Promotion Promotional Concepts and Strategies Visual Merchandising and Display Advertising Print Advertisements

Promotion and Promotional Mix –Section 1 Key Terms promotion product promotion institutional promotion advertising direct marketing sales promotion public relations news release publicity promotional mix push policy pull policy Objectives Explain the role of promotion in business and marketing Identify the various types of promotion Distinguish between public relations and publicity Write a news release Describe the concept of the promotional mix A LOT OF INFORMATION IN THIS CHAPTER Marketing Essentials Chapter 17, Section 17.1

Promotion and Promotional Mix Study Organizer In a chart like this one, take notes about the five elements of the promotional mix and give examples for each. We will complete this after we go over the slides Marketing Essentials Chapter 17, Section 17.1

The Concept of Promotion Promotion X is persuasive communication. The goals of promotional activities are summarized by the phrase AIDA: Attract Attention Build Interest and Desire Ask for Action A business uses product promotion X to convince prospects to select its products or services instead of a competitor’s. Companies rely on promotion to inform people about their product and services. Companies also use promotional techniques to enhance their public image And reputation and to persuade people that their products are valuable. Promotional activities take many forms, not just to sell a product, but also to educate the public about an issue or trend or advocate change in a law or policy. Marketing Essentials Chapter 17, Section 17.1

The Concept of Promotion Promotional activities: Explain the major features and benefits of a product/service Identify where it is sold Advertise sales Answer customer questions Introduce new offerings Marketing Essentials Chapter 17, Section 17.1

The Concept of Promotion Institutional promotion X is used to: Create a favorable image for a business Help an organization advocate for change Take a stand on trade or community issues Although institutional promotion does not directly sell a product or service, it fosters a favorable image for the company. Create Loyalty- Maintain websites to provide news, product and general information to answer questions Marketing Essentials Chapter 17, Section 17.1

Types of Promotion in the Promotional Mix There are five basic categories in the promotional mix: Personal selling Advertising Direct marketing Sales promotion Public relations Marketing Essentials Chapter 17, Section 17.1

Types of Promotion in the Promotional Mix Personal selling involves direct contact between salespeople and customers. This can take place in the forms of: Personal meetings Telemarketing E-mail contact Correspondence THIS IS ONE OF THE COSTLIEST FORMS OF PROMOTION TYPICALLY TAKES PLACE AFTER OR AS A RESULT OF OTHER PROMOTIONAL ACTIVITIES Marketing Essentials Chapter 17, Section 17.1

Types of Promotion in the Promotional Mix Advertising X is a form of nonpersonal promotion and one-way communication. It can be found in places including: Newspapers Magazines Television Web sites Billboards City buses Companies pay to promote ideas, good or services in a variety of media outlets Marketing Essentials Chapter 17, Section 17.1

Types of Promotion in the Promotional Mix Direct marketing X is a type of advertising directed to a targeted group of prospects rather than to a mass audience. Two forms are: Printed direct mail Electronic direct mail The goals of direct marketing are to generate sales and leads for salespeople to pursue. Generally direct marketing generates a response from a targeted customer by making a special offer, such as a coupon, discount or special delivery terms It gives the recipient an incentive to respond by visiting a store or website, calling a toll free number, returning a form or sending an email -CONSUMER COMPLAINTS about unwanted electronic mailings prompted the passing of the CAN-SPAM Act of 2003 by Congress. This act requires that senders of unsolicited emails give recipients a way to opt out of emails, prohibits the use of deceptive subject lines and requires businesses to provide A valid return address on their emails Marketing Essentials Chapter 17, Section 17.1

Types of Promotion in the Promotional Mix Sales promotion X represents all marketing activities–other than personal selling, advertising, and public relations–that are used to stimulate purchasing and sales. Its objectives are to: Increase sales Inform potential customers about new products Create a positive business or corporate image According to the AMA – American Marketing Association Marketing Essentials Chapter 17, Section 17.1

Types of Promotion in the Promotional Mix Public relations X (PR) activities try to create a favorable image for a company, its products, or its policies. They can enable an organization to influence a target audience. One of the other goals of public relations is to cultivate media relations with reporters who cover a specific industry. Marketing Essentials Chapter 17, Section 17.1

Types of Promotion in the Promotional Mix A news release X is an announcement that is sent to media outlets. It can be used to announce newsworthy developments, such as news about products, distribution channels, facilities, partners, revenues, employees, and events. Marketing Essentials Chapter 17, Section 17.1

Types of Promotion in the Promotional Mix Publicity X involves bringing news or newsworthy information about an organization to the public’s attention. This process is also known as placement. The main function of publicity is to develop a positive perception or awareness of the organization in the marketplace. The placement of publicity is free because it often appears as a media story. Publicity’s risk is that its content is not easily controlled by the business that issues it. Positive vs. negative – people like to do business with a positive image, publicizes sponsoring cultural events, awarding scholarships donating land, supplies, equipment for public use. People are more likely to believe a news story than an advertisement (advertisements cost money, publicity is free) Marketing Essentials Chapter 17, Section 17.1

The Concept of Promotional Mix A promotional mix X is a combination of strategies and a cost-effective allocation of resources a company uses to reach its promotional goals. The strategies in the mix are designed to complement one another: Advertising and direct marketing create public awareness. Public relations helps cultivate a favorable image and brand recognition. Sales promotional activities stimulate sales and reinforce advertising. Personal selling builds on all of these efforts by completing the sale. All elements must be coordinated, there must be communication right down to the sales personnel, everyone involved should be informed. If you promote something and the sales personnel do not know about it you get a frustrated customer. Marketing Essentials Chapter 17, Section 17.1

The Concept of Promotional Mix It is important to consider all aspects of the promotional mix when developing the promotional budget. There is no precise way to measure the exact results of spending promotional dollars. The push policy X of promotion pushes the product to the retailer. Its main purpose is to convince a retailer to stock the promoted product. The pull policy X creates consumer interest and demand, thereby convincing retailers to stock the promoted item. PUSH – relies heavily on personal selling and sales promotion – trade shows – helpful for manufacturers who do not have a strong brand identity PULL – relies heavily on advertising geared towards consumers – samples & demonstrations – creates demand which puts pressure on the retailer to Stock the product. Marketing Essentials Chapter 17, Section 17.1

Types of Promotion-Section 2 Key Terms sales promotions trade promotions consumer promotions coupons premiums incentives promotional tie-ins Objectives Define sales promotion Explain the use of promotional tie-ins, trade sales promotions, and loyalty marketing programs Marketing Essentials Chapter 17, Section 17.2

Types of Promotion Study Organizer Draw a two-column chart like this one to list examples for each type of sales promotion. Marketing Essentials Chapter 17, Section 17.2

Encourage customers to try a new product Sales Promotion Sales promotions X are incentives that encourage customers to buy products or services. They can be used to: Encourage customers to try a new product Build awareness Increase purchases by current customers Reward loyalty Supported by advertising activities – B2B or B2C ( Who remembers what that is?) Marketing Essentials Chapter 17, Section 17.2

Trade Promotions Trade promotions X are sales promotion activities designed to get support for a product from: Manufacturers Wholesalers Retailers More money is spent promoting to businesses than is to consumers – REQUIRES GOOD BUSINESS ETHICS – MUST BE UNIFORM Marketing Essentials Chapter 17, Section 17.2

Trade Promotions Promotional allowances represent cash payments or discounts given by manufacturers to wholesalers or retailers for performing activities to encourage sales. Cooperative advertising happens when a manufacturer supports a retailer by helping to pay for the cost of local advertising. A slotting allowance is a cash premium paid by a manufacturer to a retailer to help cover the costs of placing the product on the shelves. Marketing Essentials Chapter 17, Section 17.2

Trade Promotions Sales force promotions are awards given to dealers and employees who successfully meet or exceed a sales quota. Trade shows and conventions showcase a particular line of products. They provide businesses with opportunities to: Introduce new products Encourage increased sales of existing products Meet customers and partners in the distribution chain Gain continued company and product support Sales force promotion can include cash bonuses, trips etc. Largest trade show is the Annual Consumer Electronics Show in Las Vegas which attracts more than 190,000 manufacturers and retailers, product engineers and developers. Participating companies invest millions in their display booths (Have you ever heard of a trade show) Marketing Essentials Chapter 17, Section 17.2

Consumer Promotions Consumer promotions X are sales strategies that encourage customers and prospects to buy a product or service. Major consumer sales promotion devices include: Coupons Premium deals Incentives Product samples Sponsorships Marketing Essentials Chapter 17, Section 17.2

Consumer Promotions Promotional tie-ins Product placement Loyalty marketing programs Point-of-purchase displays Promotions such as this department store “preview” sale are intended to boost sales. Marketing Essentials Chapter 17, Section 17.2

Consumer Promotions Coupons X are certificates that entitle customers to cash discounts on goods or services. They help to introduce new products, enhance sales of existing products, and encourage retailers to stock the advertised item. Does anyone know how coupons are used – Consumer uses at store – Store sends them to the clearing house to be sorted and then passed to a redemption center. The center reimburses the store for the face value of the coupon plus a handling charge of about 8 cents per coupon. Then they bill the manufacturers. What is the new trend? On line coupons Marketing Essentials Chapter 17, Section 17.2

Consumer Promotions Premiums X are low-cost items given to consumers at a discount or for free. They increase sales by building product loyalty and attracting new customers. They also offer consumers an added-value gift in exchange for their purchase. Free gifts placed in product packages – by mail also, ex. Cereal Pens, key chains as give aways – mugs also Sending in labels in exchange for something Marketing Essentials Chapter 17, Section 17.2

Consumer Promotions Giveaways such as the one advertised here encourage customers to visit a store or service provider. Marketing Essentials Chapter 17, Section 17.2

Incentives X are higher-priced products earned and given away through: Consumer Promotions Deals or price packs offer short-term price reductions that are marked directly on the label or package. Incentives X are higher-priced products earned and given away through: Contests: Competitions based on a demonstrated skill Sweepstakes: Games of chance Rebates: Discounts offered if the item is purchased during a certain time period Create excitement in customers – when you create excitement you have an increase in sales Marketing Essentials Chapter 17, Section 17.2

Consumer Promotions Sponsorship is an integral part of promotion. A sponsoring company pays a fee for the right to promote itself and its products at or on a set location, such as: A physical site (such as a stadium) An event (such as a concert) A group (such as a team) A person (such as a golfer) Sponsorship is a high-profile promotional medium. Therefore, deals must be able to withstand public and media scrutiny. Marketing Essentials Chapter 17, Section 17.2

Consumer Promotions Promotional tie-ins X are also known as cross-promotion and cross-selling campaigns. These activities involve sales promotional arrangements between one or more retailers or manufacturers, producing mutually beneficial results. Product placement is a consumer promotion that involves using a brand-name product in a movie, TV show, sporting event, or in a commercial for another product. Ex. Survivor – Doritos & mountain dew as treats Best known ex. “You’ve Got Mail’ Cost AOL between 3 to 6 million for exposure- AOL recv’d international exposure to off set costs James Bond – Rolex Marketing Essentials Chapter 17, Section 17.2

Consumer Promotions Loyalty marketing programs, also called frequent buyer programs, reward customers for patronizing a company. They offer consumers incentives to continue to buy their products. Point-of-purchase displays are usually placed in high-traffic areas and promote impulse purchases. Airlines instituted the first loyalty program with frequent flier miles – now many companies use this type of program – examples? Amex, dept. stores, food stores etc. In store displays and point of purchase will be discusses in Ch. 18 Marketing Essentials Chapter 17, Section 17.2

Section One Promotion is any form of communication a business uses to inform, persuade, or remind people about its products and its image. Promotion includes personal selling, advertising, direct marketing, sales promotion, and public relations. Public relations fosters a favorable image about a business, its products, or its policies. Publicity tries to place positive information in the media. continued

Section 2 Sales promotion is a short-term incentive given to encourage consumers to buy a product or service. Sales promotions can be classified as either trade promotions or consumer sales promotions.