1 Copyright ©2009 by Cengage Learning Inc. All rights reserved Designed by Eric Brengle B-books, Ltd. CHAPTER 16 Promotional Planning for Competitive Advantage Prepared by Amit Shah Frostburg State University Marketing Lamb, Hair, McDaniel 10

Copyright ©2009 by Cengage Learning Inc. All rights reserved The Role of Promotion 2 Promotion Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. LO I

Copyright ©2009 by Cengage Learning Inc. All rights reserved The Role of Promotion 3 LO I Promotional Strategy Promotional Strategy A plan for the optimal use of the elements of promotion:  Advertising  Public Relations  Sales Promotion  Personal Selling CompetitiveAdvantage

Copyright ©2009 by Cengage Learning Inc. All rights reserved The Role of Promotion in the Marketing Mix 4 LO I Overall Marketing Objectives Marketing Mix Product Place Promotion Price Marketing Mix Product Place Promotion Price Target Market Promotional Mix Advertising Public Relations Sales Promotion Personal Selling Promotion Plan Promotional Mix Advertising Public Relations Sales Promotion Personal Selling Promotion Plan

Copyright ©2009 by Cengage Learning Inc. All rights reserved Competitive Advantage 5 LO I Unique features Excellent service Low prices Rapid delivery High product quality

Copyright ©2009 by Cengage Learning Inc. All rights reserved Communication 6 LO 2 Communication Online The process by which we exchange or share meanings through a common set of symbols.

Copyright ©2009 by Cengage Learning Inc. All rights reserved Marketing Communication 7 LO 2 Categories of Communication Categories of Communication Interpersonal Communication Interpersonal Communication Mass Communication Mass Communication

Copyright ©2009 by Cengage Learning Inc. All rights reserved Marketing Communication 8 LO 2 As SendersAs Receivers  Develop messages  Adapt messages  Spot new communication opportunities  Inform  Persuade  Remind

Copyright ©2009 by Cengage Learning Inc. All rights reserved 9 LO 2 Noise Sender Encoding Message Feedback Channel Feedback Channel Message Channel Message Channel Decoding Message Decoding Message Receiver The Communication Process

Copyright ©2009 by Cengage Learning Inc. All rights reserved Goals of Promotion 10 LO 3 Informing Reminding Persuading Target Audience Target Audience PLC Stages PLC Stages: Introduction Early Growth PLC Stages: Growth Maturity PLC Stages: Maturity

Copyright ©2009 by Cengage Learning Inc. All rights reserved Stage in the Product Life Cycle 11 LO 7 Light Advertising; pre- introduction publicity Heavy use of Advertising; PR for awareness; sales promotion for trial AD/PR decrease; limited sales promotion; personal selling for distribution Ads decrease; sales promotion; personal selling; reminder & persuasive Advertising, PR, brand loyalty; personal selling for distribution Introduction Growth Maturity Decline Sales ($) Time

Copyright ©2009 by Cengage Learning Inc. All rights reserved Goals of Promotion 12 LO 3  Increase awareness  Explain how product works  Suggest new uses  Build company image Informative Promotion

Copyright ©2009 by Cengage Learning Inc. All rights reserved Goals of Promotion 13 LO 3 Persuasive Promotion  Encourage brand switching  Change customers’ perceptions of product attributes  Influence immediate buying decision  Persuade customers to call

Copyright ©2009 by Cengage Learning Inc. All rights reserved Goals of Promotion 14 LO 3 Reminder Promotion  Remind customers that product may be needed  Remind customers where to buy product  Maintain customer awareness

Copyright ©2009 by Cengage Learning Inc. All rights reserved The Promotional Mix 15 LO 4 Promotional Mix Promotional Mix Combination of promotion tools used to reach the target market and fulfill the organization’s overall goals.  Advertising  Public Relations  Sales Promotion  Personal Selling

Copyright ©2009 by Cengage Learning Inc. All rights reserved The Promotional Mix 16 LO 4 Advertising Any form of impersonal (one-way) paid communication in which the sponsor or company is identified.

Copyright ©2009 by Cengage Learning Inc. All rights reserved Advertising Media 17 LO 4 Traditional Advertising Media Traditional Advertising Media New Advertising Media  Television  Radio  Newspapers  Magazines  Books  Direct mail  Billboards  Transit cards  Internet  Banner ads  Viral marketing  E- mail  Interactive video  Social networks

Copyright ©2009 by Cengage Learning Inc. All rights reserved Public Relations 18 LO 4 Public Relations Public Relations The marketing function that evaluates public attitudes, identifies areas within the organization that the public may be interested in, and executes a program of action to earn public understanding and acceptance.

Copyright ©2009 by Cengage Learning Inc. All rights reserved The Function of Public Relations Maintain a positive image Educate the public about the company’s objectives Introduce new products Support the sales effort Generate favorable publicity 19 LO 4

Copyright ©2009 by Cengage Learning Inc. All rights reserved Personal Selling 20 Personal Selling Personal Selling LO 4 A purchase situation involving a personal, paid- for communication between two people in an attempt to influence each other.

Copyright ©2009 by Cengage Learning Inc. All rights reserved Personal Selling 21 LO 4 Traditional Selling (sell products) Traditional Selling (sell products) Relationship Selling (sell advice and counsel) Relationship Selling (sell advice and counsel)

Copyright ©2009 by Cengage Learning Inc. All rights reserved Sales Promotion 22 LO 4 Sales Promotion Online Marketing activities--other than personal selling, advertising, and public relations--that stimulate consumer buying and dealer effectiveness.

Copyright ©2009 by Cengage Learning Inc. All rights reserved Sales Promotion 23 LO 4 End Consumers End Consumers Trade Customers Company Employees Company Employees Free samples Contests Premiums Trade Shows Vacation Giveaways Coupons

Copyright ©2009 by Cengage Learning Inc. All rights reserved Characteristics of the Elements in the Promotional Mix 24 LO 4 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Advertising Indirect and impersonal Low Little Delayed One-way Yes Fast Same message to all audiences

Copyright ©2009 by Cengage Learning Inc. All rights reserved Characteristics of the Elements in the Promotional Mix 25 LO 4 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Public Relations Usually indirect, impersonal Moderate to low Little Delayed One-way No Usually fast Usually no direct control

Copyright ©2009 by Cengage Learning Inc. All rights reserved Characteristics of the Elements in the Promotional Mix 26 LO 4 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Sales Promotion Usually indirect and impersonal Moderate to low Little to moderate Varies Mostly one-way Yes Fast Same message to varied target

Copyright ©2009 by Cengage Learning Inc. All rights reserved Characteristics of the Elements in the Promotional Mix 27 LO 4 Communication Mode Communication Control Feedback Amount Feedback Speed Message Flow Direction Message Content Control Sponsor Identification Reaching Large Audience Message Flexibility Personal Selling Direct and face-to-face High Much Immediate Two-way Yes Slow Tailored to prospect

Copyright ©2009 by Cengage Learning Inc. All rights reserved The AIDA Concept 28 Action Desire Interest Attention Cognitive (thinking) Affective (feeling) Conative (doing) LO 5

Copyright ©2009 by Cengage Learning Inc. All rights reserved Integrated Marketing Communications 29 LO 6 Integrated Marketing Communications Integrated Marketing Communications The careful coordination of all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer.

Copyright ©2009 by Cengage Learning Inc. All rights reserved IMC Popularity Growth Proliferation of thousands of media choices Fragmentation of the mass market Slash of advertising spending in favor of promotional techniques that generate immediate response 30 LO 6

Copyright ©2009 by Cengage Learning Inc. All rights reserved Type of Buying Decision 31 LO 7 Advertising Sales Promotion Routine Personal Selling Neither Routine nor Complex Neither Routine nor Complex Advertising Public Relations Print Advertising Complex

Copyright ©2009 by Cengage Learning Inc. All rights reserved Available Funds Trade-offs with funds available Number of people in target market Quality of communication needed Relative costs of promotional elements 32 LO 7