C HAPTER 9 A DVERTISING, P ROMOTION, AND S ALES Part 2

TOPICS 9.5 Publicity and Public Relations 9.6 Sales Promotion 9.7 Personal Selling

9.5 P UBLICITY AND P UBLIC R ELATIONS Publicity is media coverage of a business for which the business doesnt pay and can be either positive or negative. Negative publicity can damage sales or even cause bankruptcy for a business and is often related to an overall industry rather than an individual firm. E.g. Negative publicity for sugar hurt the sales of pre- sweetened cereals. Businesses cannot buy publicity, but they can often control it.

9.5 P UBLICITY AND P UBLIC R ELATIONS Firms hire public relations (PR) companies to manage publicity. A public relations company: Coordinates media relations; Lobbies different levels of government; Prepares brochures and annual reports; and Manages crises.

M EDIA RELATIONS The most valuable tool of a public relations manager is his/her database – contains names of media, editors, producers, photographers, etc. Press Releases - print-ready stories about the positive things their clients are doing. Press Kit – consists of pictures, biographies, and TV commercial clips which present the client in a good light. Press Conference – media representatives are allowed to ask questions. Press Junket – an all-expenses paid trip organized by the public relations firm to take all the media people to a public relations event.

L OBBYING Political decisions can have a negative effect on some businesses. Many firms hire public relations people to pressure government representatives to vote on a piece of legislation that will have an effect on the business.

B ROCHURES AND A NNUAL REPORTS Public relations firms send brochures to potential customers and annual reports to corporate investors and potential investors of a company. C RISIS MANAGEMENT When things go wrong at a business, public relations firms provide damage control. The PR people help correct the initial problem and then publicize the correction. E.g. A company will hire a PR firm to arrange a recall of the product.

9.6 S ALES PROMOTION Sales promotion consists of all the non- personal activities that marketers use to try to directly increase sales over a specified period of time. Sales promotion adds value to the product by reducing the price of the item or adding a reward for purchasing the good or service.

9.6 S ALES PROMOTION Businesses use sales promotion to perform the following tasks: Build traffic in a store, at a trade show, or in a manufacturers showroom. Create extra interest in a product or service, especially during a competitive season or a period of declining sales. Motivate staff. Introduce a new product and generate brand trial. Clear old, end-of-season, or discontinued stock. People in sales promotion use a variety of methods: contests and sweepstakes, refunds and rebates, coupons, premiums and self- liquidators, samples, special sales, and point-of-purchase displays.

S ALES PROMOTION Contests and Sweepstakes Contests and sweepstakes award a prize to a selected participant. Contests require a certain degree of skills while sweepstakes are simply random draws. Canadian laws against gambling prohibit any activity that requires an exchange of money for a chance to win based solely on luck. Promoters of sweepstakes get around this law by calling them contests and including a simple skill-testing question that the winner must answer as a condition of winning.

S ALES P ROMOTION Contests and Sweepstakes contd. They also provide an opportunity to enter that is not based on purchasing the product or on using a standard entry form (e.g. no purchase necessary). Contests and sweepstakes help companies create mailing lists – info such as names, addresses, and addresses are entered into the companys promotional database.

S ALES P ROMOTION Refunds and Rebates A refund is a return of the full amount of the purchase price. A rebate returns only a portion of the purchase price. Coupons A coupon is a document that entitles the bearer to a reduction in the price of a specific product or service. Redemption rate – the number of coupons issued compared with the number of coupons used. Avg. rate for direct-mail coupons – 3.5%.

S ALES P ROMOTION Premiums and Self-Liquidators A premium is a free product or service. E.g. Consumer cards, point collection promotions that provide free products or services to consumers after they have spent a certain amount on the promotional brands. A self-liquidator is a product or service offered to the consumer at a substantially reduced cost. E.g. An action figure that depicts characters from a recent childrens movie is offered for $1 at a hamburger chain. In both cases, the consumer must buy another product or service before obtaining the premium or the self-liquidator.

S ALES P ROMOTION Samples Manufacturers achieve brand trial instantly when a consumer is given a product to sample. Special Sales Manufacturers, importers, wholesales, and retailers all offer special event sales to increase purchases. E.g. Sales to clear old and discontinued stock, Boxing Day sales.

S ALES P ROMOTION Point-of-Purchase Display Manufacturers and distributors provide special racks, cases, shelves, and other display material called point-of-purchase (POP) displays that can be set up next to the cash register.

9.7 P ERSONAL S ELLING A sale is the transfer of title or ownership from a seller to a buyer. Personal selling occurs when the transfer is handled in person.

P ERSONAL S ELLING The Sales Process Acquiring Product Knowledge Making the Approach Determining the Customers Wants Presenting the Product Handling Objections Closing the Sale Following Up Read World of Marketing Text, Pages Complete Workbook Page 184