Chapter 13

Promotion

communication information b/w the seller and potential buyer or others in the channel to influence attitudes and behavior.

Personal selling

involves direct spoken communication b/w sellers and potential customers.

Mass selling

communication with large numbers of potential customers at the same time.

Advertising

the main form of mass selling; any paid form of non-personal presentation of ideas, goods, or services by an identified sponsor.

Problem

media don’t always say or show what the firm intends

EX

radio, TV, signs, direct mail, & internet

Publicity

any unpaid form of non-personal presentation of ideas, goods, or services.

Most common method of budgeting 4 promotion expenditures is 2 compute a percentage of either past sales or sales expected in the future (mechanical approach)

Simple but leads 2 expanding expenditures when business is good, & cutting back when business is poor- could make problem worse!

Sales Promotion

promotion activities- other than personal selling, advertising, & publicity- that stimulated interest, trial, or purchase by final consumers or others in the channel.

Sales managers-

concerned w/ managing personal selling.

Advertising manager-

manage their company?s mass-selling effort- in tv, newspapers, magazines, & other media.

Sales Promotion Managers-

manage their company?s sales promotion effort.

Integrated marketing communications-

the intentional coordination of every communication from a firm to a target customer to convey a consistent and compete message.

AIDA Model

action-oriented model consisting of 4 promotion jobs

Communication Process-

a source trying to reach a receiver with a message.

Source-

the sender of a message- tries to deliver a message to the receiver- a potential customer.

Encoding

source deciding what to say and translating it into words or symbols that will have the same meaning to the receiver.

Decoding

receiver translating the message.

MOST COMMON

promotion related to exaggerated claims

Direct-Response Promotion

type of direct marketing comm.

Customer (receiver)

initiates the communication process w/ a decision 2 search for info in a particular message channel .

Pushing (

a product through a channel ) means using normal promotion effort- to help sell the whole marketing mix to possible channel members.

Pulling

means getting customers to ask middlemen for the product

Promotion Communications To Target Markets

Promotion communication information b/w the seller and potential buyer or others in the channel to influence attitudes and behavior.

Adoption curve

shows when different groups accept ideas.

Several Promotion Methods are Available

Personal selling involves direct spoken communication b/w sellers and potential customers.
Mass selling communication with large numbers of potential customers at the same time.

Personal selling involves direct spoken communication b/w sellers and potential customers.

Salespeople get direct feedback
Very expensive

Someone Must Plan, Integrate, and Manage the Promotion Blend

Sales managers- concerned w/ managing personal selling.
Advertising manager- manage their company?s mass-selling effort- in tv, newspapers,...
Sales Promotion Managers- manage their company?s sales promotion effort.
Determining the blend of promotion efforts is a strategy decision & is the responsibility...
Integrated marketing communications- the intentional coordination of every communication...

Mass selling communication with large numbers of potential customers at the same time.

Less flexible than personal selling, but is less expensive with target audience is large...
Advertising the main form of mass selling; any paid form of non-personal presentation of...
Publicity any unpaid form of non-personal presentation of ideas, goods, or services.
Sales Promotion promotion activities- other than personal selling, advertising, &...
Less money is spent on advertising than sales promotions or personal selling

Advertising the main form of mass selling; any paid form of non-personal presentation of ideas, goods, or services by an identified sponsor.

EX radio, TV, signs, direct mail, & internet

Publicity any unpaid form of non-personal presentation of ideas, goods, or services.

Publicity people trying to attract attention 2 the firm & its offerings w/out having to pay media costs.
If a firm has a really new message, publicity may be > effective than advertising (articles in trade mag?s)
Problem media don?t always say or show what the firm intends.

Publicity people trying to attract attention 2 the firm & its offerings w/out having to pay media costs.

EX: press releases

Sales Promotion promotion activities- other than personal selling, advertising, & publicity- that stimulated interest, trial, or purchase by final consumers or others in the channel.

Can usually be implemented quickly & get results sooner.

Sales managers- concerned w/ managing personal selling.

Often responsible for building good distribution channels and implementing Place policies.

Which Methods To Use Depends on Promotion Objectives

Promotion tries to encourage customers to buy a specific product. Promotion must
Promotion objectives must be clearly defined
Informing
Persuading
Reminding
3 Basic Objectives of Promotion objectives relate to the adoption process
AIDA Model action-oriented model consisting of 4 promotion jobs

Advertising manager- manage their company?s mass-selling effort- in tv, newspapers, magazines, & other media.

Their job is choosing the right media and developing the ads.
Also may handle public relations ( communication w/ noncustomers, including labor, public interest groups, stockholders, and the gov?t).

the innovators,

they have fewer contacts outside their own social group or community.

Sales Promotion Managers- manage their company?s sales promotion effort.

Activities vary

Also may handle public relations ( communication w/ noncustomers, including labor, public interest groups, stockholders, and the gov?t).

May be done by an outside firm.

Determining the blend of promotion efforts is a strategy decision & is the responsibility of the marketing manager .

After promotional blend is created, various dept?s decide on details

Integrated marketing communications- the intentional coordination of every communication from a firm to a target customer to convey a consistent and compete message.

> difficult then it sounds In order to get this 2 occur , all involved need 2 understand the overall marketing strategy & how each specific promotional method will contribute 2 the promotional blend

Promotion tries to encourage customers to buy a specific product. Promotion must

Reinforce present attitudes or relationships that might lead to favorable behavior
Actually change the attitudes and behavior of the firms target market.

Promotion Requires Effective Communication

Promotion can be easily wasted. Many ways it can be misunderstood or not heard @ all

Promotion objectives must be clearly defined

Three Basic Promotion Objectives
Also useful 2 set > specific objectives that state exactly who you want to inform, persuade, or remind, and why.

Three Basic Promotion Objectives

Informing , Persuading , & Reminding target customers about the company & its marketing mix.

Informing

Customers need to know something about a product if they are going to buy it @ all have to educate your potential customers

esp if the product is new

Persuading

Usually becomes necessary to not only inform, but also to persuade bc of competition
Persuading objective- the firm will try to develop a favorable set of attitudes so customers will buy, and keep buying, the product.

Reminding

If customers already have a positive view about a firms marketing mix- have to remind them (if uve been attracted once, doesn?t mean u arent a target of a competitors marketing mix appeals)

Persuading objective- the firm will try to develop a favorable set of attitudes so customers will buy, and keep buying, the product.

Tries to demonstrate why ur brand is better than the others

3 Basic Objectives of Promotion objectives relate to the adoption process

Informing awareness and interest
Persuading Evaluation & Trial
Reminding Decision & Confirmation

AIDA Model action-oriented model consisting of 4 promotion jobs

To get attention
To hold Interest
To arouse Desire
To Obtain Action (as a memory aid)

To Obtain Action (as a memory aid)

Informing Attention & Interest
Persuading Desire
Reminding Action

Promotion can be easily wasted. Many ways it can be misunderstood or not heard @ all

Communication Process- a source trying to reach a receiver with a message.
Elements of a Communication Process
Many Ethical issues arise in Marketing Communications

Integrated Direct-Response Promotion is Very Targeted

Challenges of developing promotions that relate to specific target markets have prompted...
@ the heart of direct promotion is achieving a measureable, direct response from specific...
Direct-response promotion usually relies on a Customer Relationship management (CRM)...
CRM also relates to Business Customers effective e-mail programs give customers targeted...
Direct-response promotion & CRM database targeting have become an important part of many...

Elements of a Communication Process

Source- the sender of a message- tries to deliver a message to the receiver- a potential customer.
Customers evaluation the message & the source of the message in terms of trustworthiness & creditability.
The basic difficult in the comm. process occurs during
Communication process is further complicated bc the message is delivered through some message channel- the carrier of the message.

Many Ethical issues arise in Marketing Communications

Criticism focuses on whether promotion is honest & fair.
Also issues raised about the use of celebrities in ad?s.
MOST COMMON promotion related to exaggerated claims .

Customers evaluation the message & the source of the message in terms of trustworthiness & creditability.

A major advantage of personal selling is that the source (the seller) can get immediate feedback from the receiver & change it if necessary. Mass Selling on the other hand has 2 rely on marketing research or total sales figures 4 feedback.

The basic difficult in the comm. process occurs during

Encoding source deciding what to say and translating it into words or symbols that will have the same meaning to the receiver.
Decoding receiver translating the message.
Different audiences interpret a message differently people need a common frame of reference to communicate property.

Communication process is further complicated bc the message is delivered through some message channel- the carrier of the message.

Particular message channels can enhance or distract from the message.

MOST COMMON promotion related to exaggerated claims .

Does ?best available? a personal opinion, or does it have 2b backed by proof when used in advertisements

What type of proof needs 2b required

Laggards

or non-adopters

Challenges of developing promotions that relate to specific target markets have prompted many firms 2 move toward direct marketing (direct communication b/w a seller & and an individual customer other than face-2-face personal selling.)

Direct-Response Promotion type of direct marketing comm. designed 2 prompt immediate feedback from customers.

The Customer May Initiate the Communication Process

Traditional view about promotion & the communication process itself is based on the idea that its the seller (?source?) who initiates the communication &...
Customer-Initiated Interactive Communication Model
Seeing marketers customize communication (amazon- recommends books)

@ the heart of direct promotion is achieving a measureable, direct response from specific target customers now can be done through mail, e-mail, a website, broadcast, & even interactive video.

Can be a purchase, question, or request 4 > info.

Direct-response promotion usually relies on a Customer Relationship management (CRM) Database to target specific prospects.

Includes customers? names their home & e-mail addresses- as well as past purchases, etc.
Marketing managers like 2b in regular contact w/ customers to stimulate interest.

Traditional view about promotion & the communication process itself is based on the idea that its the seller (?source?) who initiates the communication & the buyer is a passive receiver until the marketer doesn?t something 2 stimulate interest. However, this is changing. Buyers now access a great deal of info & place orders w/out the seller having been directly involved, @ all.

Done through technology (internet. Email list servers, caller-controlled fax-on-demand, video kiosks in malls,etc)

How Typical Promotion Plans Are Blended and Integrated

When a channel of distribution involves...
Pushing ( a product through a channel ) means...
Sales people handle most of the important...
Some firms emphasize promotion to their own...
Pulling means getting customers to ask middlemen...
Pulling & Pushing are usually used in combination.
The large # of consumers almost forces producers...
producers/wholesalers that target business...
Although its useful to know what type of...

Customer-Initiated Interactive Communication Model

Customer (receiver) initiates the communication process w/ a decision 2 search for info in a particular message channel .
Next step is the customer selects a particular topic
Once topic is selected, the message 4 the topic is displayed typically brief & may give u ways 2 find > info.
Noise may be a problem

Customer (receiver) initiates the communication process w/ a decision 2 search for info in a particular message channel .

Internet is the most far-reaching message channel

Next step is the customer selects a particular topic

done through clicking a mouse, highlighting a selection from an initial list, enter something in a search box in a search engine..

Adoption Processes can Guide Promotion Planning

Looking @ markets as a whole; how diff segments of customers w/in a market may behave diff
Adoption curve shows when different groups accept ideas.
Innovators
Early Adopters
Opinion leaders can help spread the Word
Early Majority
Late Majority
Laggards or non-adopters

Pushing ( a product through a channel ) means using normal promotion effort- to help sell the whole marketing mix to possible channel members.

Emphasized the importance of securing the cooperation of channel members 2 promote the product in the channel & to the final user.

Sales people handle most of the important communication w/ middlemen.

Can answer questions about what promotion will be directed toward the final consumer, each channel members assistance, and allowances. Can also help the firm determine when it should adjust its marketing mix form 1 middleman 2 another.

Some firms emphasize promotion to their own employees.

Internal marketing effort is basically a variation on the pushing approach.

Some used promotion 2 motivate employees to provide better customer service or achieve higher sales.

Pulling means getting customers to ask middlemen for the product

Most producers focus a signif amount of promotion on the customers @ the end of the channel- helps stimulate demand & pull a product through the channel of distribution.

Pulling & Pushing are usually used in combination.

Who handles promotion 2 final consumers @ the end of a channel depends on the mix of pushing & pulling & if customer is business or final.

The large # of consumers almost forces producers of consumer products and retailers 2 emphasize advertising & sales promotion (builds consumer interest & short-term sales)

If mass-selling is effective, it can build brand familiarity & eliminate the need for personal selling (expensive- usually found in expensive chains only).

producers/wholesalers that target business customers usually emphasize personal selling bc there tends 2b fewer customers who make larger purchases.

Mass-selling is necessary too bc sales-people spend < � their time actually selling

Promotion Blends Vary Over the Life Cycle

The adoption curve helps explain why a new product goes through the product life-cycle...
During market introduction, the basic promotion objective is informing. Must build primary...
In the Market Maturity Stage , mass selling & sales promotion may dominate the promotion...
Firms that have differentiated their marketing mixes may favor mass selling bc they have...
In the Sales Decline Stage, $ spent on promotion decreases as firms try 2 cut costs 2 remain...

Adoption curve shows when different groups accept ideas.

Emphasizes the relations among groups and shows that individuals in some groups act as leaders in accepting a new idea.
Promotion efforts usually need to change over time to adjust to differences among the adopter groups.

Innovators

the first 2 adopt
eager to try a new idea and willing to take risks
tend to be young and educated
likely to be mobile & have many contacts outside their local social group & community
business customers in the innovator group are often specialized & wiling 2 take the risk of doing something new
tend to rely on impersonal & scientific info sources, or on other innovators, rather than salespeople.

Early Adopters

Well respected by their peers and often are opinion leaders .
Tend to be younger, more mobile, and more creative than the...
Unlike the innovators, they have fewer contacts outside their own...
Business firms in this category tend 2b specialized.
Of all the groups, early adopters have the greatest contact w/...
Mass media are important info sources
Marketers should be very concerned about attracting/selling 2 this...

tend to rely on impersonal & scientific info sources, or on other innovators, rather than salespeople.

5% of adoption

Opinion leaders can help spread the Word

Marketers understand the importance of personal recommendations by opinion leaders. Word-of-mouth publicity if positive can lead 2 fast growth. However, many times its negative.
Another way to get customers to talk/buy ur product is through samples/free giveaways/publicity stunts- this doesn?t necessarily lead to increases in sales and cannot be substituted for complete marketing mixes.

Marketers should be very concerned about attracting/selling 2 this group- acceptance is crucial.

15% adoption

Early Majority

Avoids risk & waits to consider a new idea after many early adopters have tried it- and liked it.
Looks to the early adopters for guidance; can help the promotion effort by spreading word-of-mouth information &...
Average-sized business firms that are < specialized often fit in this category if successful companies in their...
Has a great deal of contact w/ mass media, salespeople, and early adopter opinion leaders, but members are usually...

Late Majority

Group is cautious about new ideas? members of this group tend 2b older & > set in their ways, so they are less likely to follow early adopters.
Business firms in this group tend 2b conservative, smaller-sized firms w/ little specialization.
Makes little use of marketing sources of info (mass media & salespeople)

Laggards or non-adopters

prefer to do things the way they ?ve been done in the past & are very suspicious of new ideas.
Tend to be older & less well educated.
The smallest businesses w/ the least specialization often fit this category; they cling 2 the status quo & think it?s the safe way.
Main source of info is other laggards.

Setting the Promotion Budget

There are some economies-of-scale in promotion (a ad on nat?l TV costs less per person then an ad on local tv. However...
Most common method of budgeting 4 promotion expenditures is 2 compute a percentage of either past sales or sales...
Most sensible approach 2 budgeting promotion expenditures is the task method basing the budget on the job to be done.
Another practical approach is to determine which promotion objectives are most important & which promotion methods...

During market introduction, the basic promotion objective is informing. Must build primary demand

demand 4 the general product idea- not just demand for the company?s own brand.
In the market growth stage , promotion emphasis shifts to stimulating selective demand- demand for a companies own brand.
Main job is 2 persuade customers 2 buy, & keep buying, that comp?s product
Now that there are more potential customers, mass selling becomes > economical. BUT, salespeople & personal...

demand 4 the general product idea- not just demand for the company?s own brand.

There may be few potential innovators during the intro stage, and personal selling can help find them.
Firms also need salespeople to find good channel members & persuade them to carry the new product.
Sales promotion may be targeted @ salespeople or channel members 2 get them interested in selling the new product
Sales promotion may also encourage customers 2 try it

In the Market Maturity Stage , mass selling & sales promotion may dominate the promotion blends of consumer product firms ; Business products may require > aggressive personal selling (perhaps supplemented by > advertising).

The total dollars allocated to promotion may rise as competition rises.

Firms that have differentiated their marketing mixes may favor mass selling bc they have something to talk about.

If ur a firm w/ a strong brand , may use reminder-type advertising or target frequent-buyer promotions @ current customers 2 strengthen the relationship/keep customers loyal ( > effective then trying 2 win cust.?s in this stage)
If the market drifts towards pure competition, some companies resort to price-cutting may temporarily increase the # of units sold, but is likely 2 reduce total revenue & money available 4 promotion.

In the Sales Decline Stage, $ spent on promotion decreases as firms try 2 cut costs 2 remain profitable.

Firms need > targeted promotion 2 reach people still interested

Most sensible approach 2 budgeting promotion expenditures is the task method basing the budget on the job to be done.

This method helps the marketing manager set priorities so that the money spent produces specific results.

Another practical approach is to determine which promotion objectives are most important & which promotion methods are most economical & effective 4 the communication tasks relevant 2 each objective. The costs of these tasks r then totaled- to determine how much should be budgeted for promotion.

Promotion budget determined by actual plans, not relying on historical patterns or ratios.
Helps eliminate budget flights b/w managers responsible 4 diff promotion methods.

Chapter 13

Marketing 300 with Brachman at University of Wisconsin - Madison

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