Chapter 9 PROMOTION

Objectives Developing & Managing an

Advertising Program Deciding on Media & Measuring

Effectiveness Sales Promotion Public Relation Principles of Personal Selling

Major Decisions in AdvertisingMajor Decisions in Advertising

Objectives SettingObjectives Setting

Budget DecisionsBudget Decisions

Message DecisionsMessage Decisions Media DecisionsMedia Decisions

Campaign EvaluationCampaign Evaluation

Informative AdvertisingBuild Primary Demand

Informative AdvertisingBuild Primary Demand

Persuasive AdvertisingBuild Selective Demand

Persuasive AdvertisingBuild Selective Demand

Comparison AdvertisingCompares One Brand to

Another

Comparison AdvertisingCompares One Brand to

Another

Reminder AdvertisingKeeps Consumers Thinking

About a Product.

Reminder AdvertisingKeeps Consumers Thinking

About a Product.

Advertising Objectives

Specific Communication Task Accomplished with a Specific Target Audience During a Specific Period of Time

The Five Ms of Advertising

Mission

Salesgoals

Adver-tisingobjectives

Money

Factors toconsider:

Stage in PLC

Market shareand con-sumer base

Competitionand clutter

Advertisingfrequency

Productsubstituta-bility

Message

Message generation

Message evaluationand selection

Message execution

Social-responsibilityreview

MediaReach, frequency,impactMajor media typesSpecific mediavehicles

Media timingGeographicalmedia allocation

Measure-ment

Communi-cationimpact

Salesimpact

Advertising Budget Factors

Stage in the Product Life Cycle

Market Share &Consumer Base

Competition &Clutter

AdvertisingFrequency

ProductSubstitutability

Profiles of Major Media Types

NewspapersAdvantages: Flexibility, timeliness; good local market coverage;

broad acceptance, high believability

Limitations: Short life; poor reproduction quality; smallpass-along audience

TelevisionAdvantages: Combines sight, sound, motion; high attention; high reach; appealing to senses

Limitations: High absolute costs; high clutter; fleeting exposure;less audience selectivity

Direct MailAdvantages: Audience selectivity; flexibility, no ad compe-

tition within same medium; allows personalization

Limitations: Relative high cost; “junk mail” image

RadioAdvantages: Mass use; high geographic and demographic

selectivity; low cost

Limitations: Audio only; fleeting exposure; lower attention; nonstandardized rates; fragmented audiences

MagazinesAdvantages: High geographic and demographic selectivity;

credibility and prestige; high-quality reproduction;long life; good pass-along readership

Limitations: Long ad purchase lead time; waste circulation; no guarantee of position

OutdoorAdvantages: Flexibility; high repeat exposure; low cost; low message competition

Limitations: Little audience selectivity; creative limitations

Profiles of Major Media Types

Classification ofAdvertising Timing Patterns

Month

Number ofmessagesper month

Concen-trated

(1) (2) (3)Level Rising Falling Alternating

(4)

Continuous

(8)(7)(6)(5)

(9)Inter-

mittent

(10) (11) (12)(9)

Advertising StrategyMessage ExecutionAdvertising StrategyMessage Execution

TypicalMessage

ExecutionStyles

TypicalMessage

ExecutionStyles

TestimonialEvidence

TestimonialEvidence Slice of LifeSlice of Life

ScientificEvidence

ScientificEvidence

LifestyleLifestyle

TechnicalExpertise

TechnicalExpertise

FantasyFantasy

MusicalMusical

PersonalitySymbol

PersonalitySymbol

Mood orImage

Mood orImage

Turning the “Big Idea” Into an Actual Ad to Capture the Target Market’s Attention and Interest.

Advertising Program EvaluationAdvertising Program Evaluation

Communication Effects

Is the Ad Communicating Well?

Communication Effects

Is the Ad Communicating Well?

Advertising Evaluation

Sales Effects

Is the Ad Increasing Sales?

Sales Effects

Is the Ad Increasing Sales?

Why the increase in Sales Promotion? Growing retailer power Declining brand loyalty Increased promotional sensitivity Brand proliferation Fragmentation of consumer market Short-term focus Increased managerial accountability Competition Clutter

Long-Term Promotional Allocation

0

10

20

30

40

50

60

1986 88 90 92 94 1996

Year

%t

of

tota

l -

3 yr

.MA

Trade Promo

Media Adv

Cons. Promo

Cox Direct 19th Annual Survey of Promotional PracticesCox Direct 19th Annual Survey of Promotional Practices

Channels of Sales Promotions

MANUFACTURER

RETAILER

TradeTradePromotionsPromotions

CONSUMER

ConsumerConsumerPromotionsPromotions

Push

PushPullRetailRetail

PromotionsPromotions

Consumer PromotionConsumer Promotion

Consumer-Promotion Objectives

Consumer-Promotion Tools

Point-of-PurchaseDisplays

Point-of-PurchaseDisplays

PremiumsPremiums

Price PacksPrice Packs

Cash RefundsCash Refunds

CouponsCoupons

SamplesSamples

Patronage Rewards

Patronage Rewards

GamesGames

SweepstakesSweepstakes

ContestsContests

AdvertisingSpecialties

AdvertisingSpecialtiesPatronage Rewards

Entice Consumers to Try a New Product

Entice Consumers to Try a New Product

Lure Customers AwayFrom Competitors’ Products

Lure Customers AwayFrom Competitors’ Products

Get Consumers to “Load Up’on a Mature Product

Get Consumers to “Load Up’on a Mature Product

Hold & Reward Loyal Customers

Hold & Reward Loyal Customers

Consumer Relationship Building

Consumer Relationship Building

“ Deal Proneness,”Liechtenstein, Burton, & Netemeyer, Journal of Retailing, Summer 1997

Examination of “deal proneness” among consumers in a supermarket setting

Surveys & Grocery Receipts used Eight types of deals:

Cent-off, One-free, Gift, Display, Rebate, Contest, Sale, & Coupon

“ Deal Proneness,”Liechtenstein, Burton, & Netemeyer

Cluster analysis yielded two interpretable results:

49% are “deal prone,” 51% not 24% High “Deal prone,” 50%

intermediate, 26% deal insensitive “Deal-proneness” a generalized

construct - (crosses type of promotion) Younger & Less educated more likely to

be deal prone

Trade-Promotion Objectives

Trade-Promotion Tools

Specialty Advertising

Items

Specialty Advertising

ItemsContestsContests

Free GoodsFree Goods

Buy-BackGuarantees

Buy-BackGuarantees

AllowancesAllowances

Price-OffsPrice-Offs

Patronage Rewards

Patronage Rewards

Push MoneyPush Money

DiscountsDiscounts

PremiumsPremiums

Displays

Persuade Retailers or Wholesalers to Carry a Brand

Persuade Retailers or Wholesalers to Carry a Brand

Give a Brand Shelf SpaceGive a Brand Shelf Space

Promote a Brand in Advertising

Promote a Brand in Advertising

Push a Brand to ConsumersPush a Brand to Consumers

Trade Promotions

Business-Promotion Objectives Business-Promotion

ToolsGenerate Business LeadsGenerate Business Leads

Stimulate PurchasesStimulate Purchases

Reward CustomersReward Customers

Motivate SalespeopleMotivate Salespeople

ConventionsConventions

Trade ShowsTrade Shows

Sales ContestsSales Contests

Business-to-Business Promotion

SpecialEvents

SpecialEvents

Written MaterialsWritten

Materials

Corporate Identity Materials

Corporate Identity Materials

SpeechesSpeeches

NewsNews

AudiovisualMaterials

AudiovisualMaterials

Major Public Relations ToolsMajor Public Relations Tools

Public Service

Activities

Public Service

Activities

Web SiteWeb Site

When might you decide to use Personal Selling?

Tight budget (straight commission)

Concentrated Market Few buyers High value product

Product must be customized Personal contact important Must demonstrate product Product involves trade-in/up

Sales force objectivesSales force objectives

Sales force strategySales force strategy

Sales force structureSales force structure

Sales force sizeSales force size

Sales force compensation

Sales force compensation

Designing the Sales ForceDesigning the Sales ForceDesigning the Sales ForceDesigning the Sales Force

Sales Force Structures

ComplexityComplexity

TerritorialTerritorial ProductProduct

MarketMarket

Workload Approach to Sales Force Size Classify customers by size Determine desirable call frequencies Determine total sales calls needed per

year Determine average number of sales

calls per sales representative per year Divide total by number per rep

Sales Force Compensation Fixed Variable Expense Allowances Benefits

Recruiting & selecting sales representatives

Recruiting & selecting sales representatives

Training sales representativesTraining sales representatives

Supervising sales representativesSupervising sales representatives

Motivating sales representativesMotivating sales representatives

Managing the Sales ForceManaging the Sales ForceManaging the Sales ForceManaging the Sales Force

Evaluating sales representativesEvaluating sales representatives

Time and Duty Analysis

PreparationPreparation

TravelTravel

Food & BreaksFood & Breaks

WaitingWaiting

SellingSelling

AdministrationAdministration

Satisfaction

Rewards

Performance

Effort

Motivation

Sales Representative Motivation

Evaluating SalespeopleEvaluating Salespeople

Sources of InformationSources of

Information

AnnualTerritory

Marketing Plan

AnnualTerritory

Marketing Plan

WorkPlan

WorkPlan

CallReports

CallReports

Training in sales techniques & professionalism

Training in sales techniques & professionalism

Negotiation skillsNegotiation skills

Relationship-building skillsRelationship-building skills

Improving Sales Force Improving Sales Force EffectivenessEffectiveness

Improving Sales Force Improving Sales Force EffectivenessEffectiveness

The Zone of Agreement

Zone of agreementZone of agreement

Seller’s surplusSeller’s surplus

Seller’s reservation Seller’s reservation price (seller wantsprice (seller wants

ss or more) or more)

Seller wants to moveSeller wants to movexx to the right to the right

ssBuyer’s reservation Buyer’s reservation price (buyer wantsprice (buyer wants

bb or less) or less)

Buyer wants to moveBuyer wants to movexx to the left to the left

bbxx

FinalFinalcontractcontract

$

Buyer’s surplusBuyer’s surplus

Performance Evaluation Current-to-Past Customer Satisfaction Qualitative Evaluation

Step 1. Prospecting and Qualifying

Step 1. Prospecting and Qualifying

Identifying and Screening For Qualified Potential Customers.

Steps in the Selling ProcessSteps in the Selling Process

Learning As Much As Possible About a Prospective Customer

Before Making a Sales Call.

Learning As Much As Possible About a Prospective Customer

Before Making a Sales Call.Step 2. Pre-approachStep 2. Pre-approach

Step 3. ApproachStep 3. ApproachKnowing How to Meet the Buyer

to Get the Relationship Off to a Good Start.

Knowing How to Meet the Buyerto Get the Relationship Off

to a Good Start.

Step 4. Presentation/ Demonstration

Step 4. Presentation/ Demonstration

Telling the Product “Story” to the Buyer, and Showing the

Product Benefits.

Telling the Product “Story” to the Buyer, and Showing the

Product Benefits.

Steps in the Selling ProcessSteps in the Selling Process

Step 5. Handling Objections Step 5. Handling Objections

Step 6. Closing Step 6. Closing

Step 7. Follow-Up Step 7. Follow-Up

Seeking Out, Clarifying, and Overcoming

Customer Objections to Buying.

Asking the Customerfor the Order.

Following Up After the Sale toEnsure Customer Satisfaction

and Repeat Business.

Alternative Steps:

Find ’emFind ’em

Grab ‘emGrab ‘em

Show ‘emShow ‘em

Answer ‘emAnswer ‘em

Sell ‘emSell ‘em

Keep ‘emKeep ‘em