Using Effective

Promotions

Chapter 16

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

1. Identify the new and traditional tools that make up the promotion mix.

2. Contrast the advantages and disadvantages of various advertising media, including the Internet and social media.

3. Illustrate the steps of the B2B and B2C selling processes.

LEARNING GOALSChapter Sixteen

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4. Describe the role of the public relations department, and show how publicity fits in that role.

5. Assess the effectiveness of various forms of sales promotion, including sampling.

6. Show how word of mouth, e-mail marketing, viral marketing, blogging, podcasting, and mobile marketing work.

LEARNING GOALSChapter Sixteen

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Profile

• Groupon grew faster than any e-company in history, from $740 million in 2010 to $4 billion in 2011.

• Google offered $6 billion in December 2010, but Mason rejected the offer.

• GrouponNow offers a variety of discounts via smartphone.

ANDREW MASONGroupon

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NAME that COMPANYChapter Sixteen

This beverage company has 8.5 million Facebook fans. It posts two daily messages and then monitors how many times each message is reviewed, how many times it is shared, and what the fan response to the messages are. It also uses Facebook to test potential ads before airing them on traditional media like TV.

Name that company!

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Promotion and the Promotion Mix

• Promotion Mix -- The combination of promotional tools an organization uses. The traditional mix includes:

PROMOTION in an ORGANIZATIONLG1

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• Integrated Marketing Communication (IMC) -- Combines the promotional tools into one comprehensive strategy. IMC is used to:

- Create a positive brand image.

- Meet the needs of consumers.

- Meet the strategic marketing and promotional goals of the firm.

INTEGRATED MARKETING COMMUNICATION (IMC)LG1

Promotion and the Promotion Mix

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• Amy Scherber of Amy ’s Bread can’t afford to outsource her promotions, so she needs to get creative.

• She sends newspaper editors stories about her company and has an assortment of company shirts.

• She builds strong word-of-mouth by keeping in touch with her community members.

FRESH-BAKED PROMOTIONSpotlight on Small Business

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1. Identify a target market

2. Define objectives

3. Determine a promotional budget

4. Develop a unifying message

5. Implement the plan

6. Evaluate effectiveness

STEPS in a PROMOTIONAL CAMPAIGNLG1

Promotion and the Promotion Mix

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CLASSIC CAMPAIGNSBrilliant Marketing IdeasLG1

Promotion and the Promotion Mix

Source: Entrepreneur, February 2010 and Entrepreneur, February 2011.

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Advertising: Informing, Persuading and Reminding

• Advertising -- Paid, non-personal communication through various media by organizations and individuals who are in some way indentified in the message.

• Major goals of advertising:

- Inform

- Persuade

- Remind

ADVERTISING in the FIRMLG2

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• Total advertising expenditures exceed $241 billion yearly.

• Consumers benefit because production costs of TV programs, radio programs, newspapers and magazines are paid for by advertisers.

• Marketers choose ad media that will reach the target market.

IMPACT of ADVERTISINGLG2

Advertising: Informing, Persuading and Reminding

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• Social media advertising is growing so fast, marketers can’t keep up.

• Starbucks has over 12 million followers on Twitter.

• McDonald’s has over 7 million fans on Facebook.

SOCIAL ADVERTISINGLG2

Advertising: Informing, Persuading and Reminding

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c

MAJOR CATEGORIES of ADVERTISING

Category What it is

Retail From retail stores to consumers

Trade From manufacturers to wholesalers and retailers

B2B From manufacturers to other manufacturers

Institutional Creates a desirable image for an organization

Product Creates a desirable image for a product or service

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Advertising: Informing, Persuading and Reminding

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MAJOR CATEGORIES of ADVERTISING

(Continued)

Category What it is

Advocacy Supports a particular view of an issue

Comparative Compares competing products

InteractiveCustomer-oriented ads that allows customers to

choose information to receive

Online Computer ads featured on different sites

Mobile Ads that reach consumers on cell phones

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Advertising: Informing, Persuading and Reminding

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ADVERTISING EXPENDITURE by MEDIA in $ MILLIONS

Rank MediaProjected 2010

Spending

1 Direct Mail $52.3

2 Broadcast TV 36.8

3 Newspaper 23.4

4 Cable TV 27

5 Radio 15.9

6 Yellow Pages 11.9

7 Consumer Magazine 9.1

8 Internet 25.3

Other 39.7

Total 241.4

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Advertising: Informing, Persuading and Reminding

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1. Plan: What should your mailing accomplish?

2. Get the Right List: The better the list, the better your chance of success.

DEAR MR. POSTMAN…Steps in Launching a Direct-Mail Campaign

3. Stand Out: Make your ad like no other.

4. Get Help: Contact a marketing firm with direct mail experience.

5. Follow Up: One mailing is not enough.

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Promotion and the Promotion Mix

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• “Everybody doesn’t like something, but nobody doesn’t like ___________.”

• “We bring good things to life.”

• “It takes a licking and keeps on ticking.”

• “With a name like _________, it has to be good.”

• “Good to the last drop.”

• “Betcha can’t eat just one!”

• “Because you’re worth it.”

MATCH GAMEMatch the Company with the SloganLG2

Advertising: Informing, Persuading and Reminding

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IT’S a DOG’S LIFEFamous and Not-so-Famous Dogs in AdvertisingLG2

Advertising: Informing, Persuading and Reminding

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Television Advertising

• TV advertising is still the dominant media.

• Digital Video Recorders (DVRs) challenge TV advertising because viewers can skip ads.

POPULAR ADVERTISING MEDIALG2

• Product Placement -- Advertisers pay to put their products into TV shows and movies where the audience will see them.

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LET’S GO to the MOVIESMemorable Product Placements of 2011LG2

Source: Fortune, February 28, 2011.

Television Advertising

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Infomercials and Online Advertising

• Infomercial -- A full length TV program devoted exclusively to promote a particular product.

• Online ads are attempts to get potential customers to a web site to learn about a product.

• Interactive Promotion -- Allows marketers to open a dialogue between buyers and sellers and let them work together to create a beneficial exchange.

INFOMERCIALS and ONLINE ADVERTISINGLG2

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• Veg-O-Matic

• Ginsu Knives

• The Clapper

• Thigh Master

• George Foreman Grill

• Bowflex

INFOMERCIAL HALL of FAMEThe Biggest Hits Over the Past 40 Years

Source: Fortune, www.fortune.com, accessed July 2011.

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Infomercials and Online Advertising

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1. Brand messaging is key.

2. Site must be easy to navigate.

3. Make sure calls to action are effective.

4. Users want fast, readable sites.

5. Users with disabilities should be able to navigate.

ONLINE EXPERIENCEHow to Avoid Losing Customers Over a Bad Web Site

Source: Entrepreneur, October 2010.

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Infomercials and Online Advertising

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• National Trust for Historic Preservation believes that investing in social media helps the Trust reach certain goals, such as building awareness for preservation.

• Kassie Rempel of SimplySoles sends out hand written thank-you notes and increases social media accessibility. Both can help marketers relate to customers on a personal level.

SOCIAL MEDIA COMPLEMENTS OTHER PROMOTION

(Social Media in Business)

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1. Be wary of requests for money transfers -- even from friends’ accounts.

2. Be wary when you use applications. Don’t give unnecessary information.

3. Use URL expanders to see the full address of links on friends’ pages.

SOCIAL SCAMMERSHow to Protect Yourself From Schemers

Source: Kiplinger’s Personal Finance, December 2010.

Photo Courtesy of: Paul Klintworth

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Using Social Media to Monitor Ad Effectiveness

• Dr. Pepper posts messages on Facebook and monitors the results from their over 8.5 million fans.

• Richard Branson and Tony Hsieh all tweet their customer base to maintain two-way communication.

MONITORING AD EFFECTIVENESSLG2

Photo Courtesy of: Brent Moore

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1. Create a strong persona.

2. Have customers play along through Twitter and Facebook.

3. Engage bloggers.

4. Personalize the experience.

5. Keep your videos short and sweet!

SOCIALLY SUPERIOR Lessons From the Wisdom of the Old Spice Man

Source: Entrepreneur, September 2010.

Using Social Media to Monitor Ad Effectiveness

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Photo Courtesy of: Dirk Houbrechts

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You have received personal info on your phone about fellow workers, including your boss. You know that the info could lead to firing of those workers and managers. You also know that other workers have received the same info.

Should you pass it along to your immediate supervisor or not?

What are the ethical issues involved? What would you do? What do you expect to be the consequences of your

actions?

ELECTRONIC ETHICS (Making Ethical Decisions)

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Global Advertising

• Requires marketers to develop a single product and promotional strategy to implement worldwide.

• Problems can arise in global markets with using one advertising campaign in all countries - especially bad translations.

GLOBAL ADVERTISINGLG2

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• India's 700 million rural consumers are spending more than ever.

• International brands are sending salesmen to reach these customers by giving free Castrol oil changes for tractors, passing out bowls of Nestlé noodles, and selling Unilever soaps.

• These salesmen must be aware of social customs to be successful.

PROMOTION in RURAL INDIA

(Reaching Beyond Our Borders)

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Personal Selling: Providing Personal Attention

• Personal Selling -- The face-to-face presentation and promotion of a product, including the salesperson’s search for new prospects and follow-up service.

PERSONAL SELLING

• Salespeople need to listen to customer needs, help reach a solution and do everything possible to make the transaction as simple as possible.

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1. Prospect and qualify

2. Pre-approach

3. Approach

4. Make a presentation

5. Answer objections

6. Close the sale

• Trial Close -- A statement or question that moves the process toward the purchase.

7. Follow up

STEPS in the SELLING PROCESSLG3

Steps in the Selling Process

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Steps in the Selling Process

• Prospecting -- Researching potential buyers and choosing those most likely to buy.

PROSPECTING and QUALIFYING in SELLING

• Qualifying -- Making sure customers have a need for a product, the authority to buy and the willingness to listen to a sales message.

• Prospect -- A customer who meets the qualifying criteria.

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• Know your competition

• Understand your customer’s business

• Differentiate your product or service

• Sell to the people most likely to buy

• Build relationships

• Put the right people in the right selling spots

BUY THIS!Successful Selling StrategiesLG3

Steps in the Selling Process

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• Not feeling the customer’s pain

• Making money is the only goal

• Seeing sales as just a job

• Getting upset during the presentation

• Failing to properly prepare or over-preparing

• Not being yourself

• Neglecting the relationship

WHOOPS!Sales Slip-Ups

Source: Fortune Magazine.

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Steps in the Selling Process

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STEPS in the B2C SELLING PROCESSLG3

The Business-to-Consumer Sales Process

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Progress Assessment

• What are the four traditional elements of the promotion mix?

• What are the three most important advertising media in order of dollars spent?

• What are the seven steps in the B2B selling process?

PROGRESS ASSESSMENT

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Public Relations: Building Relationships

• Public Relations (PR) -- Evaluates public attitudes, changes policies and procedures in response to the public, and executes a program of action and information to earn public understanding and acceptance.

• 3 steps of a good PR program:

1) Listen to the public

2) Change policies and procedures

3) Inform people you’re responsive to their needs

USING PUBLIC RELATIONS in PROMOTIONLG4

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Publicity: The Talking Arm of PR

• Publicity -- Any information about an individual, product or organization that’s distributed to the public through the media and is not paid for or controlled by the seller.

• Advantages of Publicity:

- Free

- Reaches people who would not look at an advertisement

- More believable than advertising

PUBLICITYLG4

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• No control over whether the media will use a story or when they may release it.

• It can be good or bad.

• Once a story has been run, it isn’t likely to run again.

DISADVANTAGES of PUBLICITYLG4

Publicity: The Talking Arm of PR

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• Sales Promotion -- The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities.

SALES PROMOTIONSSales Promotion: Giving Buyers Incentives

• Categories of Sales Promotions:

1. B2B Sales Promotions

2. Consumer Sales Promotions

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• Coupons

• Demonstrations

• Sampling

• Sweepstakes

• In-store Displays

• Contests

SOME KEY CONSUMER PROMOTIONSLG5

Sales Promotion: Giving Buyers Incentives

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• Coupons, Inc

• EverSave

• RetailMeNot

• CouponCabin

CLIP THESEMost Visited U.S. Coupon Clearing SitesLG5

Sales Promotion: Giving Buyers Incentives

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Progress Assessment

• What are the three steps in setting up a public relations program?

• What are the sales promotion techniques used to reach consumers?

• What sales promotion techniques are used to reach businesses?

PROGRESS ASSESSMENT

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Word of Mouth and Other Promotional Tools

• Word-of-Mouth Promotion -- People tell others about products they have purchased.

• Word-of-Mouth is important for products like:

- Restaurants

- Daycare and Eldercare

- Car Repair Shops

- Hair Stylists

- Hotels

USING WORD-of-MOUTH PROMOTIONLG6

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Viral Marketing

• Viral Marketing -- Paying customers to say positive things on the Internet or setting up multiple selling schemes whereby consumers get commissions.

• People who promote through viral marketing often receive SWAG which can include free tickets, shirts, and other merchandise.

EMERGING PROMOTIONAL TOOLSLG6

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Blogging, Podcasting and E-mail Promotions

• Blog -- Short for web log; an online diary that looks like a webpage, but is easier to create and update by posting text, photos, videos, or links.

• Podcasting -- A way to distribute audio and video programs via the Internet.

• Email promotions increase brand awareness among commercial suppliers.

BLOGS, PODCASTS, and E-MAILSLG6

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Mobile Media

• Marketers make use of cell phones to text customers about product offers and other company information.

MOBILE MEDIALG6

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Promotional Strategies

• Push Strategy -- Producers use advertising, personal selling, sales promotion, and other tools to get their products stocked on shelves.

• Pull Strategy -- Directs heavy advertising and sales promotions efforts towards consumers and gets the public to request their products from retailers.

• Pick Economy -- Refers to consumers who pick out their products from online outlets.

PUSH, PULL, AND PICK PROMOTIONAL STRATEGIESLG6

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Progress Assessment

• What’s viral marketing?

• What are blogging and podcasting?

• Describe a push strategy, a pull strategy and the pick economy.

PROGRESS ASSESSMENT

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