1. Promotion -- Marketing Communication Chapter 15 Marketing Communication

2. What is promotion? Communication by marketers; its intention is to influence opinions/actions of potential buyers through: –Informing –Persuading –Reminding From an economist’s view, its purpose is to stimulate demand –Shift demand curve to the right –Make demand curve more inelastic Intent: To influence consumers & create a competitive advantage

3. Components of the Promotion Mix Personal Selling Advertising Public Relations & Publicity Sales Promotion Direct Marketing A Promotional Strategy plans for the optimal use of these elements

4. Promotion Mix Components Advertising –Nonpersonal, one-way mass communication about a product or org. that is paid for by a marketer Public Relations & Publicity –Evaluates public attitudes –Identifies areas within the org. the public may be interested in –Executes a program of action to earn public understanding and acceptance (tours, press releases, work in the community, etc.)

5. Promotion Mix Components Sales Promotion –Special sales –Temporary packaging and/or product modifications –Coupons –Samples, premiums, and specialty advertising items –Trade shows –Merchandising efforts–displays, etc. –Contests, games Personal Selling –Interpersonal, face-to-face, paid communication between two people in an attempt to influence each other

6. Promotion Mix Components Social Media –Promotion tools used to facilitate conversations among people online; e.g., blogs, Twitter, YouTube, Facebook, LinkedIn Direct Marketing –E-commerce –Direct Mail –Telemarketing –Catalogs –Infomercials –Home shopping networks

7. Promotion is Communication Two types of communication: –Interpersonal Communication Advantage - immediate feedback Disadvantage - cost of personal contacts –Mass Communication Advantage - reaching large numbers at once Disadvantage - waiting to assess reaction and responses to mass-communicated promotion

8. Promotion is Communication Feedback Sender Encodes Message Trans- mitter Decodes Message Receiver NOISE The Communication Process (Exh.2, p. 273)

9. Goals & Purposes of Promotion Informative Promotion –Increase the awareness of a new brand –Build a company image –Explain the use of the product (or new uses) Persuasive Promotion –Encourage brand switching –Change perceptions of product attributes –Influence customers to buy now or call Reminder Promotion –Remind customers of upcoming needs –Remind customers where to buy the product –Maintain consumer awareness – image, uses, etc.

10. Characteristics of Promotion Mix Elements See Exhibit 16.3 on page 266 Take note of differences in: –Communicator’s control over situation –Amount of feedback –Control over message content –Speed in reaching large audience –Message flexibility Different types of promotion are required for different targeted groups

11. When to Use Which Promotion Element... See Exhibit 4 on page 281 Personal Selling – best at building interest and desire and stimulating action Advertising – best at building awareness and interest Sales Promotion – best at triggering action Public Relations – best at everything except action

12. Concept of A I D A Attention –Greeting & approach (personal selling) –Volume, contrasts, movement, bold words/colors Interest –e.g., Show knowledge of customer’s needs Desire –Explain differential advantage and benefits Action –Request action on their part –Give them a little push – coupons, trial-size packages

13. Integrated Marketing Communications The message reaching the consumer should be consistent and coordinated... regardless of which method of communication/promotion is used

14. Six Factors Affecting the Promotional Mix Factor 1: Nature of the Product –Business or Consumer Product? –How complex is the product? –What are the costs and risks associated with using the product?

15. Six Factors Affecting the Promotional Mix Factor 2: Stage in the Product Life Cycle (See Exh. 6, p. 286) –Introduction Publicity and advertising (informative) to introduce product Sales promotion to induce trial Personal selling to obtain distribution –Growth Heavy advertising and PR to build brand loyalty –Maturity Nature of advertising changes to persuasive and reminder ads Increased sales promotion to build market share –Decline Advertising and PR drastically reduced Other forms of promotion maintained at low levels

16. Six Factors Affecting the Promotional Mix Factor 3: Target Market Characteristics –Degree of geographic dispersion? –Highly informed or not? –Brand loyal or not? Factor 4: Type of Buying Decision –Routine decision or complex decision? Factor 5: Available Funds to Pay for Promotion –Consider the cost per contact of various options –No money – publicity is free –Affects media choices for advertising Factor 6: Push or Pull Strategy – see Exh. 7 on p. 288