CHAPTER 1A

PROMOTION MIX

5M’S OF ADVERTISING

(major decisions)

Marketing Communication Mix or Promotion Mix

Product’s Design

Product’s Price

Product’s

Package

Stores that Sell the Product

Advertising Advertising

Personal Selling

Personal Selling

SalesPromotion

SalesPromotion

PublicRelations

PublicRelations

DirectMarketing

DirectMarketing

Reaches Many Buyers, Repeats Message Many Times, Impersonal, Expensive

Reaches Many Buyers, Repeats Message Many Times, Impersonal, Expensive

Personal Interaction, Relationship Building, Most

Expensive Promo Tool

Personal Interaction, Relationship Building, Most

Expensive Promo ToolWide Assortment of Tools, Rewards Quick Response,

Efforts Short-Lived

Wide Assortment of Tools, Rewards Quick Response,

Efforts Short-LivedVery Believable, Dramatize a

Company or Product, Underutilized

Very Believable, Dramatize a Company or Product,

Underutilized

Nonpublic, Immediate, Customized, InteractiveNonpublic, Immediate, Customized, Interactive

Setting the Overall Communication Mix

Push versus Pull Promotion Strategy

What is Sales Promotion?

Sales Promotion Offers Short-Term Incentives to Encourage Purchase or Sales of a Product

or Service.Offers Reasons to Buy NOW.

Rapid Growth of Sales Promotion

• Sales promotion can take the form of consumer promotions, business promotions, trade promotions, or sales force promotions.

• Rapid growth in the industry has been achieved because:– Product managers are facing more pressure to

increase their current sales,– Companies face more competition,– Advertising efficiency has declined,– Consumers have become more deal oriented.

Sales Promotion Objectives

• Consumer Promotions: increase short-term sales or help build long-term market share.

• Trade Promotions: get retailers to:– carry new items and more inventory,– advertise products, – give products more shelf space, and– buy product ahead.

• Sales Force: getting more sales support.• In general, sales promotion should focus on

consumer relationship building.

SampleSample

CouponsCoupons

Cash RefundsCash Refunds

Price PacksPrice Packs

PremiumsPremiums

Advertising Specialties

Advertising Specialties

Trial amount of a productTrial amount of a product

Savings when purchasing specified products

Savings when purchasing specified products

Refund of part of the purchase price

Refund of part of the purchase price

Reduced prices marked on the label or package

Reduced prices marked on the label or package

Goods offered free or low cost as an incentive to buy a

product

Goods offered free or low cost as an incentive to buy a

productArticles imprinted with an advertiser’s name given as

gifts

Articles imprinted with an advertiser’s name given as

gifts

Major Consumer Sales Promotion Tools

Patronage RewardsPatronage Rewards

Point-of-Purchase Point-of-Purchase

ContestContest

SweepstakesSweepstakes

GamesGames

Cash or Other Award Offered for Regular Use of a Product

Cash or Other Award Offered for Regular Use of a Product

Displays or Demonstrations at the Point of Purchase

Displays or Demonstrations at the Point of Purchase

Consumers Submit an Entry to be Judged

Consumers Submit an Entry to be Judged

Consumers Submit Their Names for a Drawing

Consumers Submit Their Names for a Drawing

Consumers Receive Something Each Time They Buy Which May

Help Them Win a Prize

Consumers Receive Something Each Time They Buy Which May

Help Them Win a Prize

Major Consumer Sales Promotion Tools

Trade-Promotion Objectives

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

Major Trade Sales Promotion Tools

Trade-Promotion Tools

DiscountsDiscounts

AllowancesAllowances

Free GoodsFree Goods

Push MoneyPush Money

Specialty Ad ItemsSpecialty Ad Items

Business-Promotion Objectives

Generate Business LeadsGenerate Business Leads

Stimulate PurchasesStimulate Purchases

Reward CustomersReward Customers

Motivate SalespeopleMotivate Salespeople

Business-Promotion Tools

ConventionsConventions

Trade ShowsTrade Shows

Sales ContestsSales Contests

Major Business Sales Promotion Tools

Decide on the Size of the IncentiveDecide on the Size of the Incentive

Set Conditions for ParticipationSet Conditions for Participation

Evaluate the ProgramEvaluate the Program

Determine How to Promote andDistribute the Promotion Program Determine How to Promote and

Distribute the Promotion Program

Determine the Length of the ProgramDetermine the Length of the Program

Developing the Sales Promotion Program

What is Public Relations?

Public Relations Involves Building Good Relations With the

Company’s Various Publics by Obtaining Favorable Publicity, Building Up a Good Corporate

Image, and Handling or Heading Off Unfavorable Rumors, Stories,

and Events.

Press Relations or AgentryPress Relations or Agentry

Product PublicityProduct Publicity

Public AffairsPublic Affairs

LobbyingLobbying

Investor RelationsInvestor Relations

DevelopmentDevelopment

Public Relations Departments May Perform Any or All

of the Following Functions:

Major Public Relations Functions

News

Speeches

Special Events

Written MaterialsAudiovisual

Materials

Corporate Identity

Materials

Public Service

Activities

Web Site

Major Public Relations Tools

Advertising

• Advertising is centuries old.• U.S. advertisers spend in excess of $244

billion each year; worldwide spending exceeds $465 billion.

• Advertising is used by:– Business firms,– Nonprofit organizations,– Professionals, and– Social agencies.

Major Decisions in Advertising

Informative AdvertisingInform Consumers or Build Primary Demand

i.e DVD Players

Comparative AdvertisingCompares One Brand

to Anotheri.e. Avis vs. Hertz

Persuasive AdvertisingBuild Selective Demandi.e Sony DVD Players

Reminder AdvertisingKeeps Consumers

Thinking About a Producti.e. Coca-Cola

Advertising ObjectiveSpecific Communication Task Accomplished with a Specific

Target Audience During a Specific Period of Time

Setting Advertising Objectives

Affordable Based on What the Company Can Afford

Objective-and-Task Based on Determining

Objectives & Tasks, Then Estimating Costs

Objective-and-Task Based on Determining

Objectives & Tasks, Then Estimating Costs

Percentage-of-SalesBased on a Certain

Percentage of Current or Forecasted Sales

Percentage-of-SalesBased on a Certain

Percentage of Current or Forecasted Sales

Competitive-ParityBased on the Competitors’

Promotion Budget

Competitive-ParityBased on the Competitors’

Promotion Budget

Methods of Setting the Advertising Budget for Each Product and Market.

Setting the Advertising Budget

Selecting the Advertising Media

Advertising Strategy Consists of Two Major Elements and Companies are Realizing the

Benefits of Planning These Two Elements Jointly.

Developing Advertising Strategy

Creating the Advertising

Messages

Creating the Advertising Message:Message Strategy

Advertising AppealsMeaningful, Believable

& Distinctive

Develop a Message Focus on

Customer Benefits

Creative Concept“Big Idea”

Visualization or Phrase

TypicalMessage

ExecutionStyles

Testimonial EvidenceTestimonial Evidence Slice of LifeSlice of Life

Scientific EvidenceScientific Evidence LifestyleLifestyle

Technical ExpertiseTechnical Expertise FantasyFantasy

MusicalMusical

Personality SymbolPersonality Symbol Mood or ImageMood or Image

Developing Advertising Strategy: Message Execution

Advertising Strategy:Selecting Advertising Media

• Deciding on reach, frequency, and impact.• Choosing among the major media types.

– Media habits of target customers,– Nature of the product,– Types and costs of messages.

• Selecting specific media vehicles.– Specific media within each general media type.

• Deciding on media timing.– Scheduling advertising over the course of a year.

Communication Effects(Copy Testing)

Is the Ad Communicating Well?

Communication Effects(Copy Testing)

Is the Ad Communicating Well?

Advertising Program Evaluation

Sales Effects

Is the Ad Increasing Sales?

Sales Effects

Is the Ad Increasing Sales?

Evaluating Advertising

Sales Departments inSmall Companies

Advertising Departments in Larger Companies

Advertising Agency

Firm that Assists Companiesin the Planning, Creation, &

Implementation of TheirAdvertising Programs

Other Advertising Considerations

Advertising Management: Key Questions

• What is my target audience

• How do they make decisions?

• What should be my brand positioning?

• How do I build brand equity?

• What motivates behaviour?

• How do I best communicate?

• have an opportunity to see or hear the message

• pay attention to the message

•understand what is presented

• act upon the message in the

desired manner

How does advertising work?

Someone must:

The Mandate for effectiveness

• Today advertising is in a bind– A down economy– Tragedy of 9/11– New technologies that threaten how

advertising works• Advertisers expect specific results that

lead to sales• Advertising must be effective

What Makes an Ad Effective?

• Effective ads work on two levels: with consumers and with advertisers.

– Consumers • View ads for entertainment or out of curiosity• May then learn the ad relates to a need• May receive an incentive to risk change• May find reinforcement for product decisions

– Advertisers• Ads must gain consumers’ attention• Ads must hold attention long enough to change

consumer purchasing behavior

What Makes an Ad Effective?

Strategy

• Advertisers develop ads to– Meet specific objectives– Target a certain audience– Speak to that audience’s most important concerns– Appear in media that will reach the audience most

effectively

Creativity

• The creative concept is the ad’s central idea– Grabs your attention– Sticks in your memory

• Creativity drives the entire advertising field– Planning strategy– Conducting research– Buying and placing ads

Lancer

Execution

• Effective ads are well-executed

– Details, photos, printing, production values have been finely tuned

– How you say it is as important as what you say

Ads Must Be Goal - Directed

• The intended effects of advertising are important for evaluating effectiveness

• These goals include– Perception

• Will the ad be attended to and remembered?

– Learning• Will the audience understand the message and make correct associations?

Ads Must Be Goal -Directed

• These goals include (cont.)– Persuasion

• Does the ad change attitudes and touch emotions?

– Behavior• Will the audience try the product?

A Model of Key Effects

• Integrated marketing communications (IMC)– Unifying all marketing communications tools to send a

consistent persuasive message

• Consumer Power– Technology has given consumers greater leverage

Current Advertising Issues

Current Advertising Issues

• Interactive advertising– Will technology change the

face of advertising?– Is the promise of technology

exaggerated?– Implications of the failure

of banner ads

• Globalization– Trade barriers have fallen in Europe– Formerly communist nations have partially opened

markets– Should advertisers practice global or local advertising?

• Niche marketing– Advertisers target market segments– New technologies make targeting groups possible

Current Advertising Issues

2 Factors

are Changing the Face of Today’s

Marketing Communications:

Improvement in Information Technology

Has Led to Segmented MarketingMore Narrowcasting

Marketers Have ShiftedAway From Mass

MarketingLess Broadcasting

Mark

et

Fragm

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The Changing Communications Environment

The Five Ms of Advertising