• Understand the communication model

• List and describe the elements of the promotion mix

• Explain the stages in developing the promotion plan

• Explain the current trend toward interactive promotion strategies

• Explain why database marketing is increasingly popular and how databases are developed and managed

• Explain how firms implement integrated marketing communications and why some marketers resist it

Role of Promotion

• Promotion is communication by marketers that informs, persuades, reminds, and builds relationships with potential buyers of a product to influence an opinion or elicit a response.

• IMC is a plan for optimal use of the elements of promotion: advertising, personal selling, sales promotion, and public relations

The Communications Model

Source

Noise

Feedback

Message Medium

Receiver

encoding decoding

Promotion Mix

• Advertising

• Sales Promotions

• Public Relations

• Personal Selling

Control Continuum

AdvertisingAdvertisingSales

PromotionSales

Promotion

PublicRelationsPublic

Relations

PersonalSelling

PersonalSelling

Word ofMouth

Word ofMouth

High Low

Promotional Tools

Marketershave manyoptionsfor promotions.

Appeals

• Personal appeals allow for direct interaction between a company representative and a customer– personal selling

• Mass appeals seek to reach many prospective customers at the same time– advertising– sales promotion– public relations

Advertising

• Non-personal communication from an identified sponsor using the mass media

– can convey rich and dynamic images

– can establish and reinforce brand identity

– can communicate factual information

– can remind customer to buy

Sales Promotion

• Programs that build interest or encourage purchase of a product through the use of an incentive in a specified time period

– coupons

– contests

– rebates

– premiums

Publicity and Public Relations

• Portray an organization and its products positively by influencing the perceptions of various publics– writing press releases– holding special events– conducting and publishing consumer

surveys– putting a positive spin on negative news

Developing the Promotion Plan

• Framework for developing, implementing, and controlling the firm’s promotional activities

Stages in Developing the Promotion Mix

Step 1: Establish Promotion Objectives

• Objectives will change depending on where consumers are on the path to loyalty

• Some objectives might be

– create awareness

– inform the market

– create desire

– encourage trial

– build loyalty

Up the Promotional Road

Objectives

Curad seeksto informconsumersabout its benefits.

Step 2: Identify Influence on the Promotion Mix

• Mix must be tailored for each situation– Will company use push or pull strategy?

• Push means that the company seeks to move its products through the channel by convincing channel members to offer them and entice their customers to select these items

• Pull means that the company relies on consumers to learn about and express desire for its products

Effects of Time and the PLC

• Introduction phase: push strategy; mix relies heavily on advertising, sales promotions, and public relations

• Growth phase: heavy advertising with emphasis on differentiation

• Maturity phase: emphasis on sales promotions to encourage brand switching

• Decline phase: dramatic reductions in promotional spending

Advertising and the PLC

During the growthstage of the PLC,an emphasis onproduct benefits isappropriate.

Step 3: Determine and Allocate the Total Promotion Budget

• Top-down budgeting techniques

– percentage-of-sales method

– competitive parity

• Bottom-up budgeting technique

– objective-task method

Step 4: Allocate Budget to Specific Promotion Mix

• Organizational factors

• Market potential

• Market size

Step 5: Designing the Promotion Mix

• Which elements of promotion will be used?

• What message is to be communicated?

– Type of appeal?

– Structure of appeal?

• What communication channels should be employed?

• What role will advertising, sales promotion, public relations, and selling play?

Emotional Appeal

Emotional appeals like these can create strong feelings toward a brand.

The AIDA Model

• Attention

• Interest

• Desire

• Action

Step 5: Evaluate the Effectiveness of the Promotion Mix

• Is the plan working?

– Measure response to sales promotions

– Measure brand awareness, recall, and image before and after ad campaign

– Analyze and compare sales performances by territory and sales force

– Clip articles appearing in media

Interactive Marketing

• Attention Economy– The amount of information seems infinite; our

ability to get it is limited by the time we can spend looking

– Interactive media are in the business of buying and selling people’s attention

• Customized marketing communications yield a measurable response in the form of a purchase or request for more information

De-Mass Marketing

• Companies once focused on mass marketing are increasingly segmenting and customizing promotions for small targets

Levels of Interactive Response

• First-order response: product offer directly yields a transaction

• Second-order response: product offer results in some form of customer feedback but it isn’t a transaction

– request for more information

– request NOT to receive more information

Database Marketing

• Critical to interactive marketers as they seek to track responses to messages and develop a dialogue with customers

• Allows the organization to learn customer preferences, fine-tune and test offerings, build relationships

Database Marketing

• Is interactive

• Builds relationships

• Locates new customers

• Stimulates cross-selling

• Is measurable

• Is trackable

Putting It All Together

• Integrated Marketing Communications (IMC) is “a strategic business process used to plan, develop, execute, and evaluate coordinated, measurable, persuasive brand communication programs over time with consumers, customers, prospects, and other targeted, relevant external and internal audiences.”

The Integrated Communications Perspective

MSN

Microsoft practicesIMC by coordinatingprint advertisingwith otherelements of its promotional mix.

Characteristics of IMC Approach

• Focus on customer need for communications• Reliance on customer database to focus messages• Use of consistent messages via diverse

communications vehicles• Careful planning of message delivery to generate a

steady stream of consistent information• Use of several elements of the promotional mix

Integrated Marketing Model

The IMC Planning Model

• Start with a Customer Database

• Develop Promotional Strategies

• Implement Specific Promotional Tactics

• Evaluate IMC Communications

– First-order responses

– Second-order responses

– Attitudes toward brand and firm

Barriers to Acceptance of IMC

• Requires changes in planning and implementation of promotional strategies

• Puts more weight on promotional aspects other than advertising

• Requires upper-level management to view other aspects of the marketing mix as part of the communications strategy

• Requires company-wide commitment• Traditional ad agencies may not be equipped to handle a

true IMC campaign