1. 1 Global Marketing Chapter 14 Global Marketing Communications Decisions II: Sales Promotion, Personal Selling, Special Forms of Marketing Communication

2. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-2 Introduction In addition to advertising, publicity and PR, the promotion mix includes: –Sponsorships –Sales promotion –Direct marketing –Personal selling –Internet –Infomercials

3. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-3 Sales Promotion Sales promotion refers to any paid consumer or trade communication program of limited duration that adds tangible value to a product or brand –Price vs. non-price promotions –Consumer vs. trade promotions

4. ©2011 Pearson Education, Inc. publishing as Prentice Hall In a price promotion, tangible value may take the form of a price reduction, coupon, or mail-in refund. Nonprice promotions may take the form of free samples, premiums, “buy one, get one free” offers, sweepstakes, and contests. Consumer sales promotions may be designed to make consumers aware of a new product, to stimulate nonusers to sample an existing product, or to increase overall consumer demand. Trade sales promotions are designed to increase product availability in distribution channels. 14-4

5. ©2011 Pearson Education, Inc. publishing as Prentice Hall At many companies, expenditures for sales promotion activities have surpassed expenditures for media advertising. At any level of expenditure, however, sales promotion is only one of several marketing communication tools. Sales promotion plans and programs should be integrated and coordinated with those for advertising, public relations, and personal selling. 14-5

6. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-6 Sales Promotion Provide a tangible incentive to buyers Reduce the perceived risk associated with purchasing a product Provide accountability for communications activity Provide method of collecting additional data for database Home and Garden shows attract homeowners

7. ©2011 Pearson Education, Inc. publishing as Prentice Hall Worldwide, the increasing popularity of sales promotion as a marketing communication tool can be explained in terms of several strengths and advantages. Besides providing a tangible incentive to buyers, sales promotions also reduce the perceived risk buyers may associate with purchasing the product. From the point of view of the sponsoring company, sales promotion provides accountability; the manager in charge of the promotion can immediately track the results of the promotion. Overall, promotional spending is increasing at many companies as they shift advertising allocations away from traditional print and broadcast advertising. 14-7

8. ©2011 Pearson Education, Inc. publishing as Prentice Hall In addition, sweepstakes, rebates, and other forms of promotion require consumers to fill out a form and return it to the company, which can then build up information in its database for use when communicating with customers in the future. 14-8

9. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-9 Sales Promotion: Global or Local In countries with low levels of economic development, low incomes limit the range of promotional tools available Market maturity can also be different from country to country Local perceptions of a particular promotional tool or program can vary Local regulations may rule out use of a particular promotion in certain countries Trade structure in the retailing industry can affect the use of sales promotions

10. ©2011 Pearson Education, Inc. publishing as Prentice Hall In countries with low levels of economic development, low incomes limit the range of promotional tools available. In such countries, free samples and demonstrations are more likely to be used than coupons or on-pack premiums. Market maturity can also be different from country to country; consumer sampling and coupons are appropriate in growing markets, but mature markets might require trade allowances or loyalty programs. 14-10

11. ©2011 Pearson Education, Inc. publishing as Prentice Hall Local perceptions of a particular promotional tool or program can vary. Japanese consumers, for example, are reluctant to use coupons at the checkout counter. A particular premium can be seen as a waste of money. Local regulations may rule out use of a particular promotion in certain countries. Table 14-2 lists regulations governing coupon distribution in several countries. Trade structure in the retailing industry can affect the use of sales promotions. For example, in the United States and parts of Europe, the retail industry is highly concentrated, i.e., dominated by a few key players such as Wal-Mart. This situation requires significant promotional activity at both the trade and consumer level. 14-11

12. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-12 Sampling Kikkoman soy sauce launched a sampling program in supermarkets in the U.S.; today the U.S. contributes 85% of profit from international operations Sampling – Provides consumer with opportunity to try product at no cost – May be distributed in stores, in the mail, through print media, at events, or door-to-door Wine tasting in South Africa

13. ©2011 Pearson Education, Inc. publishing as Prentice Hall Cost is one of the major disadvantages associated with sampling; another problem is that it is sometimes difficult for marketing managers to assess the contribution a sampling program makes to return on investment. Today, many companies utilize event marketing and sponsorships to distribute samples at concerts, sports events, or special events such as food and beverage festivals attended by large numbers of people. Compared with other forms of marketing communication, sampling is more likely to result in actual trial of the product. 14-13

14. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-14 Couponing Couponing accounts for 70% of consumer promotion spending in the U.S. Free-standing inserts, in-pack, on-pack, cross coupons Couponing – Printed certificates entitle the bearer to a price reduction or some other special consideration for purchasing a particular product

15. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-15 Couponing

16. ©2011 Pearson Education, Inc. publishing as Prentice Hall According to Joseph Potacki, who teaches a "Basics of Promotion" seminar for the PMAA, couponing is the aspect of the promotion mix for which the practices in the United States differ the most from those in other countries. In the United States, couponing accounts for 70 percent of consumer promotion spending. Elsewhere, the percentage is much lower. According to Potacki, "It is far less—or nonexistent—in most other countries simply because the cultures don't accept couponing." Potacki notes that one reason couponing is gaining importance in countries such as the United Kingdom is because retailers are learning more about its advantages. 14-16

17. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-17 Couponing

18. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-18 Sales Promotion: Issues and Problems Fraud –Pepsi promotion with Apple Regulations vary by country Cultural dispositions to coupons and other sales promotions –Malaysians see coupon usage as embarrassing –Islam frowns on gambling so sweepstakes may not work

19. ©2011 Pearson Education, Inc. publishing as Prentice Hall During the 2004 Super Bowl broadcast, PepsiCo launched a joint promotion with Apple Computer's iTunes Music Store. Apple planned to give away 100 million songs for free (regular price: $.99); consumers could obtain a code from the caps of Pepsi bottles and enter the code online to quality for the download. The promotion was designed so that anyone purchasing a bottle of Pepsi had a 1-in-3 chance of being a winner. However, many people discovered that, by tilting the bottles to one side, they could tell whether the bottle was a winner. Moreover, they could read the code without having to pay for the Pepsi! 14-19

20. ©2011 Pearson Education, Inc. publishing as Prentice Hall Sales promotion in Europe is highly regulated. Sales promotions are popular in Scandinavia because of restrictions on broadcast advertising, but are subject to regulations. If such regulations are relaxed as the single market develops in Europe and regulations are harmonized, companies may be able to roll out pan-European promotions. 14-20

21. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-21 Personal Selling Person-to-person communication between a company representative and a prospective buyer Focus is to inform and persuade prospect Short-term goal: make a sale Long-term goal: build a relationship

22. ©2011 Pearson Education, Inc. publishing as Prentice Hall Because selling provides a two-way communication channel, it is especially important in marketing industrial products that may be expensive and technologically complex. Sales personnel can often provide headquarters with important customer feedback that can be utilized in design and engineering decisions. Global marketing presents additional challenges because the buyer and seller may come from different national or cultural backgrounds. Despite such challenges, it is difficult to overstate the importance of a face-to-face, personal selling effort for industrial products in global markets. Personal selling is also a popular marketing communication tool in countries with various restrictions on advertising. 14-22

23. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-23 Personal Selling Hurdles Political Risks – unstable or corrupt governments change the rules for the sales team Regulatory Hurdles – Governments can set up quotas or tariffs that affect the sales force Currency Fluctuations – increase and decrease in local currencies can make certain products unaffordable Market Unknowns – lack of knowledge of market conditions, the accepted way of doing business, or positioning of the product may derail the sales team’s efforts

24. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-24 The Strategic/Consultative Selling Model Evolved in response to: Increased competition More complex products More emphasis on customer needs Long-term relationships

25. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-25 The Strategic/Consultative Selling Model Personal Selling Philosophy – commitment to the marketing concept and a willingness to adopt the role of problem solver/partner Relationship Strategy – game plan for establishing and maintaining high-quality relationships with prospects/customers Product Strategy – plan that can assist the sales representative in selecting and positioning products to satisfy customer needs

26. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-26 The Strategic/Consultative Selling Model Customer Strategy – plan that ensures that the sales professional will be maximally responsive to customer needs Presentation Strategy – consists of setting objectives for each sales call and establishing a presentation plan to meet those objectives

27. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-27 The Strategic/Consultative Selling Model

28. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-28 The Presentation Plan Approach Presentation Demonstration Negotiation Close Servicing the sale

29. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-29 Approach Initial contact with the customer/prospect Must completely understand the decision-making process and the roles of each participant

30. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-30 Presentation Prospect’s needs are assessed and matched to the company’s products The style and message of the presentation must be tailored to the audience

31. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-31 Demonstration Salesperson has the opportunity to tailor the communication effort to the customer Can show how the product can meet the customer’s needs

32. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-32 Negotiation Ensures that both the customer and the salesperson come away from the presentation winners

33. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-33 Close Ask for the sale Must be culturally sensitive

34. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-34 Servicing the Sale To ensure customer satisfaction –Implementation process must be outlined –Customer service program established

35. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-35 Special Forms of Marketing Communications Direct Marketing –Direct mail –Catalogs –Infomercials, teleshopping Event Sponsorship –Concerts, sporting events –Product placement in movies Internet Communications

36. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-36 Direct Marketing Any communication with a consumer or business recipient that is designed to generate a response in the form of: –An order –Request for further information –A visit to a store or other place of business

37. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-37 Direct Marketing— Going Global The world is full of people who are not Americans. Be sure not to treat them like they are. Like politics, all marketing is local. Just because your direct mail campaign worked in Texas, do not assume it will work in Toronto. Although there may be a European Union, there is no such thing as a "European." Pick your target, focus on one country, and do your homework. Customers need to be able to return products locally or at least believe there are services available in their country.

38. ©2011 Pearson Education, Inc. publishing as Prentice Hall One-to-One Marketing One-to-one marketing calls for treating different customers differently based on their previous purchase history or past interactions with the company. 14-38

39. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-39 One-to-One Marketing Building from Customer Relationship Management –Identify customers and accumulate detailed information about them –Differentiate customers and rank them in terms of their value to the company –Interact with customers and develop more cost efficient and effective forms of interaction –Customize the product/service offered to the customer

40. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-40 Catalogs A magazine style publication that features photographs and extensive information about a company’s products

41. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-41 Infomercials and Teleshopping An infomercial is a form of paid TV in which a particular product is demonstrated, explained, and offered for sale to viewers who call a toll-free number on the screen Teleshopping on channels like HSN and QVC is exclusively devoted to demonstration and selling

42. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-42 Interactive Television ITV allows viewers to interact with the programming content they are viewing In the U.K., more than half of pay-TV subscribers use ITV Remote controls have buttons to push to order products shown on screen

43. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-43 Sponsorships A company pays a fee to be associated with an event, team, athletic association, or sports facility Combines elements of PR and sales promotion Draws media attention

44. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-44 Product Placement Arranging to have the company’s products and brand names appear in TV shows, movies, and other types of entertainment Marketers also lend or donate products to celebrities and other public figures

45. ©2011 Pearson Education, Inc. publishing as Prentice Hall 14-45 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2011 Pearson Education, Inc. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall