Chapter 15 Copyright John Wiley & Sons 2007 Presentation prepared by Robin Roberts, Griffith University and Mike Spark, Swinburne University of Technology

Chapter 15 Copyright John Wiley & Sons 2007 Chapter 15 The promotion mix

Chapter 15 Copyright John Wiley & Sons 2007 Chapter Objectives 1.Describe the nature and types of advertising 2.Explain the major steps in developing an advertising campaign 3.Recognise the tools used in public relations 4.Define personal selling and understand its purpose 5.Explain what sales promotion activities are and how they are used 6.Recognise specific consumer and trade sales promotion methods

Chapter 15 Copyright John Wiley & Sons 2007 An innovative and effective international advertising campaign Subway – the Jared Fogle campaign Dial-UpBroadband

Chapter 15 Copyright John Wiley & Sons 2007 A consistent advertising platform: Virgin Blue’s television advertising campaign “If only you got Virgin Blue service everywhere” Dial-UpBroadband

Chapter 15 Copyright John Wiley & Sons 2007 The nature and types of advertising Advertising — Paid non-personal communication about an organisation and its products transmitted to a target audience through mass media –Mass Media includes: TV, radio, the Internet, newspapers, magazines, direct mail, outdoor displays and signs on buses and taxis. –It promotes goods, services, ideas, images, issues and people

Chapter 15 Copyright John Wiley & Sons 2007 Types of advertising Institutional – organisational images, ideas and political issues Advocacy – promotes a company’s position Product – highlights uses, features and benefits Pioneer – attempts to stimulate demand for a product category by informing

Chapter 15 Copyright John Wiley & Sons 2007 Types of advertising Competitive – identifies special features, uses and advantages relative to competition Comparative - compares two or more brands Reminder – used to remind about uses, characteristics and benefits Reinforcement – assures users they chose the right brand and tells them how to get the most satisfaction from it

Chapter 15 Copyright John Wiley & Sons 2007 Developing an advertising campaign The creation and execution of a series of advertisements to communicate with a particular target audience

Chapter 15 Copyright John Wiley & Sons 2007 Creating an advertising campaign 1.Target audience – is the group of people at whom advertisements are aimed 2.Defining the advertising objectives – what does the firm hope to accomplish with the campaign? 3. Creating the advertising platform – basic issues or selling points to be included in the advertising campaign

Chapter 15 Copyright John Wiley & Sons 2007 Creating an advertising campaign (cont'd) 4.Determining the advertising budget – the total amount of money a marketer allocates for advertising for a specific period 5. Developing the media plan – sets out the media vehicles and the time schedule for each medium.

Chapter 15 Copyright John Wiley & Sons 2007 Creating an advertising campaign (cont'd) 6.Creating the advertising message – comprises both Content and Form The content is affected by the product or service features, uses and benefits Both content and form are influenced by the characteristics of the target audience and the choice of media

Chapter 15 Copyright John Wiley & Sons 2007 Creating an advertising campaign (cont'd) Copy –the verbal portion of an advertisement Copy Guidelines –identify a specific desire or problem –recommend the product to satisfy the desire or solve the problem –state product benefits –substantiate advertising claims –ask the buyer to take action

Chapter 15 Copyright John Wiley & Sons 2007 Creating an advertising campaign (cont'd) Storyboard –A mockup combining copy and visual material to show the sequence of major scenes in a commercial. Artwork –Illustration and layout of the advertisement

Chapter 15 Copyright John Wiley & Sons 2007 Creating an advertising campaign (cont'd) Illustrations –Photos, drawings, graphs, charts, and tables used to spark audience interest. Layout –The physical arrangement of an advertisements' illustration and copy.

Chapter 15 Copyright John Wiley & Sons 2007 Creating an advertising campaign (cont'd) 7. Executing the campaign –Planning and coordination by people and organisations –Implementation by: detailed scheduling of campaign phases evaluation and corrective action as necessary to make the campaign more effective

Chapter 15 Copyright John Wiley & Sons 2007 Creating an advertising campaign (cont'd) 8.Evaluating advertising effectiveness Pretest – before the campaign, often by a consumer jury Enquiries – during the campaign Post-test – after the campaign, often by consumer surveys

Chapter 15 Copyright John Wiley & Sons 2007 Public Relations Public relations A broad range of communications efforts used to create and maintain favourable relations between an organisation and its stakeholders Tools Written materials –brochures –Newsletters –Annual reports Corporate identity materials –logos, graphics –speeches –sponsored events

Chapter 15 Copyright John Wiley & Sons 2007 Public relations (cont’d) Publicity need not only be used in crisis – it should be used on a positive, ongoing basis Advantages Credibility Significant word-of-mouth communications Limitations Acceptance by news media Timely, interesting, accurate, and in the public interest

Chapter 15 Copyright John Wiley & Sons 2007 Public relations (cont'd) Dealing with unfavourable public relations Prevention of negative incidents and events –Safety programs, inspections, and effective quality control procedures Preparedness for negative incidents and events –Predetermined policies and procedures that expedite news coverage

Chapter 15 Copyright John Wiley & Sons 2007 What is personal selling? Personal Selling — Paid personal communication that informs customers and persuades them to buy products –Most adjustable to customer information needs –Most precise (targeted) form of promotion methods –Most expensive element in promotion mix

Chapter 15 Copyright John Wiley & Sons 2007 Personal selling process

Chapter 15 Copyright John Wiley & Sons 2007 How important is personal selling to your organisation? Dial-UpBroadband

Chapter 15 Copyright John Wiley & Sons 2007 Personal selling process 1.Prospecting – Developing a list of potential customers 2.Preapproach – Before contacting prospects, information is found and analysed about each prospect 3.Approach – The manner in which a salesperson contacts a potential customer

Chapter 15 Copyright John Wiley & Sons 2007 Personal selling process (cont'd) 4.Making the presentation –Key actions to undertake during the presentation: stimulate interest, hold interest –Ways to enhance presentation’s effects/interactions through touching, holding or using product 5.Overcoming objectives –Treat objections as requests for further information –Anticipate likely objections and prepare your responses.

Chapter 15 Copyright John Wiley & Sons 2007 Personal selling process (cont'd) 6. Closing the sale –The stage in the selling process when the sales person ask the prospect to buy the product 7. Following up –Determining if the delivery and setup of order was completed to the customer’s satisfaction –This is the most under-used part of the selling process by most sales people

Chapter 15 Copyright John Wiley & Sons 2007 Sales promotion An activity and/or material that acts as a direct inducement Encourages product trial and purchase Choice of Sales promotion depends on Product characteristics Target market Distribution Channel Resellers Competitive and legal environment

Chapter 15 Copyright John Wiley & Sons 2007 Consumer sales promotion methods Consumer sales promotion methods are ways of encouraging consumers to patronise specific stores or to try particular products 1.Coupons and cents-off offers 2.Refunds and rebates 3.Loyalty programs 4.Point of purchase materials and demonstrations 5.Free samples and premiums 6.Consumer games, contests and sweepstakes

Chapter 15 Copyright John Wiley & Sons 2007 Consumer sales promotion methods (cont’d) Coupons and cents-off offers Coupons – written price reductions used to encourage consumers to buy Cents-off offers let buyers pay less than the regular price to encourage purchase Refunds and rebates Cash Refund – Offers consumers money when they mail in a proof of purchase Rebate – Sends consumers a specific amount of money for making a product purchase

Chapter 15 Copyright John Wiley & Sons 2007 Consumer sales promotion methods (cont'd) Loyalty programs –Reward customers who purchase repeatedly Point-of-purchase materials and demonstrations Point-of-purchase displays –Signs, window displays, display racks, and similar means used to attract customers and to encourage immediate purchases Demonstrations –Used temporarily to encourage trial use –Highly effective, yet costly in practice

Chapter 15 Copyright John Wiley & Sons 2007 Consumer sales promotion methods (cont’d) Free Samples and Premiums Free Samples –Free products given out to encourage trial and to increase sales volume Premiums –Items offered free or at a minimal cost as a bonus for purchasing a product –Consumer Games, Contests and Sweepstakes –Generates retail traffic and increases exposure to promotional messages –Entrants submit their names for inclusion in a drawing for prizes

Chapter 15 Copyright John Wiley & Sons 2007 Trade sales promotion methods ways of persuading wholesalers and retailers to carry a producer’s products and to market them aggressively Trade allowances Buying allowance –A temporary price reduction to resellers for purchasing specified quantities of a product

Chapter 15 Copyright John Wiley & Sons 2007 Trade sales promotion methods (cont’d) Trade allowances Buy-back allowance –A sum of money a producer gives a reseller for each additional unit bought after an initial promotion deal is over Scan-back allowance –A manufacturers reward to retailers based on number of items scanned Merchandise allowance –A manufacturer’s agreement to help reseller’s pay for promotional efforts

Chapter 15 Copyright John Wiley & Sons 2007 Trade sales promotion methods (cont’d) Cooperative advertising and dealer listings Cooperative advertising –Sharing of media costs by manufacturer and retailer for advertising the manufacturer’s products. Dealer listings –Identifying retailers that sell the product; influences retailers to carry the products, builds traffic at the retail level, and encourages consumers to shop at participating dealers.

Chapter 15 Copyright John Wiley & Sons 2007 Trade sales promotion methods (cont’d) Free merchandise and gifts Free merchandise –A manufacturer’s reward given to resellers for purchasing a stated quantity of goods. Dealer loader –A gift, often part of a display, offered to a retailer who purchases a specified quantity of merchandise.

Chapter 15 Copyright John Wiley & Sons 2007 Trade sales promotion methods (cont’d) Premium (Push) Money –Extra compensation to salespersons for pushing a line of products Sales Contests –A means of motivating distributors, retailers, and salespeople by recognising outstanding achievements

Chapter 15 Copyright John Wiley & Sons 2007 What are the pros and cons of advertising on radio versus other media? CountryRap (Audio only)

Chapter 15 Copyright John Wiley & Sons 2007