2.1

Chapter 3:Chapter 3:

PROMOTION PROMOTION

andand

IMC PLANNINGIMC PLANNING

andand

STRATEGYSTRATEGY

3.13.1

The Promotion Plan The Promotion Plan

A PROMOTION PLAN IS:A PROMOTION PLAN IS: Direct Extension of Firm’s Marketing PlanDirect Extension of Firm’s Marketing Plan A Specification of the Analysis, Strategy, and Tasks of the Promotional EffortA Specification of the Analysis, Strategy, and Tasks of the Promotional Effort Needed to Conceive and Implement an Effective Promotional EffortNeeded to Conceive and Implement an Effective Promotional Effort

SIX MAJOR ELEMENTS OF A PROMOTIONAL PLAN ARE:SIX MAJOR ELEMENTS OF A PROMOTIONAL PLAN ARE: Executive Summary and OverviewExecutive Summary and Overview Situation AnalysisSituation Analysis ObjectivesObjectives BudgetingBudgeting StrategyStrategy Evaluation Evaluation

3.23.2

IntroductionIntroduction

Situation AnalysisSituation Analysis

ObjectivesObjectives

BudgetingBudgeting

StrategyStrategy

ExecutionExecution

EvaluationEvaluation

Stages in theStages in thePromotional Promotional PlanPlan

3.33.3

The Promotion Plan (con’t)The Promotion Plan (con’t)EXECUTIVE SUMMARY & OVERVIEWEXECUTIVE SUMMARY & OVERVIEW Executive Summary-States Most Important Aspects of the PlanExecutive Summary-States Most Important Aspects of the Plan Overview-What is to be Covered in the Plan in General TermsOverview-What is to be Covered in the Plan in General Terms

SITUATION ANAYLSISSITUATION ANAYLSIS Marketers and Agencies Lay Out Most Important Factors Defining the Situations Facing the Firm, and Include:Marketers and Agencies Lay Out Most Important Factors Defining the Situations Facing the Firm, and Include:

Demographic TrendsDemographic Trends Historical ContextHistorical Context Industry AnalysisIndustry Analysis Market CharacteristicsMarket Characteristics

Type of ConsumerType of Consumer Geographic ConsiderationsGeographic Considerations CompetitionCompetition

3.43.4

3.43.4

The Promotion Plan (con’t)The Promotion Plan (con’t)

SITUATION ANAYLSIS (con’t)SITUATION ANAYLSIS (con’t) Product CharacteristicsProduct Characteristics

CategoryCategory Convenience GoodsConvenience Goods Shopping GoodsShopping Goods Specialty GoodsSpecialty Goods

Stages in Product Life CycleStages in Product Life Cycle Characteristics of the FirmCharacteristics of the Firm

Push vs. Pull StrategyPush vs. Pull Strategy Funds AvailableFunds Available Size of Sales StaffSize of Sales Staff Extent of Firm’s Product LineExtent of Firm’s Product Line

3.53.5

3.3.55

The Promotion Plan (con’t)The Promotion Plan (con’t)

SITUATION ANALYSIS (con’t)SITUATION ANALYSIS (con’t) Characteristics of the DistributionCharacteristics of the Distribution

Intensity of DistributionIntensity of Distribution Intensive DistributionIntensive Distribution Selective DistributionSelective Distribution ExclusiveExclusive

Length of Trade ChannelLength of Trade Channel Types of Trade PartnersTypes of Trade Partners

3.3.66

A Situation Analysis Needs toA Situation Analysis Needs toConsider the Type of TradeConsider the Type of TradePartners that Will be PromotingPartners that Will be PromotingThe Marketer’s BrandThe Marketer’s Brand

3.7

OBJECTIVESOBJECTIVES Lays the Framework for Executions in Promotional Campaign and Lays the Framework for Executions in Promotional Campaign and

Identifies Goals of a Marketer in Concrete, Measurable TermsIdentifies Goals of a Marketer in Concrete, Measurable Terms Create & Maintain Image for BrandCreate & Maintain Image for Brand Increase Customer Awareness & Curiosity about a BrandIncrease Customer Awareness & Curiosity about a Brand Change Consumers’ Beliefs & Attitudes about a BrandChange Consumers’ Beliefs & Attitudes about a Brand

Belief – Knowledge & Feelings Accumulated about a BrandBelief – Knowledge & Feelings Accumulated about a Brand Attitude is Overall Evaluation of Brand Based on Attitude is Overall Evaluation of Brand Based on

Knowledge/EmotionsKnowledge/Emotions Influence Purchase IntentionsInfluence Purchase Intentions Stimulate Trial UseStimulate Trial Use Convert One-Time Users to Repeat CustomersConvert One-Time Users to Repeat Customers Switch Consumers from Competing BrandsSwitch Consumers from Competing Brands Encourage Brand LoyaltyEncourage Brand Loyalty Stimulate More Frequent UseStimulate More Frequent Use Increase SalesIncrease Sales

3.3.88

The Promotion Plan (con’t)The Promotion Plan (con’t)

Creating Awareness and Curiosity is aCreating Awareness and Curiosity is a Common Promotional ObjectiveCommon Promotional Objective

OBJECTIVES – KEY TERMINOLOGYOBJECTIVES – KEY TERMINOLOGY Brand ImageBrand Image Brand AwarenessBrand Awareness Top-of-the-Mind AwarenessTop-of-the-Mind Awareness BeliefsBeliefs AttitudeAttitude Purchase IntentPurchase Intent Trial UsageTrial Usage Repeat PurchaseRepeat Purchase Brand SwitchingBrand Switching Brand LoyaltyBrand Loyalty Increasing the Frequency of Use Increasing the Frequency of Use

3.3.1010

The Promotion Plan (con’t)The Promotion Plan (con’t)

COMMUNICATIONS vs. SALES OBJECTIVESCOMMUNICATIONS vs. SALES OBJECTIVES Increase Awareness of Brand Name to 40% of All Consumers in Increase Awareness of Brand Name to 40% of All Consumers in

Western USWestern US Create Trial Use by 15% of all Teenagers 13-15Create Trial Use by 15% of all Teenagers 13-15 Communicate Superior Brand Performance Features to Target Audience Communicate Superior Brand Performance Features to Target Audience

with Series of Advertisements over Next Six Monthswith Series of Advertisements over Next Six Months

CHARACTERISITICS OF WORKABLE PROMOTIONAL CHARACTERISITICS OF WORKABLE PROMOTIONAL OBJECTIVESOBJECTIVES

Establish Quantitative BenchmarkEstablish Quantitative Benchmark Specify Measurement MethodsSpecify Measurement Methods & Criteria or Success & Criteria or Success Specify a Time FrameSpecify a Time Frame

3.3.1111

The Promotion Plan (con’t)The Promotion Plan (con’t)

The Promotion Plan (con’t)The Promotion Plan (con’t)

BUDGETING - METHODSBUDGETING - METHODS Percentage-of-Sales ApproachPercentage-of-Sales Approach Unit-of-Sales ApproachUnit-of-Sales Approach Share of Market/Share of VoiceShare of Market/Share of Voice Funds AvailableFunds Available Objective & TaskObjective & Task

3.3.1212

3.3.1313

The Promotion Plan (con’t)The Promotion Plan (con’t)

BUDGETING FOR ADVERTISINGBUDGETING FOR ADVERTISING Marketing ResearchMarketing Research Message ResearchMessage Research Production Costs: Production Companies, Talent, Production Costs: Production Companies, Talent,

Site CostsSite Costs Media CostsMedia Costs Agency Commissions/FeesAgency Commissions/Fees Account Personnel Travel ExpensesAccount Personnel Travel Expenses

BUDGETING FOR SALES PROMOTIONBUDGETING FOR SALES PROMOTION Coupon Value and Dealer Handling ChargesCoupon Value and Dealer Handling Charges Contest and Sweepstakes Material and ChargesContest and Sweepstakes Material and Charges Brochures and Collateral MaterialBrochures and Collateral Material Trade Shows & ExhibitsTrade Shows & Exhibits Trade Channel Partner Meeting & EntertainmentTrade Channel Partner Meeting & Entertainment PremiumsPremiums Point-of-Purchase MaterialsPoint-of-Purchase Materials Trade AllowancesTrade Allowances Trade IncentivesTrade Incentives Trade Training ProgramsTrade Training Programs Refunds/RebatesRefunds/Rebates

3.3.1414

The Promotion Plan (con’t)The Promotion Plan (con’t)

Premiums—Like This One Premiums—Like This One Offered by Jell-O—Must be Offered by Jell-O—Must be Factored into Budget PlanningFactored into Budget Planningfor Promotionfor Promotion

3.15

The Promotion Plan (con’t)The Promotion Plan (con’t)

BUDGETING FOR DIRECT MARKETINGBUDGETING FOR DIRECT MARKETING

Uses a Simple Cost-Based MethodUses a Simple Cost-Based Method Exact Bids Obtained - Printing, Sorting, Bundling & Exact Bids Obtained - Printing, Sorting, Bundling &

Mailing for Print Campaigns Mailing for Print Campaigns Bids Obtained for Telemarketing, Infomercial or Catalog Bids Obtained for Telemarketing, Infomercial or Catalog

Selling from External FacilitatorsSelling from External Facilitators

3.3.1616

Budgeting for Direct MarketingBudgeting for Direct MarketingNeeds to Consider the Cost of Needs to Consider the Cost of Printing and Mailing MaterialsPrinting and Mailing Materials

3.17

The Promotion Plan (con’t)The Promotion Plan (con’t)

BUDGETING FOR WEBSITES & BANNER ADSBUDGETING FOR WEBSITES & BANNER ADS Costs for Web Sites - $30K to $100KCosts for Web Sites - $30K to $100K Costs for Banner Ads - $10 CPM to $30 CPMCosts for Banner Ads - $10 CPM to $30 CPM

3.183.18

The Promotion Plan (con’t)The Promotion Plan (con’t)

BUDGETING FOR PUBLIC RELATIONSBUDGETING FOR PUBLIC RELATIONS

Most Difficult of All Budgets to Set - Most Most Difficult of All Budgets to Set - Most Expensive Public Relation Occurs During CrisesExpensive Public Relation Occurs During Crises

Most PR Firms Work on Retainers - Set on an Most PR Firms Work on Retainers - Set on an Annual BasisAnnual Basis

3.193.19

The Promotion Plan (con’t)The Promotion Plan (con’t)

BUDGETING FOR PERSONAL SELLINGBUDGETING FOR PERSONAL SELLING Recruiting CostsRecruiting Costs Training CostsTraining Costs Travel ExpensesTravel Expenses Promotional Material - Samples, Catalogs, Product Promotional Material - Samples, Catalogs, Product Brochures Brochures Salaries & BenefitsSalaries & Benefits Incentive Programs - Bonuses & RewardsIncentive Programs - Bonuses & Rewards

3.203.20

The Promotion Plan (con’t)The Promotion Plan (con’t)

STRATEGYSTRATEGY

Mechanism by which Something is DoneMechanism by which Something is Done Account Planner Assists in StrategyAccount Planner Assists in Strategy

Works in Advertising Agency & Synthesizes Works in Advertising Agency & Synthesizes all Relevant Audience Research to Formulate all Relevant Audience Research to Formulate Promotional StrategyPromotional Strategy

3.213.21

The Promotional Plan (con’t)The Promotional Plan (con’t)

EVALUATIONEVALUATION

Marketer Determines How Promotional Program Marketer Determines How Promotional Program has Performed - Factor by Factorhas Performed - Factor by Factor

Main Basis for Evaluation - Communications and Main Basis for Evaluation - Communications and Sales Objectives Set for the ProgramSales Objectives Set for the Program

Chapter 15 - Measuring the Effectiveness of Chapter 15 - Measuring the Effectiveness of Promotion & IMC - Will Cover in DetailPromotion & IMC - Will Cover in Detail

3.223.22

Evaluation of the IMC Program Will Include the Effect Evaluation of the IMC Program Will Include the Effect on Sales of Various Promotional Toolson Sales of Various Promotional Tools

IMC Management & PlanningIMC Management & Planning

STRATEGIC PLANNING OF IMC IS DIFFERENT FROM TRADITIONAL USE OF STRATEGIC PLANNING OF IMC IS DIFFERENT FROM TRADITIONAL USE OF MULTIPLE PROMOTIONAL TOOLSMULTIPLE PROMOTIONAL TOOLS

Outside-in ApproachOutside-in Approach IMC Management Planning Requires Comprehensive IMC Management Planning Requires Comprehensive & Detailed Knowledge & Detailed Knowledge

CustomersCustomers ProspectsProspects

Knowledge about Customer & ProspectsKnowledge about Customer & Prospects IMC Management Plan - Built Around Brand CommunicationsIMC Management Plan - Built Around Brand Communications Control of IMC Management & Planning - CentralizedControl of IMC Management & Planning - Centralized

Firms Appointing IMC or Marcom ManagersFirms Appointing IMC or Marcom Managers

3.243.24

IMC Management & Planning (con’t)IMC Management & Planning (con’t)

MODEL OF IMC MANAGEMENT & PLANNINGMODEL OF IMC MANAGEMENT & PLANNING IMC Model Considers Complete ProcessIMC Model Considers Complete Process

Uses Promotion to Communicate to Target Uses Promotion to Communicate to Target MarketsMarkets

Effectively Deploys Promotional ToolsEffectively Deploys Promotional Tools Corporate & Marketing Plans - Understood and Adopted Corporate & Marketing Plans - Understood and Adopted

as Part of IMC Planas Part of IMC Plan Databases - Help Identify & Profile Target MarketsDatabases - Help Identify & Profile Target Markets Promotional Objective - Dictate Mix of Promotional Tools Promotional Objective - Dictate Mix of Promotional Tools

to Pursue for each Targetto Pursue for each Target

3.253.25