Promotion and Distribution

Better Business1st EditionPoatsy · Martin

© 2010 Pearson Education, Inc. 1

chap

ter14

Slide presentation prepared by Pam JansonStark State College of Technology

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Learning Objectives1. What is a promotional mix, and what is its function in a

promotional campaign?2. What are the different categories of advertising, and

what role do these categories play in business and society?

3. How are the various public relations tools essential to the marketing mix?

4. What are the six steps in the personal selling process?5. What are the two main types of sales promotions, and

what types of tools are commonly used as incentives?6. Why are marketing intermediaries and distribution

channels important elements in marketing?7. What types of services do agents/brokers and

wholesalers provide? 8. Why are retailing and physical distribution key aspects

of distribution?© 2010 Pearson Education, Inc.

Publishing as Prentice Hall 3

What Is Promotion?

• All of the techniques marketers use to inform targeted customers of the benefits of a product and to persuade them to purchase the good, service, or idea

• Increases brand awareness, brand loyalty, and sales

• One of the most visible components of the marketing mix

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The Promotional Mix

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Promotional Campaign Steps

1. Identify target market. 2. Determine marketing objectives. 3. Design the message. 4. Determine the budget. 5. Implement the promotional mix.6. Evaluate and adjust as needed.

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Integrated Marketing Communication

• Strategy to deliver a clear, consistent, and unified message about the company and its products to customers at all contact points

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Advertising in Business and Society

• Advertising is paid, impersonal mass communication from an identified sponsor to influence a targeted audience

• Effective advertising builds brand awareness, association, loyalty and equity

• Advertising informs consumers

• Advertising industry creates jobs

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Types of Advertising

• Product • Corporate (or

institutional)• Comparative• Retail (or local)• Business-to-

business• Nonprofit• Public service

• Advocacy• Interactive • Internet

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Advantages and Disadvantages of Advertising Media: Part 1

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Advertising Trends

• Internet advertising

• Product placement and infomercials

• Global advertising

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Public Relations

• The management function that establishes and maintains mutually beneficial relationships between an organization and its stakeholderso Stakeholders include all interested parties,

including consumers, stockholders, employees, suppliers, the government, and the public in general

• The purpose is to maintain a positive image of the organization in stakeholders’ minds

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Public Relations Tools

• Controlled messageso Corporate, advocacy, and public service

advertising and corporate reports publishing

• Semicontrolled messageso Messages are placed on Web sites, in

chat rooms, and on blogso Sponsorships

• Uncontrolled messageso Publicity

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Publicity

• Information about an individual, organization, or product transmitted through mass media at no charge

• Advantages o Freeo Often more believable as it is presented as

a news story

• Disadvantageso Actual message and timing controlled by

the media, not the sellero Bad news gets shared too

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Personal Selling

• Direct communication between a firm’s sales force and potential buyers to make a sale and to build good customer relationships

• Most expensive part of the promotional mix as a salesperson deals with one buyer at a time

• Preferred with high-value, custom-made, or technically complex products

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Types of Salespeople

• Order getters o Creative selling

• Order takers • Support personnel

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The Personal Selling Process

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Consumer Sales Promotion Tools

• Coupons• Rebates• Frequent-user incentives• Point-of-purchase displays• Free samples• Contests and sweepstakes• Advertising specialties• Others: BOGO, catalogs,

demonstrations, premiums, etc.

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Trade Sales Promotions• Trade shows and conventions• Trade allowances • Cooperative advertising • Free merchandise• Sales contests • Dealer listings• Catalogs and store demonstrations• In-store displays• Quantity discounts• Training and support programs

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Advantages and Disadvantages of the Promotional Tools

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Distribution

• The last of the 4 Ps (place)• Makes products available to

consumers when and where consumers want them

• Managing the entire process is called supply-chain management

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Marketing Intermediaries

• A business firm that operates between producers and consumers or business userso Wholesalerso Agents/brokerso Retailers

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• The distribution channel is the whole set of marketing intermediaries who get goods from manufacturers to final consumers

Why Are Inter-

mediaries Needed?

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Types of Distribution Channels

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Methods of Distribution:Wholesaling

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Types of Wholesalers

• Merchant wholesalerso Full-service wholesalers

• Wholesale merchants• Industrial distributors

o Limited-service wholesalers• Cash-and-carry wholesalers• Truck wholesalers• Drop shippers• Rack jobbers

© 2010 Pearson Education, Inc. Publishing as Prentice Hall 26

Agents/Brokers

• Facilitate buying and selling• Do not take title to products• Typically earn a commission on the sale• Agents are hired on a more permanent

basis than brokers are• Types

o Manufacturers’ agents o Selling agentso Purchasing agents

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Retail Strategies

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Types of Retailers

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Non-Store Retailers

• Electronic shopping• Vending machines• Kiosks and carts• Telemarketing• Direct selling• Direct marketing

o Catalog sales, direct mail, telemarketing, infomercials

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Retail Organization

• Corporate chain storeso Safeway, Sears, Wal-Mart

• Wholesale groupso Independent Grocers Alliance (IGA),

Western Auto, True Value, Associated Grocers, and Ace

• Franchiseso McDonald’s, Subway, KFC, Pizza Hut,

Jiffy Lube, and Holiday Inn© 2010 Pearson Education, Inc.

Publishing as Prentice Hall 31

Physical Distribution

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Warehousing and Inventory Control

• Storage warehouses store goods from moderate to long periods of time

• Distribution warehouses (or distribution centers) are designed to gather and move goods quickly to consumers

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Benefits and Costs of Transportation Modes

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Chapter Summary1. What is a promotional mix, and what is its function in a

promotional campaign?2. What are the different categories of advertising, and what

role do these categories play in business and society?3. How are the various public relations tools essential to the

marketing mix?4. What are the six steps in the personal selling process?5. What are the two main types of sales promotions, and

what types of tools are commonly used as incentives?6. Why are marketing intermediaries and distribution

channels important elements in marketing?7. What types of services do agents/brokers and

wholesalers provide? 8. Why are retailing and physical distribution key aspects

of distribution?

© 2010 Pearson Education, Inc. Publishing as Prentice Hall 35

Beyond the Book

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Leading Media CompaniesMEDIA

COMPANY:Time Warner Comcast Walt Disney News Corp.* DirecTV

2006 $33,993 $27,392 $16,838 $14,091 $13,744

% CHANGE 6 11.9 9 9.6 12.5

NEWSPAPER $0 $0 $0 $249 $0

MAGAZINE $3,604 $0 $366 $0 $0

TV $397 $0 $5,394 $5,121 $0

RADIO $0 $0 $147 $0 $0

CABLE NETWORKS

$6,970 $1,053 $6,757 $3,848 $0

CABLE SYSTEMS

$11,738 $26,339 $0 $0 $13,744

DIGITAL $5,458 $0 $280 $385 $0

MOVIE $2,909 $0 $2,671 $2,954 $0

OTHER $2,919 $0 $1,224 $1,534 $0

© 2010 Pearson Education, Inc. Publishing as Prentice Hall 37

Note: Dollars in millions

Product Placement Hall of Fame

Movie Product

Cast Away FedEx, Wilson

I Am Legend Ford, Apple

You’ve Got Mail AOL, Starbucks

Harold & Kumar Go to White Castle White Castle

Men in Black II Mountain Dew, Burger King, eBay

Talladega Nights: The Ballad of Ricky Bobby

Wonder Bread

Top Gun Department of the Navy, Ray-Ban

Transformers GM

E.T. the Extra-Terrestrial Reese’s Pieces

© 2010 Pearson Education, Inc. Publishing as Prentice Hall 38

NO-AD Suncare

• NO-AD Suncare is manufactured by Solar Cosmetic Labs of Miami, Florida

• The NO-AD line was introduced in 1960• NO-AD’s goal is to provide the best

quality products at the lowest price• NO-AD offers twice the size product for

the same price as the national brands• Products include sunscreen, sunless

tanner, and face and lip sun block• There is no advertising for this product

line© 2010 Pearson Education, Inc.

Publishing as Prentice Hall 39

Tiffany’s and Nelson Peltz, Activist Marketer

• Nelson Peltz is a partner in Trian

• Trian has a 8.4% stake in Tiffany

• Peltz and his partners suggested that Tiffany:o Sell watches in stores other

than Tiffany’so Focus on women buying

jewelry for themselves• Tiffany has implemented these

ideas and others to improve its marketing mix

© 2010 Pearson Education, Inc. Publishing as Prentice Hall 40