Promotions Promotions Dr. Mary Wolfinbarger Marketing 300

PromotionsPromotions

Dr. Mary Dr. Mary WolfinbargerWolfinbarger

Marketing 300Marketing 300

PromotionPromotion

Marketing activities used to Marketing activities used to communicate positive, persuasive communicate positive, persuasive info about an organization, its info about an organization, its products and its activities to a target products and its activities to a target audienceaudience

Purpose: to directly or indirectly Purpose: to directly or indirectly create sales, influence consumers.create sales, influence consumers.

To whom does promotion To whom does promotion communicate?communicate?

Consumers/potential consumersConsumers/potential consumers Interest groups/regulatory agenciesInterest groups/regulatory agencies Current/potential investorsCurrent/potential investors Society in generalSociety in general Company employeesCompany employees

Integrated Marketing Integrated Marketing CommunicationsCommunications

A planning concept recognizing the A planning concept recognizing the added value in integrating promo added value in integrating promo mix elements mix elements

Purpose: to provide clarity, Purpose: to provide clarity, consistency and maximum consistency and maximum communications impact.communications impact.– Explosion of communication choices Explosion of communication choices

made this more necessarymade this more necessary– Technology made it more possibleTechnology made it more possible

Promotion MixPromotion Mix

AdvertisingAdvertising Personal SellingPersonal Selling Sales PromotionSales Promotion Public RelationsPublic Relations

AdvertisingAdvertising

A A paidpaid form of form of non-personanon-personal l communication about an communication about an organization and/or its products to a organization and/or its products to a target audience through a target audience through a mass mass mediummedium..

MediaMedia

TVTV NewspapersNewspapers RadioRadio MagazinesMagazines InternetInternet BillboardsBillboards Etc….Etc….

AdvantagesAdvantages

Can reach large mass audiences/ Can reach large mass audiences/ small nichessmall niches

Usually cost efficient per person Usually cost efficient per person reached reached

Repetition of messagesRepetition of messages

DisadvantagesDisadvantages

Absolute dollar outlay may be highAbsolute dollar outlay may be high Response to ads (except retail ads) Response to ads (except retail ads)

are sloware slow Advertising less persuasive than Advertising less persuasive than

personal sellingpersonal selling

Direct MarketingDirect Marketing

Often included in advertisingOften included in advertising Advantage: communicate directly Advantage: communicate directly

with prospectswith prospects Can tailor messages for prospectsCan tailor messages for prospects Messages can be longer/more Messages can be longer/more

complexcomplex Can target best prospectsCan target best prospects


Biggest Disadvantage:Biggest Disadvantage:

Cost per person reached expensive Cost per person reached expensive (except for Internet email!)(except for Internet email!)


Generate inquiries about prod.Generate inquiries about prod. Generate purchaseGenerate purchase Gain trialGain trial Increase usageIncrease usage Enhance prod image w/ well-defined Enhance prod image w/ well-defined

target audiencetarget audience


Gather informationGather information Build ongoing relationships with Build ongoing relationships with

customerscustomers

The Internet as An Advertising/ The Internet as An Advertising/ Direct Selling MediumDirect Selling Medium

Point of sale ability (look Point of sale ability (look andand buy) buy) Potential for “mass customization” of Potential for “mass customization” of

ad messagesad messages Advertising messages can be Advertising messages can be

interactive and/or updated interactive and/or updated continuouslycontinuously

Advantages of Internet as Advantages of Internet as Selling MediumSelling Medium

Primary form of online advertising Primary form of online advertising (as of 2005): search (Google, Yahoo!, (as of 2005): search (Google, Yahoo!, MSN)MSN)– Easy to measure effectiveness of search Easy to measure effectiveness of search

advertisingadvertising Banner Ads are now called Display Banner Ads are now called Display

AdsAds The use of “rich media” in ads is The use of “rich media” in ads is

increasingincreasing

Advantages of Internet as Advantages of Internet as Selling MediumSelling Medium

Other forms: Other forms: – sponsorship sponsorship – ads in podcasts ads in podcasts – ads embedded in online games (Massive ads embedded in online games (Massive

Inc.) Inc.) – viral games and videos viral games and videos – YouTube (sponsored and unsponsored) YouTube (sponsored and unsponsored) – Ad portals? Ad portals? veryfunnyads.comveryfunnyads.com– WidgetsWidgets

Mobile Advertising, Mobile searchMobile Advertising, Mobile search

Advantages of Internet as an Advantages of Internet as an Advertising MediumAdvertising Medium

Buyers often visit search engines and Buyers often visit search engines and other web sites when in “purchase other web sites when in “purchase corridor”corridor”

Can change creative approach Can change creative approach quicklyquickly

Click-through rates, page views, Click-through rates, page views, conversion rates easily tracked conversion rates easily tracked (“clickstream” data also)(“clickstream” data also)

Blogs/Social Networks/Discussion Blogs/Social Networks/Discussion GroupsGroups

Robert Scoble’s book: Robert Scoble’s book: Naked Naked ConversationsConversations– Marketing junk is resisted (read “Flogs”)Marketing junk is resisted (read “Flogs”)– Authenticity is expectedAuthenticity is expected

(well, with the exception of satirical blogs such as (well, with the exception of satirical blogs such as fakesteve.com)fakesteve.com)

Pretending to be someone you’re not Pretending to be someone you’re not may bring negative attentionmay bring negative attention– Still, there is some “seeding” of discussions Still, there is some “seeding” of discussions

and some underground activityand some underground activity

Blogs/Social Networks/Discussion Blogs/Social Networks/Discussion GroupsGroups

Internet buzz is not independent of Internet buzz is not independent of other marketing mix variablesother marketing mix variables– Advertising and other promotions increase Advertising and other promotions increase

buzzbuzz

Read “Five Rules of Underground Read “Five Rules of Underground Marketing”Marketing”

http://www.clickz.com/showPage.html?phttp://www.clickz.com/showPage.html?page=3624847age=3624847

What are the 5 rules?What are the 5 rules?

Personal SellingPersonal Selling

Face to faceFace to face communication with communication with buyers to inform and persuade them buyers to inform and persuade them to buyto buy


On average, companies spend more On average, companies spend more money/yr on personal selling than money/yr on personal selling than other elements of promo mixother elements of promo mix


Major Advantage:Major Advantage: More persuasive More persuasive Major DisadvantageMajor Disadvantage Costly per individual reachedCostly per individual reached


Objectives:Objectives: Finding ProspectsFinding Prospects

Converting Prospects to CustomersConverting Prospects to Customers

Maintaining Customer SatisfactionMaintaining Customer Satisfaction


Personal selling most likely for new, Personal selling most likely for new, complex, and/or expensive productscomplex, and/or expensive products

The web now does some personal The web now does some personal selling tasks selling tasks – For example, Apple has a 20 minute sales For example, Apple has a 20 minute sales

presentation for the iPhone on its sitepresentation for the iPhone on its site– Cadillac has a site called Cadillac has a site called

mycadillacstory.commycadillacstory.com where celebrities and where celebrities and others post cadillac-related videos (soft sell, others post cadillac-related videos (soft sell, but it’s selling)but it’s selling)

Sales PromotionSales Promotion

A A direct inducementdirect inducement, offering , offering added added valuevalue or incentive for the product, to or incentive for the product, to resellers, salespersons, or resellers, salespersons, or consumers.consumers.

Sales PromoSales Promo

25 yrs ago, % of spending on 25 yrs ago, % of spending on advertising was 70%advertising was 70%

In recent years, about 25%In recent years, about 25% Shift largely been to Shift largely been to trade promotrade promo (But, the advertising pie has grown (But, the advertising pie has grown

as well)as well)


Why the shift?Why the shift?– Ad clutterAd clutter– VCRs (zipping)VCRs (zipping)– Channel surfing (zapping)Channel surfing (zapping)– Various recessionsVarious recessions


Why the shift?Why the shift?– Marketplace factorsMarketplace factors– similarity between goodssimilarity between goods– short term focus of managersshort term focus of managers– consumer expectationsconsumer expectations– private label competitionprivate label competition

Common Objectives of Sales Common Objectives of Sales PromotionPromotion

Short term sales stimulationShort term sales stimulation– Induce trialInduce trial– Retain current customers/increase Retain current customers/increase

usageusage– Reinforce advertising effortsReinforce advertising efforts– Build trade support for campaignBuild trade support for campaign– Motivate sales forceMotivate sales force

Comments on Sales PromoComments on Sales Promo

““We’re in a very interesting phase in We’re in a very interesting phase in [sales] promotion. On one hand, we [sales] promotion. On one hand, we have had the meteoric advances of have had the meteoric advances of promotion understanding and promotion understanding and consumer intelligence brought about consumer intelligence brought about by scanners and database by scanners and database management. Then on the other management. Then on the other hand, we see the …. Success of hand, we see the …. Success of Batman glasses at Taco Bell --Batman glasses at Taco Bell --

Comments on Sales PromoComments on Sales Promo

--over 4 million given away-- and we --over 4 million given away-- and we realize that it’s the same type of realize that it’s the same type of promotion America used to court promotion America used to court movie goers on Saturday afternoons movie goers on Saturday afternoons in the 1930s. It surely shows how in the 1930s. It surely shows how human nature doesn’t change.”human nature doesn’t change.”

----William Robinson, William Robinson, Promotional MarketingPromotional Marketing

Two types:Two types:

Consumer-oriented (pull)Consumer-oriented (pull) Trade-oriented (push)Trade-oriented (push)

Consumer PromotionsConsumer Promotions

SamplesSamples CouponsCoupons PremiumsPremiums Contests and SweepstakesContests and Sweepstakes Price DiscountsPrice Discounts

Trade PromotionsTrade Promotions

Trade allowancesTrade allowances Dealer contestDealer contest POPPOP Co-operative advertisingCo-operative advertising Trade showsTrade shows Collateral materialsCollateral materials Price DiscountsPrice Discounts

Main Issue in Sales PromoMain Issue in Sales Promo

What is the long term impact on What is the long term impact on brand equity? (especially with price brand equity? (especially with price discounting)discounting)


Short term bribe point of view:Short term bribe point of view: Buyers purchases on special deals Buyers purchases on special deals

often become less brand loyal often become less brand loyal


Long term sales building view:Long term sales building view: Helps achieve shelf placement/ in-Helps achieve shelf placement/ in-

store display,thus increasing visibilitystore display,thus increasing visibility Consumers have little time to notice Consumers have little time to notice

ad messages; sales promo get ad messages; sales promo get attention.attention.

Main Issue in Sales PromotionsMain Issue in Sales Promotions

Ideally:Ideally: Sales promo results in short term Sales promo results in short term

sales with long term equity building.sales with long term equity building. Both objectives needed in a Both objectives needed in a

competitive market.competitive market.

More Comments on Sales More Comments on Sales PromotionsPromotions

““For years, sales promotion meant MDF For years, sales promotion meant MDF funds (Market Development Funds, an funds (Market Development Funds, an innocuous word for slush money to pay off innocuous word for slush money to pay off retailers for promoting your product), giant retailers for promoting your product), giant displays and tacky potholders. But now displays and tacky potholders. But now the industry has grown up…Marketers are the industry has grown up…Marketers are looking to promotions to build their looking to promotions to build their brand’s sales to insure a future for their brand’s sales to insure a future for their brand’s tomorrow.”brand’s tomorrow.”

--William Robinson, --William Robinson, Promotional MarketingPromotional Marketing

PublicityPublicity

Non-personalNon-personal communication in communication in news news story formstory form, regarding an organization , regarding an organization and/or its products, transmitted and/or its products, transmitted through a through a mass mediummass medium at at no no chargecharge..

The story is free; PR people are notThe story is free; PR people are not

Public RelationsPublic Relations

Brings advantage vs. advertising -- Brings advantage vs. advertising -- more credibilitymore credibility

Little control over message Little control over message content or timingcontent or timing

PR takes great coordination/effort PR takes great coordination/effort

Types of PublicityTypes of Publicity

News ReleaseNews Release Feature ArticleFeature Article Press ConferencePress Conference Letters to the EditorLetters to the Editor EditorialEditorial Special EventsSpecial Events

Integrated Marketing Integrated Marketing Communications and PRCommunications and PR

Complements event sponsorship & Complements event sponsorship & trade showstrade shows

New products with special angles can New products with special angles can be supported by PRbe supported by PR

Marketing campaigns with a special Marketing campaigns with a special “hook” are newsworthy“hook” are newsworthy

PR ObjectivesPR Objectives

Informing buyers how to select, buy Informing buyers how to select, buy or use your productor use your product

Dispelling negative info about brandDispelling negative info about brand Build store trafficBuild store traffic Support event sponsorships, trade Support event sponsorships, trade

shows, other promo activitiesshows, other promo activities Persuade target audience to Persuade target audience to

purchase brandpurchase brand

Increase awareness

Explain how product works

Suggest new uses

Build company image

Informative Promotion

Goals and Tasks of PromotionGoals and Tasks of Promotion

Persuasive Promotion


Encourage brand switching

Change customers’ perceptions of product attributes

Influence immediate buying decision

Persuade customers to call

Reminder Promotion


Remind customers that product may be needed

Remind customers where to buy product

Maintain customer awareness

The AIDA ConceptThe AIDA Concept

Action

Desire

Interest

Attention Cognitive (thinking)

Affective (feeling)

Conative (doing)

Different promotional methods are better at different parts of AIDA – also we can evaluate an entire marketing communication effort by evaluating the success we are having with consumers at each step of the model.

Documents

Promotions Promotions Dr. Mary Wolfinbarger Marketing 300