Promotional Planning BA 315 C 10-13 Session

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Promotional PlanningBA 315 C 10-13Session

• Lindell Phillip Chew
• University of Missouri- St. Louis, College of
  Business Administration

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DEFINITION

• Promotion is a persuasive communications mix. It
  is a deliberate
• attempt to communicate information which
  presents a company and its
• products to prospective customers in a manner
  persuasive enough to
• induce the kind of acceptance, reaction, or
  response desired.
• THIS IS A CONTROLLED AND INTEGRATED PROGRAM
  OF COMMUNICATION METHODS AND MATERIALS.

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• THE PROMOTIONAL (COMMUNICATIONS) PLANNING
  PROCESS LPC1_at_UMSL.EDU

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FUNCTIONS

• The basic purpose of promotion is to present a
  business and its products and services to
  prospective customers, to communicate the
• need/want satisfying attributes of those
  products/services, to facilitate sales, and to
  contribute positively to the long ran performance
  of the business.
• HOW TO SELL PRESENT CUSTOMERS ADD1T1ONAL UNITS.
• GET NON CUSTOMERS TO BECOME CUSTOMERS.

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FIRST REVIEW YOUR MARKETING PLAN ITS OBJECTIVE
AND THEN PURSUE THE STEPS of the PROMOTIONAL
(COMMUNICATIONS) PLANNING PROCESS

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Our corporate objective is to increase earnings
per share from 6.71 per share to 7.71 per share

• OUR MARKETING OBJECTIVE IS TO INCREASE MARKET
  SHARE FROM 23 TO 25, ALSO IN ONE YEAR

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STEPS SITUATIONAL ANALYSISESTABLISHING
PROM0TIONAL OBJECTIVES JUSTIFICATONS DETERMIN
ING BUDGET PLANNING, MANAGING, BLENDING
THE COMMUNICATIONS EVALUATION MEASURING
EFFECTIVENESS FOLLOW ON AND FUTURE
PLANNING

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STEPS SITUATIONAL ANALYSISMARKET TARGETS
DEFINITION Current Market Additional or
Potential Customer FranchisesCOMPETITION
ENVIRONMENTAL FACTORS Internal (policies,
profit inhibitors, financial and personnel
resources) External (legal/ethical,
business/economic conditions,cultural/social)

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STEPS SITUATIONAL ANALYSISCRITICAL
QUESTIONS Are you familiar with the strengths
weaknesses of various promotional efforts? Is
outside technical/financial assistance available
to enhance promotional efforts?

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TYPES OF PROMOTION

• (EXPLICIT TOOLS)

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TYPES OF PROMOTION (EXPLICIT TOOLS)

• ADVERTISING
• PERSONAL SELLING
• SALES PROMOTION
• PUBLIC RELATIONS / PUBLICITY

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The Marketing Communications Mix
Advertising
Personal Selling
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TYPES OF PROMOTION (EXPLICIT TOOLS)

• PLEASE NOTE THAT RESELLER SUPPORT OBJECTIVES AND
  PROGRAMS MAY ALSO BE ADDED
• PURPOSE TO..
• IMPROVE
• SUPPLEMENT
• CONTROL
• PERFORMANCE

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TYPES OF PROMOTION (EXPLICIT TOOLS)

• ADVERTISING paid, nonpersonal communication
  regarding goods, services, organizations, people,
  places, and ideas that is transmitted through
  various media by business firms, government and
  other nonprofit organizations, and individuals
  who are identified in the advertising message as
  the sponsor.

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TYPES OF PROMOTION (EXPLICIT TOOLS)

• PERSONAL SELLING
• involves oral communication with one or more
  prospective buyers by paid representatives for
  the purpose of making sales.

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TYPES OF PROMOTION (EXPLICIT TOOLS)

• SALES PROMOTION
• Involvespaid.marketing communication activities
• (other than advertising, publicity, or personal
  selling) that are intended to stimulate consumer
  purchases and dealer effectiveness.

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TYPES OF PROMOTION (EXPLICIT TOOLS)

• PUBLIC RELATIONS / PUBLICITY
• . Publicity is nonpersonal public relations that
  is transmitted Public relations includes any
  communication to foster a favorable image for
  goods, services, organizations, people, places,
  and ideas. It may be personal or nonpersonal,
  paid or nonpaid, and sponsor controlled or not
  controlled through media but not paid for by an
  identified sponsor.

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TYPES OF PROMOTION (EXPLICIT TOOLS)NOW LETS
PURSUE THE OTHER STEPS
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Elements in the Communication Process
SENDER (source)
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Decide on Explicit Communications Mix
Advertising Public, Pervasive, Expressive,
Impersonal
Sales Promotion Communication, Incentive,
Invitation
Public Relations Publicity Credibility,
Surprise, Dramatization
Personal Selling Personal Confrontation,
Cultivation, Response
Direct Marketing Nonpublic, Customized,
Up-to-Date, Interactive
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Factors in Developing Promotion Mix Strategies
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Push Versus Pull Strategy
Producer
Push Strategy
Producer
Pull Strategy
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PROMOTION PLANNING STEP OBJECTIVE
SETTING

• The objectives of promotion may be categorized as
  stimulating demand and enhancing company image.
• The sequential short-term, intermediate, and
  long-term promotion goals for a firm to pursue.
• Primary demand is an objective when seeking
  consumer interest for a product category.
• Selective demand is a later objective that seeks
  consumer interest for a particular brand of a
  product.

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PROMOTION PLANNING STEP BUDGETING

• USE OBJECTIVE TASK
• Under the objective-and-task method, a firm sets
  promotion goals, determines the activities needed
  to satisfy them, and then establishes the proper
  budget. Most large companies use some form of
  objective-and-task technique.
• During promotional budgeting, a firm should
  keep the concept of the marginal return in mind.
  This is the amount of sales each increment of
  promotion spending will generate. It is usually
  highest for
• new products.

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Step 5. Establish the Budget
Affordable
Of Sales
Competitive Parity
Objective Task
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PROMOTION PLANNING STEP PLANNING,
MANAGING, BLENDING THE COMMUNICATIONS

• THE PROMOTION MIX

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PROMOTION PLANNING STEP PLANNING,
MANAGING, BLENDING THE COMMUNICATIONSSELECTING
MEDIA

• Media are selected on the basis of these
  criteria
• Advertising media costs.
• Reach
• Frequency.
• Gross Rating Points
• Waste
• Message permanence.
• Persuasive impact
• Clutter
• Lead time

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PROMOTION PLANNING STEP PLANNING,
MANAGING, BLENDING THE COMMUNICATIONSSELECTING
MEDIA

• Advertising media costs
• Outlays for media time and space.
• Total costs are computed first.
• Per-reader or viewer costs are computed second.

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PROMOTION PLANNING STEP PLANNING,
MANAGING, BLENDING THE COMMUNICATIONSSELECTING
MEDIA

• Reachthe number of viewers, readers, or
  listeners in an audience.
• . For TV and radio, reach is the total number of
  people who are exposed to an ad.
• . For print media, reach has two components
  circulation (the number of copies sold or
  distributed) and passalong rate (the number of
  times each copy is read by another reader).

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PROMOTION PLANNING STEP PLANNING,
MANAGING, BLENDING THE COMMUNICATIONSSELECTING
MEDIA

• Wastethe part of an audience not in a firms
  target market.
• Narrowcasting, which presents messages to limited
  and well-defined audiences, can reduce audience
  waste.

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PROMOTION PLANNING STEP PLANNING,
MANAGING, BLENDING THE COMMUNICATIONSSELECTING
MEDIA

• Frequencyhow often a medium can be used.
• Repetition, repetition, repetition
• James Smith 1890s

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PROMOTION PLANNING STEP PLANNING,
MANAGING, BLENDING THE COMMUNICATIONSSELECTING
MEDIA

• GROSS RATING POINTS (GRPS)
• GRPS REACH X FREQUENCY

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PROMOTION PLANNING STEP PLANNING,
MANAGING, BLENDING THE COMMUNICATIONSSELECTING
MEDIA

• Message permanencethe number of exposures one ad
  generates and how long it remains available to
  the audience.
• Persuasive impactthe ability of a medium to
  stimulate consumers.

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PROMOTION PLANNING STEP PLANNING,
MANAGING, BLENDING THE COMMUNICATIONSSELECTING
MEDIA

• Clutterthe number of ads found in a single
  program, issue, etc. of a medium.
• Lead timethe period required by a medium for
  placing an ad.

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PROMOTION PLANNING STEP PLANNING,
MANAGING, BLENDING THE COMMUNICATIONSSELECTING
MEDIA

• In recent years, there have been many media
  innovations, such as online computer services,
  regional editions, special one-sponsor issues,
  specialized Yellow Pages, TV ads in supermarkets,
  infomercials, etc.

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PROMOTION PLANNING STEP PLANNING,
MANAGING, BLENDING THE COMMUNICATIONSSELECTING
MEDIA

• As of 2004, the typical U.S. consumer will have
  access to 44 local radio stations, 200 TV
  channels, 2,400 Internet radio stations, 18,000
  magazine titles, and 20 million Internet sites.

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PROMOTION PLANNING STEP THE
PROMOTION MIX

• The promotion mix is a firms overall and
  specific communication program, including its use
  of advertising, public relations (publicity),
  personal selling, and/or sales promotion.
• With an integrated marketing communications
  program, each type of promotion has a distinct
  function and complements the other types.

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PROMOTION PLANNING STEP THE
PROMOTION MIX

• The promotion mix is a firms overall and
  specific communication program,
• A promotion mix varies by type of company, the
  product life cycle, access to media, and channel
  member support.

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PROMOTION PLANNING STEP THE
PROMOTION MIX

• ADVERTISING
• PERSONAL SELLING
• SALES PROMOTION
• PUBLIC RELATIONS / PUBLICITY
• RESELLER SUPPORT PROGRAMS

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CONSIDERING COOPERATIVE EFFORTS

• With cooperative advertising, two or more firms
  share some advertising costs.
• 1. A vertical cooperative ad is an advertising
  agreement between firms at different levels of
  the distribution channel.
• 2. A horizontal cooperative ad is an advertising
  agreement among independent firms at the same
  stage.
• 3. Good agreements clearly state each partys
  costs, functions, and responsibilities the ads
  covered and the basis for termination.We will
  apply SCHNUCKS to both.

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PROMOTION PLANNING STEP BUDGET

• A budget delineates expenditures by explicit tool
  and medium
• Considerations in budgeting may include
  alternative media costs, the number of placements
  needed, cost increases of media, the status of
  the economy, channel member tasks, production
  costs, and budget allocation for domestic versus
  international ads.

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PROMOTION PLANNING STEPEVALUATION
MEASURING EFFECTIVENESS

• EVALUATING
• SUCCESS OR FAILURE
• COMMUNICATION (PROMOTIONAL) success or failure
  depends on how well the company achieves
  promotion objectives, which may range from
  creating awareness to expanding sales. Example R
  x F GRPs

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PROMOTION PLANNING STEPFOLLOW ON
FUTURE PLANNING

• FEEDBACK ADJUST

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Summarize Promotional PlanningSession

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Summarize STEPS SITUATIONAL
ANALYSISESTABLISHING PROM0TIONAL OBJECTIVES
JUSTIFICATONS

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Summarize STEPS DETERMINING
BUDGET PLANNING, MANAGING, BLENDING
THE COMMUNICATIONS

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Summarize STEPS EVALUATION MEASURING
EFFECTIVENESS FOLLOW ON AND FUTURE
PLANNING

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Next Steps

• OPPORTUNITY IS NOW HERE!
• JUST DO IT!!!!!!
• LPC1_at_umsl.edu

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Promotional PlanningSession

• Lindell Phillip Chew
• University of Missouri- St. Louis, College of
  Business Administration