Promotion

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Promotion
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• Sales Promotion

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Sales Promotion

• Marketing activities that provide extra value or
  incentives to the sales force, distributors, or
  the ultimate consumer and can stimulate immediate
  sales.
• Broken into two categories
• Consumer-oriented
• Trade-oriented

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Sales PromotionConsumer Oriented

• Directed to ultimate consumers (sometimes called
  consumer promotions)
• Sales tools used to support a companys
  advertising and personal selling

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Sales PromotionConsumer Oriented

• Coupons offer consumers a chance to buy a product
  or service at a discount
• Advantages
• Only about 2 are redeemed
• Can get online (www.couponsonline.com)
• Disadvantages
• Can reduce revenue from existing customers
• Coupons can cost the company up to 3 times the
  face value
• Coupon fraud

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Sales PromotionConsumer Oriented

• Deals are short-term price reductions
• Advantages
• Consumer may be more willing to try product
• Disadvantages
• Consumers may wait to buy to get the deal
• Consumers may perceive the product to be of less
  value

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Sales PromotionConsumer Oriented

• Premiums are merchandise offered for free or a
  lot less than retail price
• Clinique Bonus Week
• Get a dog toy with 2 proofs of purchase for 8.99
• Advantages
• Consumers enjoy getting items for free or reduced
  prices
• Get consumers to buy product repeatedly
• Disadvantages
• Consumers may not like your product, they just
  want the premium

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Sales PromotionConsumer Oriented

• Contests are when consumers can win a prize for
  participating in some activity. Usually involves
  a lot of thought, creative thinking.
• Brawny Man, enter contest with essay and win a
  Dodge
• Advantages
• Get consumers involved with the product
• Disadvantages
• May require a lot of effort on the consumers part

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Sales PromotionConsumer Oriented

• Sweepstakes require consumers to submit an entry,
  but require no analytical or creative effort by
  the consumer
• Advantages
• Get consumers involved with the product
• Disadvantages
• Consumers may not buy after the sweepstakes is
  over
• Pepsis Music Giveaway

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Sales PromotionConsumer Oriented

• Samples are products offered for free or greatly
  reduced prices
• Advantages
• Little risk for consumers
• Creates awareness
• Disadvantages
• Expensive for company

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Sales PromotionConsumer Oriented

• Loyalty programs are used to encourage and reward
  repeat purchases by acknowledging every purchase
  made
• Frequent flier miles
• Kroger Plus card points
• Advantages
• Loyalty from customers
• Disadvantages
• Expensive for company

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Sales PromotionConsumer Oriented

• Point-of-purchase displays are located in store
  aisle ways, can be signs or cut-outs holding
  product and/or product literature
• Advantages
• Get consumers attention
• Good location
• Disadvantages
• Hard to get that good location

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Sales PromotionConsumer Oriented

• Rebates offer money back for purchasing a product
  or service
• Advantages
• People like the idea of getting money back
• Gets people to buy product
• On low-priced items, many people never redeem
  because of effort involved
• Disadvantages
• Expensive
• Rebate fraud

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Sales PromotionConsumer Oriented

• Product placement is getting a brand name product
  into a movie, tv show, video, or commercial for
  another product
• Advantages
• Gets consumers attention in a non-threatening way
• Disadvantages
• Expensive (usually)
• Loss of control over product

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Sales PromotionTrade-Oriented

• Sales tools supporting advertising directed to
  wholesalers, retailers, or distributors
• Allowances and discounts
• Cooperative advertising
• Training of sales force

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Sales PromotionTrade-Oriented

• Allowances and Discounts
• Reimbursing a retailer for extra support of a
  product (merchandise allowancing).
• Newspaper ads
• Case allowances are discounts on cases ordered
  during a certain time period

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Sales PromotionTrade-Oriented

• Allowances and Discounts
• Finance allowance pays retailers for costs or
  losses during consumer sales promotions
• Get retailer to warehouse a lot of product during
  the promotion, if doesnt sell then buys it back
  or give a discount on next order
• Give freight allowances on orders shipped from
  manufacturers warehouse
• Disadvantages
• Some retailers might only buy when allowances or
  discounts are offered

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Sales PromotionTrade-Oriented

• Cooperative Advertising
• Manufacturer pays some of retailers cost of
  advertising their product
• Training Sales force
• Get salespeople more knowledgeable about
  manufacturers product

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• Public Relations

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Public Relations

• The management function which evaluates public
  attitudes, identifies the policies and procedures
  of an individual or organization with the public
  interest, and executes a program of action to
  earn public understanding with acceptance
• Uses publicity along with lots of other tools
  special publications, community activities,
  fundraising, event sponsorship, etc.

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Public Relations

• Programs are not a one time event that happens
  all at once, last months sometimes years
• Is much more than just an activity to sell a
  product
• Creates goodwill
• Announce organizational changes
• State companies position on an issue

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Public Relations

• PR activities are sometimes designed to help
  fulfill marketing objectives
• Raises awareness about a product or service
• Informs and educates about a product or service,
  or company
• Helps to gain understanding and trust from
  consumers

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Public Relations Supporting Marketing Objectives

• Build marketplace excitement before media
  advertising begins
• New product announcements
• Providing a value-added service
• Butterball established a hot line around the
  holidays on how to prepare your turkey

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Public Relations Supporting Marketing Objectives

• Building brand-to-consumer bonds
• Pillsbury Bake-off
• Provide product information or company
  information to opinion leaders
• Defending a product at risk and give a reason to
  buy
• Working with environmental groups (McDonalds)

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Public Relations Supporting Marketing Objectives

• Examples
• Campbells Soup
• For the 40th anniversary of Swanson frozen
  dinners, released press releases only and had a
  44 increase in sales
• WD-40
• Asked consumers how they use WD-40 and had over
  1,200 people respond and coverage on television
  news and newspapers

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Who is Targeted by Public Relations?

• Employees of the firm
• Maintain and showcasing results of employees
  efforts
• Organizational newsletters
• Bulletin boards
• Paycheck envelope stuffers
• Social events (corporate sports teams, picnics,
  Christmas parties)

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Who is Targeted by Public Relations?

• Stockholders and Investors
• Annual Report shows financials and can inform
  readers of why company is doing well or not, what
  their future plans are, etc. Promotes goodwill.
• One year McDonalds Annual Report told of their
  recycling efforts and one year they had a 12-page
  insert on nutrition

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Who is Targeted by Public Relations?

• Community Members
• People that live and/or work in the area where a
  company is located
• Have releases showing how the company is involved
  in community activities
• Reducing air pollution
• Protecting wildlife

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Who is Targeted by Public Relations?

• Suppliers and Customers
• Want to maintain goodwill with suppliers and the
  public
• If customers and suppliers do not think the
  company is socially conscious they may buy/sell
  somewhere else

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Who is Targeted by Public Relations?

• Suppliers and Customers
• Ex San Diego Gas and Electric
• Had extremely high rates
• Management mistakes caused even higher rates
• Announced a plan to build a nuclear plant near
  the ocean
• Company cars were vandalized
• Campaign TV spots showed how to save energy and
  in turn, save money. Print ads tried to show
  management in positive light, and created
  community involvement programs

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Who is Targeted by Public Relations?

• Media (External)
• Most critical
• They determine what people see in newspapers and
  the news, and how the news is presented
• Issue press releases, allow interviews, and have
  special events for media

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Public Relations Tools

• Press Release (or news release)
• Provides factual information to the press
• Usually wont be used unless its of interest to
  readers/viewers of medium its sent to
• Exclusives
• Offering a medium exclusive rights to a
  particular story (that medium usually reaches
  many target audience members)
• May increase acceptance of story

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Public Relations Tools

• Press Conference (or news conference)
• Political figures, organizations, and
  corporations use very effectively
• Has to be of major interest to a specific group
• Used to report
• Major accomplishments (Super Bowl or Olympics
  location)
• Major breakthroughs (medical cures)
• Emergencies or catastrophes
• Local community events or developments
• Introduction of new product or advertising
  campaign
• Pepsi used to announce termination of Michael
  Jackson contract

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Public Relations Tools

• Interviews
• People usually pay attention to personal
  interviews
• Jack in the Box
• 4 people died from eating contaminated hamburgers
• President of company gave personal interviews to
  tell of corrective actions taken by the company
• Using highly visible individuals
• Coordinated with advertising, etc.

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Public Relations Tools

• Community Involvement
• Membership in local organizations
• Chamber of Commerce, Kiwanis, Jaycees
• Photo kits, trade shows
• Sponsorship of childrens sports teams
• In 1993 and 1997 there were huge floods in the
  Midwest
• Maytag issued press releases telling how to deal
  with waterlogged appliances
• State Farm established flood relief centers

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Advantages of Public Relations

• Credibility
• Not viewed as advertising because most people do
  not realize that the organization paid for
  communication either directly or indirectly
• Media arent being compensated so some view
  information as more truthful
• Article on benefits of aspirin in newspaper may
  appear more credible than an ad for brand of
  aspirin
• Can use news about a product as focus of ad
• Best, Product of the Year according to

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Advantages of Public Relations

• Cost
• Very low compared to advertising
• Not cluttered
• Perceived as news items, not cluttered with ads
• Reach specific groups
• Small companies cant afford a lot of advertising
  and promotional activities so by using public
  relations they can get their message to these
  groups

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Advantages of Public Relations

• Image building
• Develops a positive image for organization
• In 1982, 7 people died after taking Extra
  Strength Tylenol contaminated with cyanide
• Within 1 week, Tylenol market share fell from 35
  to 6
• Strong public relations efforts and a strong
  product and corporate image helped the brand
  recover

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Disadvantages of Public Relations

• Biggest disadvantage is the message may not reach
  targeted audience

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• Publicity

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Publicity

• The nonpersonal communications regarding an
  organization, product, service, or idea not
  directly paid for or run under identified
  sponsorship.
• Usually in the form of a news story, editorial,
  or announcement about an organization and/or its
  products and services.

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How is Publicity Different from Public Relations?

• Publicity is usually short-term, public relations
  efforts extend over a period of time
• Public relations provides positive information
  about the organization and is usually controlled
  by the organization or its agent. Publicity is
  sometimes positive, but can be negative and is
  not necessarily in the control of the
  organization.

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Power of Publicity

• If the publicity is generated inside the
  organization, the public relations department
  usually controls it
• Highly credible because not perceived as
  advertising or company sponsored
• Consumer Reports had an ad campaign telling how
  they accept no advertising so they can be
  objective Consumer Reports is a form of
  publicity

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Power of Publicity

• Has news value and creates exposure
• Lays potato chips ad had Larry Bird and Kareem
  Abdul-Jabbar, this ad was greatly publicized by
  the media

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Examples of Publicity

• O.J. Simpson trial
• Bruno Magli shoes sales increased by 30 after it
  was reported that the murderer wore this brand of
  shoes
• Back Saver chair sales increased 42 after Judge
  Ito and the attorneys in the case requested this
  chair during the trial
• Consumer Reports
• Gave the Isuzu Trooper a negative write-up and
  sales decreased by 83
• Cabbage Patch Kids and Tickle Me Elmo

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Controlling Publicity

• When negative information is released, the
  organization has to understand how powerful it
  can be and react to it

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Controlling Publicity

• Tree Top
• News media reported that a chemical used by apple
  growers caused cancer in kids, scientific and
  medical reports said otherwise
• Some schools took apples and apple products out
  of their cafeterias
• In response to this negative publicity, Tree Top
  ran ads, sent direct mailings to nutritionists
  and day cares

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Advantages/Disadvantages of Publicity

• Advantages
• Credibility
• News value
• Word of mouth communication
• Perception of media endorsements
• Disadvantages
• Timing
• Too early, too late, not at all
• Accuracy

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