 3: Set the promotion budget –The percentage-of-sales method –The competitive-parity method –The objective-and-task method

13-8 Developing an Integrated Marketing Communications Plan Step 4: Design the promotion mix –First, marketers decide which promotion components to use. –Second, they choose the specific activities within each component. –Third, within each activity they must decide which specific vehicle to employ.

13-9 Strategic Circumstances and the Relative Importance of Advertising and Personal Selling as Promotional Tools

13-10 Comparing the Merits of the Promotion Mix Elements

13-11 Developing an Integrated Marketing Communications Plan Step 5: Evaluate the results –Involves finding out whether the objectives of the promotional activity have been metoften via marketing research. –Research can also provide important insights into whether the firm attained its distribution objectives

13-12 The Nitty-Gritty of Promotional Decision Making Making advertising decisions –Setting advertising objectives –Objectives must relate to attitudes or behavior. –The use of hierarchy-of-effect models move prospective buyers through a series of stepsawareness, comprehension, conviction, actionto the ultimate goal of purchasing the product.

13-13 The Nitty-Gritty of Promotional Decision Making Setting advertising budgets and making media choices –Advertisers must choose some combination of reach and frequency to attain their advertising objectives. –Typically, an advertising medium provides a rate card. –Costs are expressed in cost per thousand impressions or CPM

13-14 The Nitty-Gritty of Promotional Decision Making Traditional media types New media International media

13-15 The Nitty-Gritty of Promotional Decision Making Developing the creative strategy –Effective marketing communications is a task that requires creativity and special expertise. –Managing the creative effort: The unique selling proposition to be delivered The source of the message The nature of the appeal embodied in the message

13-16 The Nitty-Gritty of Promotional Decision Making Measuring advertising results Before Tests – tests made before the message is released on a full-run basis –Recall tests –Sales tests After Tests – tests done after the copy is run in the prescribed media. –Recognition tests –Recall tests

13-17 The Nitty-Gritty of Promotional Decision Making Making personal selling decisions Planning a sales program involves four sets of decisions –Organizing the salesforce. –Development of account management policies. –Making deployment decisions. –Developing performance expectations for each sales rep based on forecasts.

13-18 The Nitty-Gritty of Promotional Decision Making The sales cycle –The duration that it will take to meet with the various decision makers and convince them to try the product, perhaps on a limited basis at first, and then to adopt it more fully. Organizing the sales effort in global markets

13-19 The Nitty-Gritty of Promotional Decision Making Customer service: an increasingly important personal selling function Using technology to enhance sales and customer service performance Recruiting, training, and compensating salespeople: the keys to salesforce performance

13-20 Evaluating and Controlling Salesforce Performance Companies use three main approaches in monitoring the salesforce to evaluate and control sales performance. –Sales analysis –Cost analysis –Behavioral analysis

13-21 Evaluating and Controlling Salesforce Performance Making sales promotion decisions –Sales promotion is less risky than advertising. –Performance is usually easily measurable. –Primary sales promotion techniques: Price-off promotions Premiums Sampling Rebates Contests and sweepstakes Trade promotions

13-22 Evaluating and Controlling Salesforce Performance Making public relations decisions Public relations has several unique advantages: –Lots of information can be communicated. –High credibility. –Very low or nil cost to reach customer. –Supports both pull and push strategies.

13-23 Evaluating and Controlling Salesforce Performance Through public relations, firms communicate with a variety of publics, including the consumer, the financial community and stockholders, the community, prospective employees, current employees, suppliers. Publicity can be used to accomplish different objectives among different groups.

13-24 Take-Aways Marketing managers in most companies face fundamental strategic decisions about whether to emphasize advertising or personal selling in their promotion mix. Identifying the strategic circumstances provides direction for these decisions.

13-25 Take-Aways Getting marketing communications messagesof any kind, in any medium noticed and understood is no easy task. Many ads and other communication attempts simply dont meet their objectives. Following the guidelines in this chapter will mitigate this risk.

13-26 Take-Aways A clear understanding of ones target market is essential for planning and implementing an effective promotional program. Without such an understanding, money is likely to be wasted.

13-27 Take-Aways Many marketing communications efforts are not easy to evaluate. Setting clear and measurable objectives up front facilitates doing so.

13-28 Take-Aways New media, including the Internet, , and mobile telephones, are predicted to revolutionize ad spending, because their resultslike those for direct marketing programscan often be directly measured.

13-29 Take-Aways In companies of all sizes, technology will play an increasingly meaningful role in managing sales and customer service efficiency and effectiveness. Caution must be exercised, however, to avoid sacrificing effectiveness for efficiency.

13-30 Take-Aways For new product launches on limited budgets, sales promotion alone can deliver substantial impact at a fraction of the cost of conventional approaches.