Busn 101 Chapter 16

Effective Promotional Techniques

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Goals • Define Promotion• Traditional tools in the Promotion Mix:

▫ Advertising▫ Personal selling▫ Public Relations▫ Sales promotion

• Define Advertising• Advantages and disadvantages of different advertising media• Steps for B2B and B2C selling process• Role of public relations department (including publicity)• Forms of sales promotion (including sampling)• Word of mouth, Viral marketing, Blogging, Podcasting• Guerrilla (not gorilla) marketing

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Promotion

•Define Promotion▫An effort by marketers to inform and remind

people in the target market about products and to persuade them to participate in an exchange

•Promotion Mix▫The combination of promotional tools an

organization uses• IMC (Integrated Marketing Communication)

▫A technique that combines all the promotional tools into one comprehensive, unified promotional strategy

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Traditional Promotional MixTraditional Promotional Mix

Personal Selling

Sales Promotion

Public Relations

Advertising

Product

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Steps In A Steps In A Promotional CampaignPromotional Campaign

1.1. Identify the target marketIdentify the target market

2.2. Define the objectives for each element in Define the objectives for each element in promotion mixpromotion mix

3.3. Determine the promotional budgetDetermine the promotional budget

4.4. Develop a unifying messageDevelop a unifying message

5.5. Implement the planImplement the plan

6.6. Evaluate effectivenessEvaluate effectiveness

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Objectives ofObjectives of Integrated MarketingIntegrated Marketing

• Build Brand EquityBuild Brand Equity

• Provide InformationProvide Information

• Manage Demand & Build SalesManage Demand & Build Sales

• Differentiate ProductsDifferentiate Products

• Influence Perceptions, Attitudes, & Influence Perceptions, Attitudes, & Buyer BehaviorBuyer Behavior

Advertising

•Paid nonpersonal communication through various media by organizations and individuals who are in some way indentified in the advertising message

•Ads:1. Inform us

1. http://www.youtube.com/watch?v=TVKcTiPWtMQ&feature=PlayList&p=9D48FA46A835E6FD&playnext_from=PL&index=5&playnext=2

2. Sometimes they try to trick you1. http://www.youtube.com/watch?v=Br3gdKguU

x03. Provide free TV, Radio, print media, e-mail,

news7

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AdvertisingAdvertising

• Advertising media: Newspaper, Advertising media: Newspaper, television, radio, magazines, television, radio, magazines, outdoor, direct mail, yellow-pages, outdoor, direct mail, yellow-pages, InternetInternet

• The growing use of InfomercialsThe growing use of Infomercials

• Moving to the InternetMoving to the Internet

• Global advertisingGlobal advertising

Internet Ads and Promotion• High in search results (people are searching for

item)• Paid ads at Google• E-mail ads• Banner ads• Pop-up banner ads• Yahoo e-mail, news sites have lots of ads• On-line coupons if you signup at web site:

▫Give you coupons▫Send you e-mails

• Watch TV, but first you must watch ad• YouTube ads• Easy to navigate web site• Videos at web site• Facebook 9

Advertising

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BillionsRank Medium 2008 2009 % Change

1 Direct mail 58.22 52.30 -10.2%2 Broadcast TV 43.74 35.40 -19.1%3 Miscellaneous 34.70 29.70 -14.4%4 Newspapers $34.74 $26.00 -25.2%5 Cable TV 26.97 25.66 -4.9%6 Internet 23.45 24.00 2.3%7 Radio 19.60 16.64 -15.1%8 Yellow pages 15.10 13.10 -13.2%9 Magazines 12.75 10.20 -20.0%

10 Outdoor 7.00 6.00 -14.3%11 Business Publications 3.70 3.00 -18.9%

http://www.businessinsider.com/us-advertising-spending-by-medium-2009-10

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Infomercials GrossingInfomercials Grossing Over 1 BillionOver 1 Billion

0 0.5 1 1.5 2 2.5

Proactiv

Bowflex

Total Gym

Soloflex

George Foreman Grill

Ron Popeil'sRotisserie & BBQ In Billions

Source: Source: Business 2.0, June 2005

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U.S. Online U.S. Online Ad SpendingAd Spending Example: Example:

http://news.yahoo.com/s/nm/20081111/bs_nm/us_gm_shares;_ylt=Ar3fSc.gwgrrVyixsrhkRw7Cw5R4

http://hk.youtube.com/results?search_query=TRUCKS+BULLDOZERS&search_type=&aq=f WWW.GOOGLE.COM

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1998 1999 2000 2001 2002 2003 2004 2005Source: Source: Investors.com; Advertising Age, 2005

Interactive Promotion

•Promotional process that allows marketers to go beyond a monologue, where sellers try to persuade buyers to buy things, to a dialogue in which buyers and sellers work together to create mutually beneficial exchange relationships

•WWW.MREXCEL.COM

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Advantages And Disadvantages Of Different Advertising Media

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Medium Advantages DisadvantagesNewspapers Good coverage of local markets

ads can be placed quicklyhigh consumer acceptancecan be clipped and saved

People now go onlineAds compete with features in paperpoor colorpaper is thrown away

Television Uses sight, sound and motionreaches almost all audienceshigh attention with no competition from other material

High costshort exposure timetakes time to prepare adremote control, TiVo

Radio Low costCab target specific audiencesYou are in a cargood for local marketing

Switch channelOnly soundshort exposure timeCan't keep ad

Magazines Can target specific audiencecolorlong life of adclipped and saved

Ads must be placed weeks before publicationHigh cost

Outdoor High visibilityRepeat exposureLow costlocal market focus

Limited messagelow selectivity of audience

Direct mail Best for targeting specific marketsAd can be savedFlexible

Annoying to receiverWastes paperHigh cost

Yellow pages-type advertising Great for local marketingSomewhat used by consumerscan be saved

High CostPeople use the internet now

Internet InexpensiveGlobal coverageavailable at any timeinteractive

Most people in the world do not have the internet

Selling

•Personal Selling▫The face-to-face presentation and promotion

of goods and services▫Helping others satisfy their wants and needs▫About 10% of labor force does personal

selling

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Selling•Prospecting

▫Researching potential buyers and choosing those most likely to buy

•Qualifying▫In the selling process, making sure that people have a

need for the product, the authority to buy, and the willingness to listen to a sales message

•Prospect▫A person with the means to buy a product, the authority

to buy, and the willingness to listen to a sales message•Trial Close

▫A step in the selling process that consists of a question or statement that moves the selling process toward actual close

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Steps in the SellingSteps in the Selling Process Process (B2B)(B2B)1.1. Prospect and Qualify (wants it & can buy)Prospect and Qualify (wants it & can buy)

2.2. Preapproach (know customer)Preapproach (know customer)

3.3. Approach (first impressions are important)Approach (first impressions are important)

4.4. Make Presentation (match benefits of Make Presentation (match benefits of product to needs of customer)product to needs of customer)

5.5. Answer Objections (truth builds trust)Answer Objections (truth builds trust)

6.6. Close SaleClose Sale

7.7. Follow Up (key part to building Follow Up (key part to building relationships)relationships)

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Steps in the Steps in the Selling Process (B2C)Selling Process (B2C)

Start

Approach

Ask questions

Make presentation

Close sale

Follow up

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Public RelationsPublic Relations

StepsSteps• Listen to the public.Listen to the public.

• Change policies and Change policies and procedures.procedures.

• Inform people that Inform people that you’re being you’re being responsive to their responsive to their needs.needs.

PublicityPublicity• FreeFree

• More Effective Than More Effective Than AdvertisingAdvertising

• BelievableBelievable

• No ControlNo Control

• No RepetitionNo Repetition

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Sales Promotion TechniquesSales Promotion Techniques

B2BB2B• Trade ShowsTrade Shows• PortfoliosPortfolios• DealsDeals• CatalogsCatalogs• ConventionsConventions

B2CB2C• CouponsCoupons• Cents-off PromotionsCents-off Promotions• SamplingSampling• PremiumsPremiums• SweepstakesSweepstakes• ContestsContests• BonusesBonuses• CatalogsCatalogs• DemonstrationsDemonstrations• Special EventsSpecial Events• LotteriesLotteries• In-store DisplaysIn-store Displays

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Coupon StatisticsCoupon StatisticsAverage Face ValueAverage Face Value

• 93 cents (2004); 46 cents (1990)93 cents (2004); 46 cents (1990)

Amount saved in 2004Amount saved in 2004• $2.9 billion$2.9 billion

Number of coupons redeemed in America Number of coupons redeemed in America in 2004in 2004• 3 billion3 billion

Coupons rank 2Coupons rank 2ndnd as purchase motivators as purchase motivators (Largest: Free Samples)(Largest: Free Samples)

Source: St. Louis Post-Dispatch Everyday, July 2005

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Sales PromotionSales Promotion

• Internal & ExternalInternal & External

• SamplingSampling

• Word-Of-MouthWord-Of-Mouth

• Viral MarketingViral Marketing

• BloggingBlogging

• PodcastingPodcasting

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Putting it all TogetherPutting it all Together

• Convince wholesalers and Convince wholesalers and retailers to stock and sellretailers to stock and sell

• Producer uses advertising, Producer uses advertising, personal selling, sales personal selling, sales promotion to convince the promotion to convince the intermediariesintermediaries

• Idea is to push the product Idea is to push the product through the distribution through the distribution system to the storessystem to the stores

• Heavy advertisements and Heavy advertisements and sales promotion effortssales promotion efforts

• Directed at consumers so Directed at consumers so that they will request the that they will request the products from retailersproducts from retailers

• Products are pulled down Products are pulled down through the distribution through the distribution systemsystem

Publicity

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

•“Talking part of sales promotion”•Greatest advantage is its believability

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Sales Promotion

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

•Internal:▫Keep employees enthusiastic and train well

•External▫Coupons▫Sampling▫Contests

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Sampling

•A promotional tool in which a company lets consumers have a small sample of a product for no charge

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Word-of-mouth promotion

•A promotional tool that involves people telling other people about products they have purchased

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Guerrilla (Not Gorilla) Marketing

•Studying market for your product very carefully, then going after that market using nontraditional (even outrageous) promotional means▫Red Bull:

Extreme Sports events College parties Contests and award ceremonies

▫Obama: YouTube videos E-mailed videos

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Viral Marketing

•The term now used to describe everything from paying people to say positive things on the internet to setting up multilevel selling schemes whereby consumers get commissions for directing friends to specific web sites

•Does your viral video get 5 million hits at YouTube?

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Blogging

•Blog▫On online diary (web log) that looks like a web

page but is easier to create and update by posting text, photos, or links to other sites

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Podcasting

•A means of distributing audio and video programs via the internet that lets users subscribe to a number of files, also known as feeds, and then hear or view the material at the time they choose

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Push Strategy

•Promotional strategy in which the producer uses advertising, personal selling, sales promotion, and all other promotional tools to convince wholesalers and retailers to stock and sell merchandise

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Pull Strategy

•Promotional strategy in which heavy advertising and sales promotion efforts are directed toward consumers so that they will request the products from the retailers

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