BUAD 307 PROMOTION Lars Perner, Instructor 1 PROMOTION Elements of the Promotion Mix ● Advertising Strategies ● Other Methods of Promotion

BUAD 307 PROMOTION Lars Perner, Instructor 2 Learning Objectives Identify obstacles that advertising messages face Identify the choices facing marketing managers regarding –Promotional objectives –Promotional message –Media choice –Advertising and promotion spending

BUAD 307 PROMOTION Lars Perner, Instructor 3 Elements of the Promotion Mix Advertising Sales Promotion –Sales –Coupons –Rebates –Premiums Personal selling Public relations Direct marketing

BUAD 307 PROMOTION Lars Perner, Instructor 4

BUAD 307 PROMOTION Lars Perner, Instructor 5 Some Media Alternatives Television –Conventional advertisements –Infomercials –Sponsorship programming –“Placements” In programming “Superimposed” Radio Magazines Newspapers Outdoor Internet Point-of-purchase Other –Movie theaters –On other products

BUAD 307 PROMOTION Lars Perner, Instructor 6 Reaching the Customer: Encoding, “Noise,” and “Decoding” ENCODINGTHEMESSAGEMESSAGECHANNELDECODINGTHEMESSAGERECEIVER CHANNEL FEEDBACK NOISE SENDER. Text, p Marketing mgr Advertising mgr Advertising agency Advertisement Coupon Sales presentation Press release Store display Media, Salesperson Retail store News program Receiver Interpretation of the message Customers Media audience News media Clients Other ads News articles Other store displays Note that things can go wrong in steps 2, 3, and 4. The message must compete with other ads and for limited customer attention. Repetition is crucial.

BUAD 307 PROMOTION Lars Perner, Instructor 7 Advertising Intensity and Return --A Typical Relationship Response (e.g., sales, recall) Amount of Advertising Spending The “S”-Shaped Curve Saturation Point Relatively high effectiveness Too little to do much good

BUAD 307 PROMOTION Lars Perner, Instructor 8 Measuring Advertising Effect Several possible criteria: – Scanner data Individual TV exposure can be matched against actual purchases Available only for grocery products Can only be used for ads that have been running (otherwise, they would not have been able to influence actual purchases) Generally the preferred method when available – Increase in sales (but it may be impossible to separate effects of different simultaneous ads and other factors)—NOT GENERALLY RELIABLE! – Lab studies: Recall Attitude toward product Preference

BUAD 307 PROMOTION Lars Perner, Instructor 9 Scanner Data Research TELEVISIONEXPOSURE DEMOGRAPHICINFORMATION ANALYSIS RECORDEDPURCHASES HOUSEHOLDFILE Purchase on occasion: Yes, no Time since previous purchase Previous purchases Current price Previous price Current promotional status Previous promotional status Current display status Previous display status Display status of competing brands Promotional status of competing brands Coupon used: Yes, no Coupon available: Yes, no Coupon available for other brands? Yes, no Amount of coupon Family size Occupation Income Home ownership No. of ads seen by shopper Ads seen for competing brands “Split cable”

BUAD 307 PROMOTION Lars Perner, Instructor 10 The Personal Selling Process—Steps 1.Generate and qualify leads a.Finding leads b.Qualification process: Predictor of likelihood of purchase 2.Pre-approach and Customer Relations Management (CRM) systems 3.Sales Presentation and Overcoming Reservations 4.Closing the sale 5.Follow-Up