Marketing Essentials

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Marketing Essentials
n Chapter 17 Promotional Concepts and Strategies
Section 17.1 The Promotional Mix
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SECTION 17.1
The Promotional Mix
What You'll Learn

• The role of promotion in marketing
• The concept of promotional mix
• The characteristics of personal selling and
  advertising
• The nature and scope of publicity

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SECTION 17.1
The Promotional Mix
Why It's Important
Since businesses must continually promote their
organizations, products, and policies to gain
customer acceptance, you will need to learn
successful promotional strategies.
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SECTION 17.1
The Promotional Mix
Key Terms

• promotion
• promotional mix
• product promotion
• institutional promotion
• advertising

• sales promotion
• public relations
• publicity
• push policy
• pull policy

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SECTION 17.1
The Promotional Mix
The Concept of the Promotional Mix
Promotion is any form of communication a business
or organization uses to inform, persuade, or
remind people about its products. Promotional
mix is a combination of the different types of
promotion. A business decides on the promotional
mix that will be most effective in persuading
potential customers to purchase its products.
Slide 1 of 2
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SECTION 17.1
The Promotional Mix
The Concept of the Promotional Mix
A business uses product promotion to convince
potential customers to buy its products instead
of buying from a competitor. Institutional
promotion is used by businesses to create a
favorable image for themselves, as opposed to
promoting specific products or services.
Slide 2 of 2
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SECTION 17.1
The Promotional Mix
Types of Promotion

• There are four basic types of promotion
• personal selling
• advertising
• sales promotion
• public relations

Slide 1 of 4
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SECTION 17.1
The Promotional Mix
Types of Promotion
Personal Selling is one of the largest forms of
promotion. It is designed to complete a sale once
a customer is attracted to a business. Advertising
is any paid form of nonpersonal presentation and
promotion of ideas, goods, or services by an
identified sponsor. American businesses spend
about 200 billion each year on advertising.
Slide 2 of 4
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SECTION 17.1
The Promotional Mix
Types of Promotion
Sales Promotion is everything besides personal
selling, advertising, and public relations that
is used to stimulate consumer purchasing and
sales effectiveness. Public Relations refers to
any activity designed to create a favorable image
of a business, its products, or its policies.
Slide 3 of 4
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SECTION 17.1
The Promotional Mix
Types of Promotion
Publicity is a specific kind of public relations
that involves placing positive newsworthy
information about a business in the media.
Publicity is much cheaper than advertising, and a
mention on the news is more likely to be regarded
as objective. On the other hand, companies cannot
control negative publicity.
Slide4 of 4
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SECTION 17.1
The Promotional Mix
Coordination of the Promotional Mix
Most businesses use more than one type of
promotion to achieve their promotional goals.
Each type of promotion is designed to complement
one another, and all must be coordinated.
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SECTION 17.1
The Promotional Mix
Promotional Budget
In large companies, the marketing department
establishes a promotion budget, allocates
resources, coordinates the campaign, and
determines the right promotional mix for the
company. In smaller businesses, these
responsibilities often rest with the
owner-operator, are divided among employees, or
contracted to outside agencies.
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SECTION 17.1
The Promotional Mix
The Push-Pull Concept
A push policy is used to convince a retailer to
stock the products being promoted, pushing the
product to the retailer. A push strategy relies
heavily on personal selling and promotion at
trade shows. A pull policy is designed to create
consumer interest, pulling consumers to the
product.
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ASSESSMENT
17.1
Reviewing Key Terms and Concepts
1. What is promotion? 2. Describe the concept
of promotional mix. 3. What is the difference
between product and institutional promotion? 4.
Why is personal selling the most expensive form
of promotion? 5. What is the difference between
publicity and advertising?
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ASSESSMENT
17.1
Thinking Critically
Some people think that advertising is a waste of
money that needlessly raises the prices of goods
and services. What do you think? Is the money
spent on advertising justified? Provide an
argument to support your position.
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17.1
Graphic Organizer
Elements of the Promotional Mix
The Promotional Mix
Personal Selling
Advertising
Sales Promotion
Public Relations
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Marketing Essentials
End of Section 17.1
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Marketing Essentials
n Chapter 17 Promotional Concepts and Strategies
Section 17.2 Sales Promotion
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SECTION 17.2
Sales Promotion
What You'll Learn

• The characteristics of sales promotion
• The concept of trade promotions
• The different kinds of consumer sales promotions

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SECTION 17.2
Sales Promotion
Why It's Important
To be successful, a business must continually
promote its products. This section introduces you
to the concept of sales promotion and the
techniques used to increase sales and to inform
customers about a companys products.
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SECTION 17.2
Sales Promotion
Key Terms

• slotting allowance
• sales incentives
• premiums
• incentives
• licensing
• promotional tie-ins

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SECTION 17.2
Sales Promotion
Sales Promotion
Sales promotion is a short-term incentive offered
to encourage buying a good or service. Sales
promotions can be directed toward manufacturers,
wholesalers, retailers, and consumers, as well as
a company's employees. Sales promotions are
usually supported by advertising activities.
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SECTION 17.2
Sales Promotion
Trade Promotions

• Trade promotions are sales promotion activities
  designed to gain manufacturers', wholesalers',
  and retailers' support for a product. More money
  is actually spent on promoting to businesses than
  to consumers. Major trade promotions include
• slotting allowances
• buying allowances
• trade shows and conventions
• sales incentives

Slide 1 of 3
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SECTION 17.2
Sales Promotion
Trade Promotions
Slotting allowances are cash premiums paid by the
manufacturer to a retail chain for the costs
involved in placing a new product on its
shelves. Buying allowances are price discounts
given by manufacturers to wholesalers and
retailers to encourage the purchase of a product.
Slide 2 of 3
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SECTION 17.2
Sales Promotion
Trade Promotions
Trade shows and conventions are events at which
businesses can introduce new products, encourage
increased sales of existing products, and gain
continued company and product support. Sales
incentives are awards given to managers and
employees who successfully meet or exceed sales
quotas.
Slide3 of 3
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SECTION 17.2
Sales Promotion
Consumer Sales Promotions

• Sales promotion efforts designed to encourage
  customers to buy a product are called consumer
  promotions. They include
• premiums
• incentives
• product samples
• loyalty marketing programs
• promotional tie-ins
• product placement
• visual merchandising and displays

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SECTION 17.2
Sales Promotion
Premiums

• Premiums are low-cost items given to consumers at
  a discount or for free. Some popular premiums
  are
• coupons
• factory packs
• traffic builders
• coupon plans

Slide 1 of 3
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SECTION 17.2
Sales Promotion
Premiums
Coupons are certificates that entitle customers
to cash discounts on goods or services. Factory
packs are free gifts placed in product packages.
These are common in cereal boxes.
Slide 2 of 3
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SECTION 17.2
Sales Promotion
Premiums
Traffic builders are low-cost premiums such as
pens or key chains given away free to consumers
for visiting a new store or attending an
event. Coupon plans are ongoing programs offering
a variety of premiums in exchange for labels,
coupons, or other tokens.
Slide 3 of 3
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SECTION 17.2
Sales Promotion
Incentives
Incentives generally are higher-priced products
earned and given through contests (games of
skill), sweepstakes (games of chance), and
rebates (discounts from manufacturers).
Businesses use incentives to promote many
products because they create customer excitement
and increase sales.
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SECTION 17.2
Sales Promotion
Product Samples
A product sample is a free trial size of a
product sent through the mail, distributed
door-to-door, or given away at retail stores and
trade shows. Detergents, toothpastes, shampoos,
deodorants, and colognes are frequently promoted
this way.
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SECTION 17.2
Sales Promotion
Promotional Tie-Ins
Promotional tie-ins involve coordinated sales
promotional arrangements between one or more
retailers or manufacturers.

• Example For the promotion of the Goofy movie,
  Disney Studios cooperated with McDonald's which
  made a special Happy Meal with a Fisher-Price
  Toddler Toy.

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SECTION 17.2
Sales Promotion
Loyalty Marketing Programs
Loyalty marketing programs, also called frequent
buyer programs, reward customers for making
multiple purchases. Loyalty marketing was
popularized in the 1980s by the airline industry,
which instituted frequent flier programs.
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SECTION 17.2
Sales Promotion
Product Placement
With product placement, an organization can
develop product recognition by making sure that a
product is featured in special events, on
television, or in the movies.

• Example Apple's iMac appeared in
  populartelevision shows when it was first
  introduced.

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SECTION 17.2
Sales Promotion
Visual Merchandising and Displays
Visual merchandising refers to the coordination
of all physical elements in a place of business
so that it projects the right image to its
customers. Displays refer to the visual and
artistic aspects of presenting a product to a
target group of customers.
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ASSESSMENT
17.2
Reviewing Key Terms and Concepts
1. Why do businesses use sales promotions? 2. What
unique characteristics do sales promotions
have? 3. What are trade promotions? 4. What are
consumer promotions? 5. Explain the difference
between a sweepstakes and a contest.
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ASSESSMENT
17.2
Thinking Critically
Why don't manufacturers who issue coupons simply
lower the price of their products to attract
customers? What is the value of coupons to such
businesses?
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Marketing Essentials
End of Section 17.2
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Marketing Essentials
n Chapter 17 Promotional Concepts and Strategies
Section 17.3 Public Relations
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SECTION 17.3
Public Relations
What You'll Learn

• The nature and scope of public relations
• The different audiences for public relations
• The duties of public relations specialists
• How to prepare a news release

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SECTION 17.3
Public Relations
Why It's Important
Public relations is image-building. A company is
concerned with how its employees, customers, and
the general public (including its stockholders)
view it. This section explains how the public
relations department of a company fosters
goodwill among the public.
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SECTION 17.3
Public Relations
Key Terms

• customer advisory boards
• consumer affairs specialists
• community relations
• news release
• press kit
• press conference

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SECTION 17.3
Public Relations
Customer Relations
Good communication between employees and
customers is vital in promoting a favorable
business image. Many businesses go beyond
courtesy to offer special services and amenities
such as on-site restaurants and child-care
facilities in order to maintain good customer
relations.
Slide 1 of 2
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SECTION 17.3
Public Relations
Customer Relations
Customer advisory boards are panels of consumers
who make suggestions about products and
businesses. National companies often employ
consumer affairs specialists to handle customer
complaints and to serve as consumer advocates
within the firm.
Slide 2 of 2
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SECTION 17.3
Public Relations
Employee Relations

• Successful businesses have loyal and
  well-motivated employees who feel they are
  important to the company. Some examples of
  programs for employees include providing
• Tuition reimbursement for college courses
• Newsletters for and about the company and its
  employees
• Recreational programs
• Employee recognition programs for improvements in
  performance and efficiency

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SECTION 17.3
Public Relations
Community Relations
Community relations refers to the activities that
a business uses to acquire or maintain the
respect of the community, such as participating
in and sponsoring activities that benefit the
community's civic, social, and cultural life.

• Example Sponsoring the Special Olympics, or
  providing mentors for students.

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SECTION 17.3
Public Relations
The Role of Public Relations Specialists
The principal task of a public relations
specialist is to publicize the good news about a
company and its productsand to control the
damage done by any negative news. Public
relations specialists work in the public and
private sector.
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SECTION 17.3
Public Relations
Writing News Releases
A news release is a prewritten story about a
company that is sent to the media containing
information about the companys employees,
stores, operations, products, corporate
philosophy, or participation in an event or
program.
Slide 1 of 2
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SECTION 17.3
Public Relations
Writing News Releases
A news release must contain newsworthy
information in order to be picked up by the
media. It should be properly formatted and answer
five basic questions who, what, where, when, and
why.
Slide 2 of 2
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SECTION 17.3
Public Relations
Other Public Relations Duties

• In addition to writing news releases, public
  relations specialists also perform these tasks
• Prepare annual reports, brochures, and responses
  to customer inquiries.
• Write feature articles for trade magazines.
• Develop press kits, which are folders containing
  articles, news releases, feature stories, and
  photographs. These are given to the media to
  assist in reporting.

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ASSESSMENT
17.3
Reviewing Key Terms and Concepts
1. Name three ways in which the goodwill
generated by public relations can benefit a
company. 2. What are customer advisory
boards? 3. What is meant by community
relations? 4. What is the primary task of public
relations specialists? 5. What are three reasons
why a company may call a press conference?
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ASSESSMENT
17.3
Thinking Critically
What is meant by this following statement? "To
the customer, the employees are the company."
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Marketing Essentials
End of Section 17.3