1. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–1 Chapter 12 The Promotional Program

2. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–2 What is a promotion? Promotion is the element in an organisation’s marketing mix that serves to inform, persuade and remind the market about the organisation and/or its products. Promotion is an attempt to influence; whether a particular promotional activity is designed to inform, persuade or remind, the ultimate objective is to influence the recipient’s feelings, beliefs or behaviour.

3. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–3 The promotional mix Personal selling—the presentation of a product to a prospective customer by a firm’s sales executive. Advertising—paid, non-personal mass communication, in which the sponsor is clearly identified.

4. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–4 The promotional mix Sales promotion—demand-stimulating activity designed to supplement advertising and co- ordinate personal selling. Publicity—a non-paid form of advertising that uses mass communication to stimulate demand.

5. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–5 The promotional mix Public relations—a planned communication effort by an organisation to contribute to generally favourable attitudes and opinions toward an organisation and its products.

6. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–6 The communication process Insert Fig 12.1 page 378

7. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–7 Promotion Marketers use promotional activities to differentiate their products from those of competitors, and induce the consumer’s purchase decision by introducing new information.

8. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–8 The roles of promotion Informing The most useful product will be a failure if no one knows about it. Persuading Intensive competition exists in the market. Reminding Consumer’s need reminding of product’s availability.

9. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–9 Choosing the right form of promotion Marketers need to consider: – The target market. – The nature of the product. – The stage of the product’s life cycle. – Money available for the promotion.

10. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–10 Reaching the target market Marketers need to identify whom they are trying to influence. Determining customer’s readiness to buy: – Awareness. – Knowledge. – Liking. – Preference. – Conviction. – Purchase. This is the hierarchy of effects (or buying stages).

11. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–11 Reaching the target market Determine where customers are located – Geographic location and access to the message. Determine type of customer – Retail, wholesale, intermediaries, business. Determine how many customers there are – Size of the potential customer and choice of suitable communication, e.g. personal selling.

12. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–12 Nature of the product Unit value of the product. Amount of product customisation. Amount of pre-sale and post-sale service required.

13. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–13 Product’s life cycle stage Introduction – Customers are not aware of the product’s features. Growth – Customers are aware of the product’s benefits. Maturity – Competition intensifies and sales level off. Decline – Sales and profits are declining.

14. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–14 Amounts of funds available How much does promotion cost? Class exercise – Refer to page 376, Rix 5e, for questions. – Refer to page 415, Rix 5e, for answers.

15. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–15 Push versus pull strategy Push strategy Producer creates demand for product. Aims promotional activity to channel member(s). Each channel member promotes to next channel member. Demand ‘pushed’ down distribution channel. Consumer influenced by retailer’s advertising.

16. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–16 Push versus pull strategy Pull strategy Producer creates demand for product. Aims promotional activity directly at end user. Consumer demands product from retailer. Demand ‘pulled’ up the distribution channel.

17. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–17 Push versus pull strategy Insert Fig 12.2 page 385

18. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–18 Planning a promotional campaign Determine campaign objectives. Determine buying motives by purchaser. Determine campaign theme. Determine the campaign’s integrated marketing communication process.

19. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–19 The promotional budget How much should I spend? Percentage of sales method – Company might determine past or anticipated sales and apply a percentage of sales as the promotional budget. All available funds – Company might use all available funds on the promotional campaign.

20. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–20 The promotional budget How much should I spend? Matching the competition (also known as share of voice) – Promotional expenditure based on market share of competitors, or actual expenditure, if known. Task or objective method – Determine what tasks or objectives the promotion must accomplish. – Determine what it will cost to perform the task or meet the objective.

21. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–21 Managing personal selling Personal or face-to-face selling is usually used when: – The market is concentrated geographically. – The product has a high unit value. – The sale involves a trade-in. – The product is in the introductory stage of its life cycle. – There is not enough money to sustain campaign.

22. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–22 Skills of the salesperson A good salesperson requires various attributes: – Time management skills. – Organisational ability. – Consulting skills. – Communication skills. – Problem-solving skills. – Credibility (also a positive attitude).

23. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–23 Changing approaches to personal selling Team selling – A group of people from various departments or affiliate firms form the sales team, usually used for major projects. Systems selling – Selling a total package of related goods and services—a system—to solve a customer’s problem. Relationship selling – Developing relationships with current and new clients over an extended period.

24. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–24 The integrated approach Personal selling and direct marketing: – Used to develop sales leads. – Usually done via telemarketing. – Assists in categorising customers by value. – Best form for taking routine orders. – Cost-effective manner of communication. Online selling—company website set up to take orders online.

25. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–25 Personal selling process Insert Fig 12.3 page 393

26. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–26 Selling models AIDA – Awareness. – Interest. – Desire. – Action. – A traditional approach, which focused on the salesperson and their objectives more than on customer needs. Consultative – A method used to determine the customer’s needs and assist in providing a solution.

27. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–27 Managing the sales team Recruitment and selection – Decide who is the right person for the job and what attributes and qualifications they should have. Choose the right people – Various methods used are interview, references, psychological and aptitude tests and physical examinations.

28. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–28 Managing the sales team Induction – A method used to familiarise a new employee with their new working environment. Training – Determine who should train new salesperson. – A training program should be developed to meet company objectives and cover philosophy, company and product overview.

29. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–29 Managing the sales team Coaching – Spending time with a salesperson to observe and assist with their work practice, outcomes and to develop their knowledge and skills. Motivation – Managers should find out what motivates an individual. – Motivators include financial and non-financial rewards.

30. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–30 Compensation There are various forms of compensation: – Straight salary  Offers the maximum degree of security and stability of earnings. – Straight commission  Opposite merits and limitations to those of the straight- salary plan.

31. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–31 What is advertising? Advertising consists of presenting a non-personal, sponsor-identified message about a product or organisation. – Four key elements: 1A verbal and/or visual message. 2A sponsor, who is identified in the advertisement. 3Delivery through one or more media. 4Payment by the sponsor to the media carrying the message.

32. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–32 Types of advertising Consumer versus business advertising – Informational bases and makes appeals to rational or emotional buying motives. Product versus institutional advertising – Focus on particular product or brand and information and goodwill to company. Primary-demand and selective-demand advertising – Stimulate demand for generic or specific brands. Cooperative advertising – Promotes the products of two or more firms that share its costs.

33. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–33 Which medium should we choose? To choose the right medium for a promotional message, we need to consider the following questions: What do we want our ads to do? Who are we trying to reach? What message do we want to communicate? Where and when do our targeted customers make their buying decisions? How much will each medium cost?

34. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–34 Managing sales promotion Sales promotion (promotion marketing) includes: Premiums, in-store displays, trade shows, demonstrations and contests. It is distinct from advertising and personal selling but all three are interrelated.

35. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–35 Managing sales promotion Choosing the right sales promotional tools What is the objective? Who is the target market? Product considerations—demonstrational. The cost of the tool. Current economic conditions.

36. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–36 Managing sales promotion Measuring the success of our sales promotion Responses to a premium or special offer. Sales promotions have definite start and end dates. Most promotions are designed to impact sales directly, rather than awareness or attitude. Results may be inflated by sales cannibalisation.

37. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–37 Managing public relations and publicity PR can be achieved by: – Supporting charitable projects. – Supplying volunteers or other resources. – Participating in community-service events. – Sponsorship. – Providing information to customers via newsletters.

38. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix Slides prepared by: Joe Rosagrata 12–38 Managing public relations and publicity Publicity can be achieved by: – Structured news releases to the media. – Coordinating personal communication with a group. – Coordinating one-to-one personal communication (lobbying).