MAR 4333521

1
MAR 4333-521

• Promotion Management
• Internet (Finish)
• Sales Promotion
• Rich Gonzalez University of South Florida
• Fall 2003Sarasota
• November 15, 2003

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URLs (used today)

• intel.com/go/hotspots
• amazon.com
• www.bestbuy.com
• biz.yahoo.com/prnews/031111/nytu134_1.html
• www.boingo.com
• www.panera.com
• www.lavasoft.de
• www.napster.comwww.itunes.comwww.musicmatch.com

3
November 15, 2003--Agenda

• Mini-Evaluation of Your Ad
• Chapter 15Internet-Finish
• Wi-Fi Promotions Potentiality
• Chapter 16Sales Promotion
• For November 22
• Exam 2 and Coverage

4
To Jennifer From Promotion Management Class
5
Schedule

• Nov 15 Internet, Sales Promotion
• Nov 22 Public Relations, Publicity, and
  Corporate Advertising 17 Assignment P
  (due)--Presentations
• Nov 29 Measuring Promotional Program
  Effectiveness 19Assignment P (due)--Presentation
  s
• Dropped from syllabusChapters 13, 21, 22

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Chapters Covered on Exam 2

• Media--Chapter 10, 11, 12
• InternetChapter 15
• Sales PromoChapter 16
• Public RelationsChapter 17
• Measuring EffectivenessChap. 19
• Dropped from syllabusChapters 13, 21, 22

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For Today November 15

• Chapter 16- Sales Promotion(IMC Perspective
  16-4, Perils of Promotions)(IMC Perspective
  16-5, Intel Inside)
• Bring in a printed article in Mediaweek abouta.
  Your Project P product/service, orb. Any other
  product/servicec. Be prepared to discuss
• Due November 15

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For November 22

• Chapter 17- Public Relations(IMC Perspective
  17-1, PR Blunders)(IMC Perspective 17-2, Naming
  Stadia)

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Assignment PNew Product Promotion

• Stage II
• Investigate and Report
• Summary of Product/Service
• Summary of Promotion EffortsObjectives Target
  MarketUse of IMCMedia StrategyMedia Used
  Agency UsedBudget DescriptionSales Promotions

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Assignment PNew Product Promotion

• Stage III
• 10 Minute PresentationDescriptive
• Opinion/Analysis
• Performance of Promotional Efforts
• Prediction on Success of Product/Service

Due November 22
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Assignment PDeliverable

• Report
• Cover Sheet2 pagesBullets OKNarrative
  SummaryCopies for 13 Other Students
• Opinion/Analysis
• Performance of Promotional Efforts
• Prediction on Success of Product/Service

All Copies Are Due On November 22
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Mini-Evaluation of Your Ad
13
Mini-Evaluation of Your Ad

• Target
• Media Channel
• Agency
• Media Plan
• Consistency
• Apparent Objective
• Reach
• Cost/Budget Estimate
• Performance Evaluation
• Critique-Suggestion

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Prediction

• Business is going to change more in the next 10
  years than it has in the past 50.
• William H. Gates III, 2000

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Prediction

• Everyone will have access to most of the worlds
  information.
• William H. Gates III, 2000

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MAR 4333-521

• Wi-Fi
• Rich Gonzalez University of South Florida
• November 15, 2003

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BandwithConsumer Context

• Dialup
• ISDN
• Cable
• DSL
• T1
• 802.11b (Wi-Fi)
• 3G

• 56 K
• 128 K
• 150 to 300 K
• 100 to 500 K
• 1400 K
• 300 to 500 K
• 144 K

K kilobits per second
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Wi-Fi

• Boingo Wireless
• www.boingo.com

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Wi-Fi

• Hot SpotsOffices, Cafes, Parks
• 4 Million Using Now, Worldwide
• Estimate 45 Million Business Laptops-- 2004
• Estimate 4.2 Million Households Have Wireless--
  2004
• Max Speed 11,000 K (802.11b)

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Standards

• 802.11b
• 802.11a
• 802.11g

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Location Identification

• Directory of Free LocationsWiFiFreeSpot.comFreeH
  otSpots.com
• Directory of Paid and Free LocationsHotSpotLIst.c
  om
• Advocate -Generalintel.com/go/hotspots

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Borders

• T-Mobile

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Panera

• In-House and Free
• Nationwide Rollout
• www.panera.com

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The Digital Canopy project

• Covers a 12 block area in downtown Tallahassee FL

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Top 10 Countries/RegionsNo. of Hotspots

• United States (10859)
• United Kingdom (2282)
• Germany (684)
• Taiwan (567)
• Japan (481)
• Australia (452)
• Sweden (368)
• Austria (328)
• France (305)
• Canada (297)

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Start Chapter 15
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Very Early Internet Ad

• Lifeminder ad
• Objective Get customers to web site

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Internet - Overview

• A worldwide means of exchanging information and
  communicating through a system of interconnected
  computers from military, government, educational
  and commercial sources.
• Components include
• Electronic mail method of sending messages
• electronically
• World Wide Web universal database of
• information available to internet users

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Elements of the Internet

• Electronic mail (e-mail)
• Allows users to send electronic mail
• Usenet
• Discussion groups, newsgroups, bulletin boards
• Telnet
• Databases, library catalogs, and electronic
  journals
• File transfer protocol (ftp)
• Software protocol for transferring files
• Hypertext transfer protocol (http)
• Software protocol for transferring hypertext
  language files
• Client server
• Computer system for transferring files between
  computers
• Gopher
• Document retrieval system used to search for
  Information
• Wide Area Information Server (WAIS)
• Use of keywords in databases to retrieve full
  text information
• World Wide Web (WWW)
• Sound, graphic images, video, and hypertext on
  single pages

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Uses of the Internet for Marketing

• Electronic business use of the Internet to
• conduct business activities
• Electronic marketing the use of the Internet
• to conduct marketing activities
• Electronic commerce use of the Internet for
• buying and selling products and services
• Electronic media using the Internet as an
• advertising medium and a way to disseminate
• information to consumers

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The Internet Picture
Senders
Internet
Receivers
Internet
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Internet Terms

• Ad clicks
• Ad click rate
• Ad views (impressions)
• Banner
• Button
• CPC
• CPM
• Domain name
• Hit

• Interstitial
• Link
• Opt-in-e-mail
• Page views
• Rich media
• Sponsorships
• Unique users
• Valid hits
• Visits

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Internet Communications Objectives

• To create awareness
• To generate interest
• To disseminate information
• To create an image
• To create a strong brand
• To stimulate trial

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Skyy Blue creates an image for the brand through
its web site
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Internet Advertising

• Sponsorship
• Ownership of an entire site or page
• Banner Ads
• A portion of another owners page
• Pop-Ups
• Small windows that appear automatically
• Interstitial
• Ads appearing while waiting for a page to load
• Push Technologies or Webcasting
• Automatic or unsolicited message delivery
• Links
• Hypertext links to other sites, pages or locations

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Banner ads come in a variety of formats
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Personal Selling on the Internet

• May replace personal selling
• Reduces high cost of personal calls
• Vastly increases potential reach
• May enhance personal selling efforts
• Provides quick, easy, information to prospects
• May be a source of leads
• May help to enhance customer data bases
• May stimulate trial of the goods or service
• May improve one-on-one communications
• May serve as a sales conference medium

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Internet Ads

• An array of early ads
• Objective Get customers to web site

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Sales Promotion on the Internet

• Offering consumers special incentives via the
  internet to encourage trial, repeat purchase, or
  customer loyalty
• Distribution of samples, coupons
• Ability to enter contests, sweepstakes
• Premium offers
• Loyalty programs

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Pepsi uses the Internet for promotions
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Public Relations on the Internet

• Internet as a medium for conducting PR
• Media relations websites
• Dissemination of customized information
• Provision of information on the company
• and its products
• Philanthropic activities

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Internet Direct Marketing

• Direct Mail
• Highly targeted
• Relies on e-mail lists
• Attempts to reach those with specific needs
• Often used by catalogers
• Marketing Databases on the Net
• Companies build or acquire a database
• The database is sold to subscribers
• Delivery may be on- or off-line

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Internet Direct Marketing

• Infomercials
• Program content similar to television, cable or
  satellite
• Web provides for greater audience interaction
• E-Commerce
• Rapid growth rates likely to continue
• CDs, books, travel are main categories
• Clothing, cars, financial services are all
  gaining ground

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eBay is a popular site for e-commerce
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eBay

• Site Visit, if time

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Measures of Effectiveness

• Online Measuring
• Data on demographics, psychographics, location of
  access, media used, buying habits, and more.
• Recall and Retention
• Daily user interviews to measure recall and
  retention of web content viewed
• Nonresponse
• Measures of destination after failure to
  click-through
• Surveys
• On- and off-line surveys to determine usage
  factors
• Panels
• Usage and attitude data obtained from a specific
  group
• Sales
• Sales volume keyed to specific times and sites
• Tracking
• Accumulation of site performance data

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Sources of Measurement Data

• Arbitron
• Audit Bureau of Circulation
• Internet Advertising Bureau (IAB)
• iVALS
• PC-Meter
• eMarketer
• eAdvertiser
• Double-Click
• 24/7
• Jupiter, Forrester and MediaMetrics
• Business 2.0, Industry Standard, Fast Company
• Internet Advertising Report and Individual.com

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Internet Advantages

• Target Marketing
• Message Tailoring
• Interactive Capabilities
• Information Access
• Sales Potential
• Creativity
• Exposure
• Speed

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Internet Disadvantages

• Measurement problems
• Audience characteristics
• Websnarl
• Clutter
• Potential for deception
• Costs
• Limited production quality
• Poor reach

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Ad aware

• ClearSearch
• File names Loader.exe
• When Adware.ClearSearch is executed, it performs
  the following actionsAdds the
  value"ClrSchLoader""path"to the registry keyHKEY_LOCAL_MACHINE\S
  OFTWARE\Microsoft\Windows\CurrentVersion\Run
• Periodically updates itself by downloading
  control data from the search site, for example,
  www.clrsch.com.
• Contacts the search site to track advertisements.

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End Chapter 15
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Begin Chapter 16
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Perils of Promotions

• IMC Perspective 16-4
• Kraft Pepsi
• Kraft Clause
• McDonalds and Simon Marketing

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Intel Inside Promotion

• What is a CPU?
• Who are the competitors?
• Dahlin, Smith, White
• Objective Awareness (Brand Equity)
• Cooperative Advertising 5
• How much have they spent?
• Successful? What is the measure?
• Market Share 80
• Old StrategyIngredient Branding

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We Stopped Right Here at 1248 PM !
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Best Buy--

• Product Promotion and DistributionU.S. and
  Canada
• Rolling StonesForty Flicks, 4 DVD Set
• Sold In Best Buy Exclusively, 4 Months
• 700 Stores
• Issues, Significance?
• http//story.news.yahoo.com/news?tmplstoryu/nm/
  20031011/music_nm/music_best_buy_dc_2

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Best BuyMonster Promotion

• Product Promotion and DistributionU.S. and
  Canada
• Rolling StonesFour Flicks, 4 DVD Set
• Sold In Best Buy Exclusively, 4 Months
• 700 Stores
• Issues, Significance?
• http//story.news.yahoo.com/news?tmplstoryu/nm/
  20031011/music_nm/music_best_buy_dc_2

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Best BuyMonster Promotion

• TV Ads
• Print Ads
• Online Advertising
• Sunday circulars
• In-store Advertising
• http//biz.yahoo.com/prnews/031111/nytu134_1.html

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Sales Promotion
A direct inducement that offers an extra value
or incentive for the product to the sales force,
distributors, or the ultimate consumer with the
primary objective of creating an immediate sale.

• An extra incentive to buy
• An acceleration tool
• An inducement to intermediaries
• Targeted to different parties

60
Sales Promotion Vehicles
Consumer-Oriented
Trade-Oriented
Samples
Contests, dealer incentives
Coupons
Trade allowances
Premiums
Point-of-purchase displays
Contests/sweepstakes
Training programs
Refunds/rebates
Trade shows
Bonus packs
Cooperative advertising
Price-off deals
Frequency programs
Event marketing
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Allocations to Advertising, Trade Promotions and
Consumer Promotions
100
Consumer Promotions
90
80
70
Media Advertising
60
50
40
30
Trade Promotions
20
10
0
'89
90
91
92
'93
'94
'95
'96
'97
'98
'99
00
Percent of total promotional dollars, 3-year
moving average.
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Reasons for Increase in Sales Promotion

• Growing Power of Retailers
• Declining Brand Loyalty
• Increased Promotional Sensitivity
• Brand Proliferation
• Fragmentation of Consumer Markets
• Short-Term Focus
• Increased Accountability
• Competition
• Clutter

63
Sales Promotion Uses

• Introduce new products by encouraging trial and
  repurchase
• Get existing customers to buy more
• Attract new customers
• Defend current customers
• Maintain sales in off season
• Target a specific market segment
• Enhance IMC efforts and build brand equity

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Promotion to Encourage New Uses
Source Courtesy Church Dwight Co., Inc.
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Objectives of Consumer-Oriented Sales Promotion

• To Obtain Trial and Repurchase
• To Increase Consumption of an Established Brand
• To Defend (Maintain) Current Customers
• To Target a Specific Segment
• Enhance IMC programs and build brand equity

66
Contests can be used to build brand equity
67
Sampling

• Providing consumer with some quantity of a
  product for no charge to induce trial
• Works best when
• The products are of relatively low unit
• value, so samples dont cost much
• The products are divisible and can be
• broken into small sizes that can reflect
• the products features and benefits
• The purchase cycle is relatively short
• so the consumer can purchase in a relatively
  short time period

68
Coupons

• The oldest and most widely used sales promotion
  tool
• Nearly 240 billions distributed each year in the
  United States
• 80 percent of consumers use coupons and 25 use
  them regularly

69
Advantages and Limitations of Coupons

• Disadvantages
• Difficult to determine how many consumers will
  use coupons and when
• Coupons are often used by loyal consumers who may
  purchase anyway
• Declining redemption rates and high costs of
  couponing
• Misredemption and fraud

• Advantages
• Appeal to price
• sensitive consumer
• Can offer price break
• without retailers coop
• Can be effective way
• to induce trial of new or existing products
• Can be way to defend
• market share and
• encourage repurchase

70
Coupon Distribution
71
Percent of sales made with coupons for various
products
72
Coupon Trends

• Major companies cutting back on
• use of coupons
• Searching for more effective coupon
• techniques
• More use of internet for distribution

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Premiums

• An offer of an item of merchandise or service
  either free or at a low cost that is an extra
  incentive for customers
• Two types of premiums
• Free premiums -
• only require purchase of the product
• Self-liquidating premiums -
• require consumer to pay some or all of the
  cost of the premium

74
Contests and Sweepstakes
Contest a promotion where consumers compete for
prizes or money on the basis of skills or
ability. Winners are determined by judging
entries or ascertaining which entry comes closes
to some predetermined criteria
Sweepstakes/games a promotion where winners are
determined purely by chance and cannot require a
proof of purchase as a condition for entry.
Winners are determined by random selection from
the pool of entries or generation of a number to
match those held by game entrants.
75
Other Popular Consumer SalesPromotion Tools

• Refunds and Rebates
• Bonus Packs
• Price-off deals
• Frequency/loyalty programs
• Event marketing

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Trade-Oriented Sales Promotion Objectives

• Obtain Distribution of New Products
• Maintain Trade Support for Existing Products
• Encourage Retailers to Display and Promote
  Existing Brands
• Build Retail Inventories

77
Types of Trade-Oriented Promotions

• Contests and Incentives
• Trade Allowances
• Buying Allowances
• Promotional Allowances
• Slotting Allowances
• Point-of-Purchase Displays
• Sales Training Programs
• Trade Shows
• Cooperative Advertising

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The Sales Promotion Dilemma
Our Firm
Maintain Promotions
Cut Back Promotions
We lose market share
Same market share, profits stay low
Maintain Promotions
All Others
Higher profits for everyone
We gain in market share
Cut Back Promotions
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Promotion Targeted to Reseller Salespeople

• Product or program sales
• Selling a specific number of cases
• Selling a specific number of units
• Selling a specific number of promotional programs
• New account placements
• Number of new accounts opened
• Number of new accounts ordering a minimum amount
• Promotional programs placed in new accounts
• Merchandising efforts
• Establishing promotional programs
• Placing display racks, counter and other p-o-p
  displays

80
Shifting Role of Sales Promotion Agencies

• THEN
• Created tactics
• Single project basis
• Hired for specialty
• Single agency contact
• Inferior to ad agency
• Indirect accountability

• NOW
• Create strategy
• Continuing service
• One full-service firm
• Agency team contact
• Equal to ad agency
• Directly accountable

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End Chapter 16