PROMOTION

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• PROMOTION
• The Art Science of
• Persuasive Communications

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Integrated Marketing Communications

• Coordinated
• Complementary
• Consistent
• Complete

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The Promotions Mix
Promotion
Non- Personal
Personal Selling
Sales Promotion
Direct Marketing
Advertising
PR
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The Promotions Mix

• Personal Selling
• Non-personal Selling
• Advertising
• Publicity Public Relations
• Sales Promotion
• Direct Marketing

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Pillsbury

• Introduced New Teddy Bears and Dinosaurs
• Advertising Newspaper and TV ads
• Sales Promotions Free Samples
• Personal Selling Sales force to wholesalers and
  retailers

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The Functions of Promotion

• Increase sales and market share
• Stabalize sales
• Insulate brand from attack

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The Functions of Promotion
Price
D1
Quantity
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The Functions of Promotion
Price
1. Increase demand
D1
D2
Quantity
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The Functions of Promotion
Price
1. Increase demand
2. Decrease elasticity
D2
D1
Quantity
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Promotion as Communication
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Communications Objectives Should Drive Strategy

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A Clear Position Strategyis Critical

• 7 Up
• Crisp, clean, and no caffeine vs.
• Its an up thing
• Burger King
• Have it your way vs.
• Upscale dining

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Setting Communications Objectives

• What is the desired position?
• Who is the target?
• What is the desired image?
• What are the key PODs?

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Prestige
Porsche
Lincoln
1
3
Cadillac
BMW
Mercedes
2
Chrysler
Buick
Pontiac
Conservative
Sporty
Oldsmobile
Chevrolet
Datsun
4
Ford
Dodge
Toyota
5
Plymouth
VW
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Setting Communications Objectives

• What is the desired outcome?
• Based on Effects Hierarchies
• DAGMAR (advertising model)
• AIDA (personal selling model)
• Adoption Process Model

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The Adoption Process Model

• Awareness
• Interest
• Evaluation and Trial
• Decision
• Confirmation

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GMs Hierarchy

• Not Aware
• Aware
• Buying Class
• Consideration Class
• First Choice

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GMs Hierarchy
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Hierarchy Drives...

• Objectives
• Move X from level 1 to level 2
• Maintain share at level 5
• Effectiveness Measures
• DAR
• Ad Brand Perceptions
• Sales Purchase Intentions
• Promotion Strategy

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Objectives Based on Hierarchy

• Exposure
• Awareness/Interest
• Affect
• Purchase Intentions
• Actual Purchases
• Repeat Purchases

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Measuring Promotional Effectiveness

• Readership - Reach Frequency
• Recall - Aided Unaided
• Sales Inquiries
• Brand Perceptions Attitudes
• Purchase Intention
• Actual/Repeat Purchases

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Basic Promotional Strategies

• Target Sell through channel middlemen
• Tactics Allowances, discounts and personal
  selling
• Examples

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Basic Promotional Strategies

• Target Sell to ultimate customers, who demand
  retailers to stock
• Tactics Advertising and sales promotions
• Examples

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The Push is On

• Consumer products companies getting pushy
• Decrease in consumer A P
• Increase in personal selling and trade-based A
  P
• trade allowances
• displays
• cooperative advertising

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The Push is On

• Why the trend?
• Increased cost of national advertising
• Increased product parity and price competition
• Increased retailer power and competition for
  shelf space

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(No Transcript)
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Good Salespeople Possess
People Skills
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The Importance of Personal Selling

• Over 15M employed in sales
• 60 marketing grads 1st job
• Dominates promotion mix of many firms
• 1-3 Advertising
• 10-15 Personal Selling

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The Importance of Salespeople

• Generate sales
• Develop and maintain customer relationships
• Gather market intelligence
• Competitors/Customers/Conditions

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Who Gets Sold?

• Industrial Purchasing Agents
• Mercedes Benz, DCH
• Wholesalers
• Malone Hyde
• Retailers
• Parisian, Brunos, Sears, Wal-Mart
• Final Consumers

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Final Customers

• State Farm Insurance
• Tuscaloosa Toyota
• Estee Lauder
• Cellular One

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Buyer Expectations

• Orchestrate events to satisfy needs
• Knowledge of product, market, needs
• Problem solving proficiency/creativity
• Honest and ethical behavior
• Act as customers advocate in firm
• Well-prepared for sales calls

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SellingEnvironments

• Field Selling
• Retail Selling
• Telemarketing

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Sales Tasks

• Order Getters
• Order Takers
• Supporting Sales

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Territorial Exclusive Territory to Sell the
Companys Full Product Line
Sales Force Structures
Product Sales Force Sells Only a Portion of The
Companys Products or Lines
Customer Sales Force Sells Only to
Certain Customers or Industries
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FIGURE 20-2 How outside order-getting
salespeople spend their time each week
Slide 20-16
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FIGURE 20-C Stages in the personal selling
process
Slide 20-23
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• ADVERTISING

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Advertising

• Paid Unlike publicity (which is free but
  message less under cos control)
• Nonpersonal Unlike personal selling
• Low cost per contact Unlike personal selling
  (350 per contact)
• Message flexibility Varies but often lower than
  personal selling

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Advertising

• Overall costs often very high
• Varies by media
• National TV especially high
• U.S. Spending Roughly 245B (vs. 288B on sales
  promotions)
• PG will spend 50-150 Million per year
  depending on brand

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The Industry

• In-House Departments
• Ad Agencies
• WPP Group (London)
• Omnicom Group NYC
• DoubleClick.com
• Media

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Advertising Objectives

• Increase Brand Recognition and Acceptance
• Maintain or Improve Brand Position
• Beliefs Attitude
• Image Personality
• PODs
• Complement Other Promotions
• Improve sales and market share

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Ads That Move Brands Through the Hierarchy

• Awareness (and DAR)
• Interest
• Evaluation and Trial
• Decision
• Confirmation

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AdvertisingStrategy
Message Media Appeals
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Ad Message

• _____ do we want to say?
• Based on communications objectives
• Based on desired position
• Benefits Attributes
• Feelings Emotions
• Image Personality

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Ad Media

• _____ are we going to put our message?
• Numerous Media
• Media Mix Important
• Media itself can convey meaning/image

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FIGURE 19-2 U.S. advertising expenditures, by
category (in millions of dollars)
Slide 19-44
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PG Spending on Various Media

• Broadcast
• TV and Cable 1.8B
• Radio 37M
• Print
• Newspaper and magazine 662M
• Outdoor (very little)
• Online (???)

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MediaCharacteristics

• Cost
• Total
• Cost per contact
• Cost per target contact

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Media Costs

• Cost per thousand (CPM)
• Newspaper (300,000 subscription)
• 5000 per full page ad
• CPM 5000 / 300,000/1000
• CPM 5000 / 300
• CPM 16.67
• Cost per contact 1.7 cents
• (personal sales per contact 350)

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Media Costs

• TV
• Total cost high
• Cost per contact low

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TV Costs for 30-Second Spots
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Media Costs

• Radio
• Total cost moderate
• Cost per contact low
• Newspaper
• Total cost may be high
• Cost per contact low

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Cost

• Magazines
• Total costs may be high
• Cost per targeted contact low
• Direct Mail
• Total cost moderate
• Cost per contact relatively high

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Costs of Interactive

• Interactive (banners, etc.)
• Total cost moderate to high
• Cost per contact low
• Now CPMs .

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It Isnt Cheap
Costs of Interactive

• A small site (25 pages) can cost 200,000 if an
  in-demand design firm does the work.
• Larger sites (100s of pages) can easily cost more
  than 1 million.
• Designers / programmers charge 25 - 300 per
  hour
• Flash animators charge 150 - 250 /hr
• Marketing News, 2-12-01

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Who Pays?

• Manufacturer Consumer Trade Advertising
• Wholesalers Trade Advertising
• Retailers Consumer Advertising
• Often local newspaper and radio
• Cooperative Advertising

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Media Characteristics

• Reach and Frequency
• Reach _______ over 4 week period
• Frequency ______ avg person exposed
• Gross Rating Points Reach x Frequency
• Example
• Reach 20M
• Frequency 6
• GRP

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The Importance of Reach Frequency

• Reach frequency build awareness
• Greater frequency
• Increases opportunity to process ad
• Increases likelihood of recall
• Helps fight competitive clutter
• -

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Media Characteristics

• Audience Control
• Ability to control rate and focus of exposure
• High Print and Interactive
• Low

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Media Characteristics

• Flexibility Timeliness
• Ability to change quickly
• Short lead times for media ordering
• Higher Interactive, Direct Mail
• Moderate Newspaper, Radio
• Lower

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Media Characteristics

• Selectivity
• Ability to reach specific target markets with
  precision
• Higher
• Moderate TV, Radio, Interactive
• Lower Billboards

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On-line Advertising and Promotion
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On-line Marketing

• Some of the Options
• Web site
• E-mail (opt-in feature)
• Banner ads
• Interstitials
• Chat rooms

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Bottom Line on Usage

• U.S. penetration is around 68
• Emerging trends
• Increase in older users
• But differential focus
• Older consumers on financials
• Younger consumers on games, chatrooms, etc.
• Increase in female users (spending more than
  men)
• Increase in lower SES users
• Targeted sites and behavioral targeting within
  sites

Pew Research (2005)
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Spending TrendsInternet Buyers Age 14 in US

• 2000 564
• 2002 621
• 2005 - 928 (projected)

eMarketer Daily (2003)
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On-line Marketing

• Some Benefits
• Interactivity (two-way communication)
• 1-to-1 communication
• Active media
• Cost-effective adaptivity
• Real-time adaptivity
• Information access (and price competition)
• Convenience
• Costs

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On-line Marketing Challenges

• Getting Consumers to your site
• Billions of web pages (CLUTTER!)
• Search engines critical
• Behavioral targeting
• Integrated media

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On-line Marketing Challenges

• 2. Converting Browsers to Buyers
• 4 left for every 1 spent
• Shipping costs (Amazon Prime)
• Complicated checkout
• Security concerns
• Lack of touch

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On-line Marketing Challenges

• 3.Security concerns
• Number 1 consumer concern
• Privacy policies
• Secure payment mechanisms

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On-line Marketing Challenges

• 4.Dual (or Hybrid) Channels
• Competing vs. complementary?
• Barnes and Noble and In-Store Kiosks
• High levels of multi-channel shopping
• Retailers adapt

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On-line Marketing Challenges

• 5.Keeping customers at our site
• 83 percent of surfers have left site due to
  frustration (The Industry Standard)
• Causes difficult navigation, slow download, too
  many clicks to find information
• Need for concern regarding online atmospherics

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Keeping customers at site

• Elements of _____
• Clear path to goals (e.g., links to information)
• Immediate feedback
• Minimal distractions
• Balance challenge and skills (not too hard, not
  too easy)
• Outcomes of _____
• Time distortion
• Activity becomes autotelic

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AdvertisingStrategy
Message Media Appeals
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Ad Appeals

• _____ will we convey our message?
• Warning Dont let appeal cloud message
• Make brand and message the focal points

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Ad Appeals

• Informational vs. Emotional
• Fear/Humor/Sex
• Endorsers Testimonials
• Reminder vs. Differentiation
• Comparative
• One-sided vs. Two-sided

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Fear

• Physical/Emotional/Psychological
• Requirements
• Threat likely
• Consequence severe
• Action (brand purchase) decreases likelihood
• Action is possible

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Fear Appeals
Effectiveness
Level of Fear
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Two-sided Ads(vs. One-sided)

• Admit a weakness - Unexpected
• Increase trust/acceptance of ad
• Warning Avoid critical features if possible
• Example A H Baking Soda Toothpaste
• Testimonial At first I really didnt like the
  taste

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Comparative Ads

• Illegal until 1970 (in U.S.)
• Direct vs. Indirect
• Problems
• Ad exposure for competitors
• Market leader looks defensive
• Confusion of who sponsored ad
• Litigation over false advertising

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Direct Comparative
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Advertisers Dilemna
I know half the money I spend on advertising is
wasted. I just dont know which half.
John Wanamaker
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Sales Promotion

• Short term promotions to encourage purchase
• Results easily tracked
• Point-of-Purchase
• Samples, Coupons, Premiums
• Contests
• Trading Stamps
• Specialties

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Sales PromotionsAimed at Consumers

• Contests
• Coupons
• Aisle Displays
• POP Displays
• Samples
• Sponsored Events

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The Importance of Sales Promotions

• Coupons and Samples Risk Reduction and Trial
• POPs Unplanned purchases and impulse buying

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Sales Promotions Dilemna

• Measurable results
• Immediate results
• - Expensive to administer
• -
• -
• -