Elements of the Promotional Mix

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Elements of the Promotional Mix

• Chapter 15
• Integrated Marketing Communications

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Promotional Mix

• Blend of personal selling and nonpersonal selling
  designed to achieve promotional objectives

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Personal Selling

• Interpersonal promotional process involving a
  sellers person-to-person presentation to a
  prospective buyer
• 14 million employed in the world
• Oldest form of communication
• Face to face, telephone, interactive online
  marketing, video conferencing

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Nonpersonal Selling

• Includes advertising, product placement, sales
  promotion, direct marketing, public relations
• Non face-to-face

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Advertising

• Paid and non-personal through various media by a
  business firm, not-for-profit, or individual
• Hopes of informing or persuading members of a
  particular audience
• Primarily involves mass media

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Product Placement

• Marketer pays a motion picture or television
  program owner a fee to display his or her product
  prominently in the film or show
• Reeses Pieces in E.T.
• http//www.youtube.com/watch?vAfAzUAxWELU
• Mars turned down the films offer to include MMs

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Sales Promotion

• Stimulates consumer purchasing through displays,
  trade shows, coupons, contests, demos, and
  various nonrecurrent selling efforts
• Short term incentives
• McRib at McDonalds, Chicken Nuggets for 5.99,
  Applebees 9.99 sirloin

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Direct Marketing

• Direct communications other than personal sales
  contact between buyer and seller, designed to
  generate sales, info requests, or store visits
• Direct mail, telemarketing, infomercials
• Applebees 5 off carside orders of 20 or more
  leads to more store visits

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Other Direct Marketing Communication Channels

• Telephone, TV, Newspaper, Magazine, Radio,
  Catalogs

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2/19 Agenda

• Guerilla Marketing
• Sponsorships
• Direct Marketing Communication Channels
• New Project

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Guerilla Marketing

• Unconventional, innovative, and low-cost
  marketing techniques designed to get consumers
  attention in unusual ways
• Relies on time, imagination, and energy
• Scion and Code Red have found success with this
  method
• The Blair Witch Project

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Blair Witchs Guerilla Campaign

• Arguably the most important aspect of a
  successful guerrilla campaign is staying one step
  ahead of the public. As consumers become more
  attuned to ad agency efforts, marketers have to
  figure out how to attack the mob from unexpected
  angles. The brand standard for catching the
  public off guard? 1999's The Blair Witch Project.
  With no stars, no script, and a budget of around
  50,000, University of Central Florida Film
  School pals Daniel Myrick and Eduardo Sánchez
  successfully scrubbed out the line between
  reality and fiction.
• The film's tagline set the stage "In October
  of 1994, three student filmmakers disappeared in
  the woods near Burkittsville, Maryland, while
  shooting a documentary. A year later, their
  footage was found." Audiences were expected to
  believe what they were watching -- shaky,
  low-quality videotape of three runny-nosed kids
  weeping in the woods -- was an edited-down
  version of real recovered footage. And while it
  was certainly an inventive way to challenge the
  boundaries of cinematic storytelling (not to
  mention justifying the low-budget look of the
  film), Blair Witch didn't exactly seem poised to
  rival Titanic. That is, until an inventive
  guerrilla marketing scheme was devised.

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Blair Witch Guerilla Mktg. cont

• To ease the suspension of disbelief and stir up
  some buzz, Sánchez created a Web site devoted to
  the Blair Witch -- a fictitious, woods-based
  specter who'd been snapping up Maryland kids for
  the last century. Although the legend was created
  out of whole cloth, it was soon snapped up by
  gullible Interneters everywhere, and a
  first-ballot hall of fame urban legend was born.
  Pretty soon, thousands of people were terrified
  of the Blair Witch. Even when the actors who
  played the "film students" started showing up
  (alive) doing interviews about the movie, many
  across the country refused to believe the Blair
  Witch wasn't real.
• From that point, the "I've got to see for
  myself" effect took over, and Blair Witch
  dominated at the box office. Considered the most
  effective horror hoax since Orson Welles' The War
  Of The Worlds broadcast, the film grossed 250
  million worldwide. Not a bad return for Artisan
  Entertainment, which paid only 1 million for the
  flick after its Sundance screening.
• Source http//www.cnn.com/2007/LIVING/11/13/gue
  rrilla.marketing/

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Sponsorships

• Provision of funds for a sporting or cultural
  event in exchange for a direct association with
  the events or activity
• Sponsor has, 1) Access to activitys audience and
  2) The image associated with the activity
• Coca-Cola paying 500 million for 11 year deal
  for NCAA Championships

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Sponsorships cont

• Companies are going away from tobacco and alcohol
  sales (Nascar) because of government restrictions
  on these ads
• Assessing sponsorship results p. 500

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Ambush Marketing

• Firm thats not an official sponsor tries to link
  itself to a major international event.
• Samsung putting their logo on hats at the World
  Cup when Phillips was the official sponsor.

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Direct Marketing Communication Project

• Pick groups
• 3 Groups (2 of 2, 1 of 3)
• New Product
• Create new or find one relatively new that no one
  knows about
• Pick 3 of the 6 Communication Channels

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Direct Marketing Communication Project

• Telephone
• Direct Mail
• Newspaper
• Television (NO)
• Magazine
• Radio

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Developing an Optimal Promotional Mix

• Nature of the market
• Nature of the product
• Stage in the product life-cycle
• Price
• Funds available for promotion

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Nature of the Market

• Personal selling works great in a market with
  limited buyers
• Advertising is more effective when a market has
  large numbers of potential customers scattered
  over sizable geographic areas

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Nature of the Market

• The difference between advertising and marketing
• Audiences reached

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Stages in the Product Life Cycle

• Promotional mix must be tailored to the products
  stage in the product life-cycle
• In the introductory stage, there is a heavy
  emphasis on personal selling to the to the
  intermediaries
• In the maturity and early decline stages, firms
  frequently reduce advertising and sales promotion
  expenditures

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Price

• More personal selling for higher priced items
• Why might this be?

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Funds Available for Promotion

• A critical element in the promotional strategy is
  the size of the promotional budget
• McDonalds promotion

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Pulling and PushingPromotional Strategies

• Pulling strategy promotional effort by a seller
  to stimulate demand among final users, who will
  then exert pressure on the distribution channel
  to carry the good or service, pulling it though
  the marketing channel
• Pushing strategy promotional effort by a seller
  to members of the marketing channel intended to
  stimulate personal selling of the good or
  service, thereby pushing it through the marketing
  channel

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Budgeting for Promotional Strategy

• Percentage-of-sales method
• Fixed-sum-per-unit method
• Meeting competition method
• Task-objective method

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Budgeting

• Percentage-of-sales method
• Promotional budget is set as a specified
  percentage of either past or forecasted sales.
• Fixed-sum-per-unit method
• Promotional budget is set as a predetermined
  dollar amount for each unit sold or produced.
• Meeting competition method
• Promotional budget is set to match competitors
  promotional outlays on either an absolute or
  relative basis.

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Budgeting cont

• Task-objective method
• Once marketers determine their specific,
  promotional objectives, the amount (and type) of
  promotional spending needed to achieve them is
  determined.
• Example By the end of next year, we want 75
  percent of the area high-school students to be
  aware of our new, highly automated fast-food
  prototype outlet. How many promotional dollars
  will it take, and how should they be spent?

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Allocation of Promotional Budgets for Consumer
Packaged Goods
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Measuring the Effectiveness of Promotion

• Direct sales results measures the effectiveness
  of promotion by revealing the specific impact on
  sales revenues for each dollar of promotional
  spending
• Indirect evaluation concentrates on quantifiable
  indicators of effectiveness like
• Recall - how much members of the target market
  remember about specific products or
  advertisements
• Readership size and composition of a messages
  audience

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The Value of Marketing Communications

• Social Importance
• The one generally accepted standard in a market
  society is freedom of choice for the consumer
• Promotion has become an important factor in
  campaigns aimed at achieving socially oriented
  objectives like the elimination of drug abuse

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Addressing Social Concerns
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The Social Importance Merck Vaccine Division
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Business Importance

• Promotional strategy has become increasingly
  important to both small and large firms
• Its effectiveness to encourage attitude changes,
  brand loyalty and increase sales is
  well-documented

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Business Importance

• Both business and nonbusiness enterprises
  recognize the importance of promotional efforts
• Nonbusiness organizations using promotion include
  governments and religions

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Economic Importance

• Effective promotion has allowed society to derive
  benefits not otherwise available
• Subsidizes the information contents of newspapers
  and the broadcast media