Section 17.1 The Promotional Mix

Section 17.1 The Promotional Mix
Marketing Essentials n Chapter 17 Promotional Concepts and Strategies Section The Promotional Mix

The Promotional Mix SECTION 17.1 The role of promotion in marketing
What You'll Learn The role of promotion in marketing The concept of promotional mix The characteristics of personal selling and advertising The nature and scope of publicity

The Promotional Mix SECTION 17.1
Why It's Important Since businesses must continually promote their organizations, products, and policies to gain customer acceptance, you will need to learn successful promotional strategies.

The Promotional Mix SECTION 17.1 promotion promotional mix
Key Terms promotion promotional mix product promotion institutional promotion advertising sales promotion public relations publicity push policy pull policy

The Promotional Mix SECTION 17.1 The Concept of the Promotional Mix
Promotion is any form of communication a business or organization uses to inform, persuade, or remind people about its products. Promotional mix is a combination of the different types of promotion. A business decides on the promotional mix that will be most effective in persuading potential customers to purchase its products. Slide 1 of 2

The Promotional Mix SECTION 17.1 The Concept of the Promotional Mix
A business uses product promotion to convince potential customers to buy its products instead of buying from a competitor. Institutional promotion is used by businesses to create a favorable image for themselves, as opposed to promoting specific products or services. Slide 2 of 2

The Promotional Mix SECTION 17.1 Types of Promotion
There are four basic types of promotion: personal selling advertising sales promotion public relations Slide 1 of 4

Personal Selling is one of the largest forms of promotion. It is designed to complete a sale once a customer is attracted to a business. Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. American businesses spend about $200 billion each year on advertising. Slide 2 of 4

Sales Promotion is everything besides personal selling, advertising, and public relations that is used to stimulate consumer purchasing and sales effectiveness. Public Relations refers to any activity designed to create a favorable image of a business, its products, or its policies. Slide 3 of 4

Publicity is a specific kind of public relations that involves placing positive newsworthy information about a business in the media. Publicity is much cheaper than advertising, and a mention on the news is more likely to be regarded as objective. On the other hand, companies cannot control negative publicity. Slide4 of 4

The Promotional Mix SECTION 17.1 Coordination of the Promotional Mix
Most businesses use more than one type of promotion to achieve their promotional goals. Each type of promotion is designed to complement one another, and all must be coordinated.

The Promotional Mix SECTION 17.1 Promotional Budget
In large companies, the marketing department establishes a promotion budget, allocates resources, coordinates the campaign, and determines the right promotional mix for the company. In smaller businesses, these responsibilities often rest with the owner-operator, are divided among employees, or contracted to outside agencies.

The Promotional Mix SECTION 17.1 The Push-Pull Concept
A push policy is used to convince a retailer to stock the products being promoted, pushing the product to the retailer. A push strategy relies heavily on personal selling and promotion at trade shows. A pull policy is designed to create consumer interest, pulling consumers to the product.

Reviewing Key Terms and Concepts
ASSESSMENT 17.1 Reviewing Key Terms and Concepts 1. What is promotion? 2. Describe the concept of promotional mix. 3. What is the difference between product and institutional promotion? 4. Why is personal selling the most expensive form of promotion? 5. What is the difference between publicity and advertising?

ASSESSMENT Thinking Critically 17.1
Some people think that advertising is a waste of money that needlessly raises the prices of goods and services. What do you think? Is the money spent on advertising justified? Provide an argument to support your position.

Graphic Organizer 17.1 Elements of the Promotional Mix
Personal Selling Advertising Sales Promotion Public Relations

Marketing Essentials End of Section 17.1

Sales Promotion SECTION 17.2 The characteristics of sales promotion
What You'll Learn The characteristics of sales promotion The concept of trade promotions The different kinds of consumer sales promotions

Sales Promotion SECTION 17.2
Why It's Important To be successful, a business must continually promote its products. This section introduces you to the concept of sales promotion and the techniques used to increase sales and to inform customers about a company’s products.

Sales Promotion SECTION 17.2 slotting allowance sales incentives
Key Terms slotting allowance sales incentives premiums incentives licensing promotional tie-ins

Sales Promotion SECTION 17.2 Sales Promotion
Sales promotion is a short-term incentive offered to encourage buying a good or service. Sales promotions can be directed toward manufacturers, wholesalers, retailers, and consumers, as well as a company's employees. Sales promotions are usually supported by advertising activities.

Sales Promotion SECTION 17.2 Trade Promotions
Trade promotions are sales promotion activities designed to gain manufacturers', wholesalers', and retailers' support for a product. More money is actually spent on promoting to businesses than to consumers. Major trade promotions include: slotting allowances buying allowances trade shows and conventions sales incentives Slide 1 of 3

Slotting allowances are cash premiums paid by the manufacturer to a retail chain for the costs involved in placing a new product on its shelves. Buying allowances are price discounts given by manufacturers to wholesalers and retailers to encourage the purchase of a product. Slide 2 of 3

Trade shows and conventions are events at which businesses can introduce new products, encourage increased sales of existing products, and gain continued company and product support. Sales incentives are awards given to managers and employees who successfully meet or exceed sales quotas. Slide3 of 3

Sales Promotion SECTION 17.2 Consumer Sales Promotions
Sales promotion efforts designed to encourage customers to buy a product are called consumer promotions. They include: premiums incentives product samples loyalty marketing programs promotional tie-ins product placement visual merchandising and displays

Sales Promotion SECTION 17.2 Premiums
Premiums are low-cost items given to consumers at a discount or for free. Some popular premiums are: coupons factory packs traffic builders coupon plans Slide 1 of 3

Coupons are certificates that entitle customers to cash discounts on goods or services. Factory packs are free gifts placed in product packages. These are common in cereal boxes. Slide 2 of 3

Traffic builders are low-cost premiums such as pens or key chains given away free to consumers for visiting a new store or attending an event. Coupon plans are ongoing programs offering a variety of premiums in exchange for labels, coupons, or other tokens. Slide 3 of 3

Sales Promotion SECTION 17.2 Incentives
Incentives generally are higher-priced products earned and given through contests (games of skill), sweepstakes (games of chance), and rebates (discounts from manufacturers). Businesses use incentives to promote many products because they create customer excitement and increase sales.

Sales Promotion SECTION 17.2 Product Samples
A product sample is a free trial size of a product sent through the mail, distributed door-to-door, or given away at retail stores and trade shows. Detergents, toothpastes, shampoos, deodorants, and colognes are frequently promoted this way.

Sales Promotion SECTION 17.2 Promotional Tie-Ins
Promotional tie-ins involve coordinated sales promotional arrangements between one or more retailers or manufacturers. Example: For the promotion of the Goofy movie, Disney Studios cooperated with McDonald's which made a special Happy Meal with a Fisher-Price Toddler Toy.

Sales Promotion SECTION 17.2 Loyalty Marketing Programs
Loyalty marketing programs, also called frequent buyer programs, reward customers for making multiple purchases. Loyalty marketing was popularized in the 1980s by the airline industry, which instituted frequent flier programs.

Sales Promotion SECTION 17.2 Product Placement
With product placement, an organization can develop product recognition by making sure that a product is featured in special events, on television, or in the movies. Example: Apple's iMac appeared in popular television shows when it was first introduced.

Sales Promotion SECTION 17.2 Visual Merchandising and Displays
Visual merchandising refers to the coordination of all physical elements in a place of business so that it projects the right image to its customers. Displays refer to the visual and artistic aspects of presenting a product to a target group of customers.

ASSESSMENT 17.2 Reviewing Key Terms and Concepts 1. Why do businesses use sales promotions? 2. What unique characteristics do sales promotions have? 3. What are trade promotions? 4. What are consumer promotions? 5. Explain the difference between a sweepstakes and a contest.

Why don't manufacturers who issue coupons simply lower the price of their products to attract customers? What is the value of coupons to such businesses?

Public Relations SECTION 17.3 The nature and scope of public relations
What You'll Learn The nature and scope of public relations The different audiences for public relations The duties of public relations specialists How to prepare a news release

Public Relations SECTION 17.3
Why It's Important Public relations is image-building. A company is concerned with how its employees, customers, and the general public (including its stockholders) view it. This section explains how the public relations department of a company fosters goodwill among the public.

Public Relations SECTION 17.3 customer advisory boards
Key Terms customer advisory boards consumer affairs specialists community relations news release press kit press conference

Public Relations SECTION 17.3 The Nature and Scope of Public Relations
Businesses want to present a positive image to their customers, employees, and the general public. Well-planned and organized public relations efforts can increase sales, reinforce a good reputation, and increase the willingness of consumers to respond to advertising efforts for a company’s products.

Public Relations SECTION 17.3 Customer Relations
Good communication between employees and customers is vital in promoting a favorable business image. Many businesses go beyond courtesy to offer special services and amenities such as on-site restaurants and child-care facilities in order to maintain good customer relations. Slide 1 of 2

Public Relations SECTION 17.3 Customer Relations
Customer advisory boards are panels of consumers who make suggestions about products and businesses. National companies often employ consumer affairs specialists to handle customer complaints and to serve as consumer advocates within the firm. Slide 2 of 2

Public Relations SECTION 17.3 Employee Relations
Successful businesses have loyal and well-motivated employees who feel they are important to the company. Some examples of programs for employees include providing: Tuition reimbursement for college courses Newsletters for and about the company and its employees Recreational programs Employee recognition programs for improvements in performance and efficiency

Public Relations SECTION 17.3 Community Relations
Community relations refers to the activities that a business uses to acquire or maintain the respect of the community, such as participating in and sponsoring activities that benefit the community's civic, social, and cultural life. Example: Sponsoring the Special Olympics, or providing mentors for students.

Public Relations SECTION 17.3 The Role of Public Relations Specialists
The principal task of a public relations specialist is to publicize the good news about a company and its products—and to control the damage done by any negative news. Public relations specialists work in the public and private sector.

Public Relations SECTION 17.3 Writing News Releases
A news release is a prewritten story about a company that is sent to the media containing information about the company’s employees, stores, operations, products, corporate philosophy, or participation in an event or program. Slide 1 of 2

Public Relations SECTION 17.3 Writing News Releases
A news release must contain newsworthy information in order to be picked up by the media. It should be properly formatted and answer five basic questions: who, what, where, when, and why. Slide 2 of 2

Public Relations SECTION 17.3 Other Public Relations Duties
In addition to writing news releases, public relations specialists also perform these tasks: Prepare annual reports, brochures, and responses to customer inquiries. Write feature articles for trade magazines. Develop press kits, which are folders containing articles, news releases, feature stories, and photographs. These are given to the media to assist in reporting.

ASSESSMENT 17.3 Reviewing Key Terms and Concepts 1. Name three ways in which the goodwill generated by public relations can benefit a company. 2. What are customer advisory boards? 3. What is meant by community relations? 4. What is the primary task of public relations specialists? 5. What are three reasons why a company may call a press conference?

What is meant by this following statement? "To the customer, the employees are the company."