Using Integrated Marketing Communications to Promote Products Chapter 16

Chapter 16 Learning Goals 1.W 1.What are the goals of promotional strategy? 2.W 2.What is the promotional mix, and what are its elements? 3.W 3.What are the types of advertising? 4.W 4.What are the advertising media, and how are they selected? 5.W 5.What is the selling process?

Chapter 16 Learning Goals (cont’d.) 6.W 6.What are the goals of sales promotion, and what are several types of sales promotion? 7.H 7.How does public relations fit into the promotional mix? 8.W 8.What factors affect the promotional mix? 9.W 9.What are three important trends in promotion?

Learning Goal 1 WWhat are the goals of promotional strategy? –Promotional strategy is designed to inform, persuade, or remind target audiences about a company’s products –Goals of promotion Create awareness Get people to try products Provide information Keep loyal customers Increase use of a product Identify potential customers

Promotion: the attempt by marketers to inform, persuade, or remind consumers and industrial users to engage in the exchange process

Goals of Promotion Create awareness Get consumers to try products Provide information Keep loyal customers Increase amount and frequency of use Identify target customers

Keeping Loyal Customers Some companies establish customer loyalty through social identity. Social identity Social identity: aspects of self-definition that derive from membership in social groups Example Example: “It’s a Jeep thing. You wouldn’t understand.” This slogan implies Jeep owners are an elite group with common qualities.

Learning Goal 2 WWhat is the promotional mix, and what are its elements? –Promotional mix –Promotional mix is the combination of the following to promote a product Advertising –Paid form of nonpersonal promotion by an identified sponsor Personal selling –Face-to-face presentation with a prospective buyer Sales promotion –Marketing activities that stimulate consumers to buy Public relations –Marketing function that links policies of the organization with public interest –Develops programs designed to earn public understanding and acceptance

Components of Promotional Mix Advertising Personal selling (face-to-face) Sales promotion  includes coupons, free samples, demonstrations Public relations

Discussion Question How could Compaq use each component of the promotional mix to introduce a new computer to the market? Advertising Advertising - educate consumers Personal selling Personal selling - persuade retailers to stock the new computer Sales promotion Sales promotion - in-store demonstrations, rebates Public relations Public relations - issue a press release about the new product

Learning Goal 3 WWhat are the types of advertising? –Institutional advertising Creates a positive picture of a company –Advocacy advertising Takes a stand on controversial social or economic issues –Product advertising Features a specific good or service –Comparative advertising Company’s product is compared with competing, named products –Reminder advertising Used to keep a brand name in the public’s mind

Advertising: any paid form of nonpersonal promotion by an identified sponsor Advertising

Types of Advertising: Product advertising 1. Product advertising –promotes a specific good or service Institutional advertising 2. Institutional advertising –promotes a company’s image Advertising businesses received approx. $34 billion in 1997, about 45% more than in 1988 ($19 billion) (Source: US Census, Advertising

Learning Goal 4 WWhat are the advertising media, and how are they selected? –Main types of advertising media NewspapersNewspapers MagazinesMagazines RadioRadio TelevisionTelevision OutdoorOutdoor Direct mailDirect mail –Two main factors in selecting media Cost of medium Audience reached by medium

Advertising Media Types of media: newspaper, magazine, radio, television, outdoor advertising, direct mail, Internet Factors influencing choice of media: –cost –audience reached Advertising

Advertising Regulation Some types of complaints made against advertisers by consumers and competitors: unsupported claims regarding the popularity and performance of goods and services unfair comparisons to competitors’ goods and services exaggerated, unrealistic visual depiction of products overstatements that need qualification broad claims based on one testimonial Advertising Source: The Better Business Bureau,

Personal Selling: a face-to-face presentation to a prospective buyer Personal selling

Learning Goal 5 WWhat is the selling process? –Prospecting and qualifying –Approaching customers –Presenting and demonstrating the product –Handling objections –Closing the sale –Following up on the sale

Steps of the Selling Process Prospecting and qualifying Approaching customers Presenting and demonstrating Handling objections Closing the sale Following up the sale Personal selling

Enhancing Personal Sales When salespersons do favors for potential clients, the clients may feel obligated to reciprocate by buying the product. Reciprocity Reciprocity is the social norm that positive behavior should be re-payed in kind. Example Example: salespersons may pay for lunch, give free samples, go out of their way to do small favors Personal selling

Learning Goal 6 WWhat are the goals of sales promotion, and what are several types of sales promotion? Immediate purchase –Goal of sales promotion: Immediate purchase –Most popular types of sales promotions Coupons Samples and premiums Contests and sweepstakes Trade shows Conventions Point-of-purchase displays

Sales Promotion: marketing activities that stimulate consumer buying, including coupons and samples, displays, shows and exhibitions, demonstrations, and other types of selling efforts Sales promotion

Promotional Goals Depend on Type of Customer Sales promotion

Promotional Products Can Be Used To: Sales promotion Motivate sales teams Draw customers to a store or event Publicize an event Increase brand awareness Raise funds Use as souvenirs and thank-you s Gain attention for new products Source: Alpha Promotional Products,

Learning Goal 7 HHow does public relations fit into the promotional mix? –Public relations Mostly concerned with getting good publicity for companies –Public relations departments Furnish company speakers for business and civic clubs Write speeches for corporate officers Encourage employees to take active roles in civic groups

Public Relations: the linking of organizational goals with key aspects of the public interest and the development of programs designed to earn public understanding and acceptance Public relations

Public Relations Activities: Public relations Press relations Product publicity Corporate communication Public affairs Lobbying Employee & investor relations Crisis management

Discussion Question Public relations If you were public relations director for Nike, how could you have responded to the negative publicity of exploiting overseas labor? Press relations Press relations - release information about how Nike addressed the problem; release positive information about Nike Corporate communicationEmployee/investor relations Corporate communication & Employee/investor relations - restore confidence among Nike employees and shareholders Crisis management Crisis management - minimize damage; take positive steps to control the problem

Learning Goal 8 WWhat factors affect the promotional mix? –Nature of the product –Market characteristics –Available funds –Whether a push or a pull strategy is emphasized

Factors That Affect the Promotional Mix: Nature of the product Market characteristics Available funds Push and pull strategies

Using a Pull Strategy Sometimes a pull strategy can be used by increasing demand for a product through scarcity. Scarcity principle Scarcity principle: products seem more valuable when their availability is limited Example Example: The scarcity of Ty’s Beanie Babies © increased their appeal among consumers.

Learning Goal 9 WWhat are three important trends in promotion? –Integrated marketing communications (IMC) Produces a consistent, unified message that is customer focused –Growth of Web advertising Traditional advertising techniques don’t work well on the Internet Advertisers must use rational branding –Digital VCRs may make the measurement of television audiences more difficult

Trends in Promotion: Integrated marketing communications Growth of advertising on the Internet Impact of Digital VCRs on television

Leaders in Advertising on the Internet TRUSTeMicrosoftYahoo!AmazonNext CardAOL Barnes & Noble LinkExchange GatewayAT&T Source: The Nielsen//NetRatings Reporter,