Purpose of Promotion The purpose of promotion is to tell customers about a companys goods services images or ideas and persuade them to buy or to form an opinion A company may have an outstanding product which is priced just right for the market but if customers dont know about th ID: 739877
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Slide1
4.01 4.02
Promotion“Spread the Word”Slide2
Purpose of Promotion
The purpose of promotion is to tell customers about a company’s goods, services, images, or ideas and persuade them to buy or to form an opinion
. A company may have an outstanding product which is priced just right for the market, but if customers don’t know about the product, no sales will be made.
Promotion, therefore,
consists of communication activities that inform potential customers about goods, services, images, or ideas to achieve a desired outcome.Slide3
Purpose of Promotion
Businesses use a variety of communication techniques to send
their promotional messages to customers. They communicate with customers through advertising, personal selling, publicity, and sales promotion.Slide4
Promotional Mix
Mars uses a number of
different methods—
and spokes-candies—
to promote M&M’s.
The specific combination, or blend, of marketing communication channels that a business uses to send its messages to customers is known as the
promotional mix. Each business’s promotional
mix is unique, based on a specific set of circumstances and product.Slide5
Promotional Mix
A local restaurant, for example, might decide that a
combination of
newspaper advertising, coupons, and radio commercials is
the best promotional mix for it to use. A Fortune-500 company, on the other hand, may choose to promote its products via Facebook, national television commercials, magazine advertisements, and
a NASCAR
racing team sponsorship.
Regardless of the exact blend of
the
promotional mix, the goal is always the same—to
communicate effectively
with customers.Slide6
Out of Home Media
An electrical sign located in a high-traffic area is an effective out-of-home media. Out-of-home media also include billboards, painted bulletins, blimps, and hot-air balloons. Slide7
Find the Right Blend
Successful marketers carefully blend the elements of the promotional mix for the best possible results. The promotional mix elements are: advertising, personal selling, publicity, and sales promotion.Slide8
Advertising
The most visible element of the promotional mix is advertising—any paid form of
non-personal
presentation of ideas
, images, goods, or services. Advertising helps customers to “put a face with a name,” no matter whether it’s a product, a company, an organization, or an idea.
Businesses
often use advertising to encourage short-term sales, build product awareness, and develop
a brand
image. Slide9
Advertising
Advertising works best when:
Product awareness is low (new product)
Product features are not obvious to consumers
Product needs to be differentiated from those of the competition
Discretionary incomes are high (consumers’ $$$)
Overall industry sales are risingSlide10
Advertising
Advertising has several advantages.
I
t
can reach a large audience in a broad geographic area, and since many people receive the same message, the per contact cost of advertising is low. Unfortunately
, many of these same individuals tune the ads out, due to
the info.
overload
prevalent
in today’s society. Even if they do pay attention to
ads,
they may need
to see an ad
7 times or more
before it takes on
meaning. To top it off, advertising is typically
NOT
good for delivering complicated messages.Slide11
Advertising
Advertising can be delivered to consumers through a variety of mass media. Examples include: television and radio commercials
print ads in newspapers and magazines
out-of-home ads such as billboards and car wraps
catalogs, direct mail, product placement, banner ads, paid listings, search engine listings, pay-per-click links, and email.Slide12
Advertising - Stereotypes
A television commercial depicts a woman mopping the kitchen with a new floor cleaner. A stereotype is a set image or an assumption about a person or thing. Until recent decades, many people associated homemaking or house cleaning as a female's primary responsibility. However, it is not generally true today. With more women in the workforce, household and child care (e.g., a man pouring orange juice for children), responsibilities are often shared with males.
Many males now have successful careers as chefs.
An
ad campaign that presents a variety of people suggests
all
types of people drink milk. Therefore, the print ads aren't engaging in stereotyping. Using a well-known athlete to promote continuing education does
not
necessarily promote stereotypes.Slide13
Personal Selling
Personal selling is
the form of promotion that determines client
needs/wants
and responds through planned, personalized communication that influences purchase decisions and enhances future business opportunities.
At its core,
personal selling is all about
building relationships
with customers
. It’s only natural that
the starting
point for personal selling is determining
client needs
and wants. By starting with the customer in mind
, salespeople
can provide the goods or services that
will best
satisfy that person and gain repeat business.Slide14
Personal Selling
Selling is personalized communication, which means it involves interaction between the customer and the salesperson. This interaction can take place face-to-face, by telephone, or by email. Regardless of the means of communication, personal selling is designed to influence purchase decisions—in other words, to make a sale. However, it should not be a strong arm tactic or simply an attempt by the salesperson to “make a buck.”Slide15
Personal Selling
On a per contact basis, personal selling can be
the most expensive
form of promotion
. However, the advantages that it has over advertising usually make it worth the cost. These advantages include immediate feedback and flexibility. By watching or listening to a client’s reactions to a sales presentation, the salesperson can learn
what the individual likes or dislikes about a product.
As
a result, the salesperson can tailor
the presentation
to appeal to the particular individual. Another benefit of personal selling is
many customers
view it as being more credible than advertising.
It’s no
surprise that
personal
selling is the most effective form of promotion.Slide16
Personal Selling
Products sold to industrial users are usually complex, technical, expensive, and require demonstration. Because of these characteristics, personal selling should be emphasized. Sales promotion, publicity, and advertising could be used to support personal selling.Slide17
Personal selling is ideal for delivering complicated messages and explaining highly specialized technical products.Slide18
Publicity
Publicity is an identity-building tactic defined as any
non-personal
presentation of ideas
, goods, or services that is NOT PAID FOR by the company/individual that benefits from or is harmed by it.
There is little or no direct interaction between
customers and
the company when the promotional message is received.
Because
publicity is
often distributed
via
3
rd
party sources
such as the news media, businesses have
little control
over the
message
presented to customers, the timing of that message, the location in which
the customers
receive the message, etc
.Slide19
Publicity
Due to the fact that businesses have little control over these messages, and
also because
the company does not pay to have its message delivered, customers typically
consider the information gained through publicity to be more credible. They pay close attention to publicity and view it as news.
Publicity
can
be used
to build goodwill toward a company, as well as develop a positive image of the business.Slide20
Publicity
Publicity comes in many forms. For instance, favorable press releases and news stories can help to promote a new product. By appearing on a TV talk show, an actor or director can publicize her/his new movie.
Mention of a company’s charitable activities or sponsorships in print or broadcast media can help build good feelings toward the business.Slide21
Publicity
Online publicity – both positive and negative—can
take the shape of testimonials from actual customers on the company web site, blog entries across the Web,
company-written white
papers, conversations on social media sites, and customer ratings of and/or comments about the company’s products on independent web sites.
The
Internet is an integral part of many people’s lives, so publicity about a product or company online can
have a
real impact on customers’ actions.Slide22
Company News Release – Publicity
Publicity is a non-personal form of promotion that is not paid for by the company or individual that receives it.
A news release would be prepared by the company but
presented at the publisher's expense.
Direct mail, a billboard, and a company TV commercial are examples of advertising – NOT free publicity.Slide23
Mass Media
Mass media reach a lot of people at the same time. Included are print, broadcast, direct mail, out-of-home, and other media. It can literally reach people around the world at one time.
Mass media are also capable of reaching a specific audience, meeting the needs of many businesses, and presenting large amounts of promotion, but it is their ability to reach masses of people that is responsible for their name.Slide24
Sales Promotion
Have you ever:Seen a window display?Used a coupon at a store?
Watched a product demonstration?
Received an instant rebate?
Sampled food products at a grocery store?Slide25
Sales Promotion
If so, you are familiar with sales promotion:
promotional activities
other than advertising, personal selling, and
publicity that stimulate customer purchases. Billions of
$$$$s a year
are spent on sales promotion activities, including
visual merchandising (displays), coupons, in store demonstrations,
cash discounts and price incentives, product samples
, contests
, introductory offers, and free accessories
.Slide26
Sales Promotion
Sales promotions
can target either intermediaries
or ultimate
consumers. Regardless of the target market, sales promotions have their advantages. They are measurable, have a low cost per exposure, attract new customers, generate excitement, encourage quick responses, provide added value, and boost repeat purchases.
Sales promotions help to sell old stock, and adding a free sample of a new product to
an existing
product in decline may help to extend the declining product’s life cycle.Slide27
Sales promotions offered to intermediaries (middlemen) include merchandising allowances, sales contests, trade shows, exhibitions, and dealer incentives.
During McDonald’s Monopoly sales promotion, sales often jump at least 5%.Slide28
Sales Promotions
On the other hand, sales promotions are very short-term in nature, and
NOT GOOD
for delivering complicated
messages. Also, they can cheapen a company’s image. Businesses must be careful when using sales promotions because they don’t want customers
to develop
a “no bonus, no buy” attitude.Slide29
Promotional Mix
The promotional mix – made up of advertising, personal selling, publicity and sales promotion plays a key role in obtaining customers. An appropriate blend of the promotional elements enables businesses to effectively communicate with consumers.
It increases brand recognition, raises product awareness, and communicates product benefits. By delivering messages in multiple ways, using multiple promotional mix elements, a business is more likely to reach its target market than it would using one form of promotion alone.
The right promotional mix drives sales and ultimately helps the company reach its marketing objectives and goals.Slide30
Promotional Mix
By playing follow the leader - competing businesses within the same industry usually use quite similar promotional mixes because many of the factors affecting the promotional mix are the same for those businesses.
Businesses also use the same promotional activities to prevent losing customers to competitors.
Reducing the promotional budget or trying not to outdo the competition would make the business less competitive
.Slide31
Social Status
You can increase your social status by purchasing this product. Materialism is an emphasis on, or preoccupation with, attaining things or certain positions—the right clothes, car, job, or social status.
Some critics believe that advertisements reinforce a materialistic attitude in today's society—defining a person's value in society by his/her possessions. Slide32
Comparison Ad
For example, an ad for a designer product might imply you will achieve a certain social status/acceptance if you buy the product. An ad claiming a product has a higher government rating than a
competitor's
product is an example of a
comparison adSlide33
Ads – Social Responsibility
An advertisement stating that a handmade product is constructed of organic materials is an example of an ad that reinforces the concept of
social responsibility.
A business usually would
NOT place an advertisement for the sole purpose of directing consumers to its web site.Slide34
Individualized Messages
The new information technology that includes computerized databases allows businesses to create individualized promotional messages. Businesses can collect a variety of information about customers, enter that information into a database, and use the computer to sort the data. Slide35
New Technology & Promotion
For example, a business might track customers according to their preferences for products and then generate mailing lists and individualized messages that promote specific products to specific customers.
Businesses created commercials, premiums, and publicity campaigns before the new technology was developed; however, new technology makes some of these activities easier to perform.Slide36
Customized Messages
Information can be communicated by more venues, and messages can be customized. Because there are more people who are using personal computers, new computer software programs are being developed to help businesses of all sizes to personalize promotional messages.
Personalized messages can be developed for specific target market members and can be communicated through traditional direct mail or Internet (e.g., electronic mail, web sites) channels. Slide37
Technology and Promotion
Although technological advancements often help companies become more productive and cost-efficient, it does
NOT
necessarily mean the businesses have additional funds to spend on promotional activities.
Although computer advancements have helped accelerate the time to develop promotional campaigns, it does NOT necessarily affect creativity. The number of channels needed to carry out promotional plans is highly dependent on the type of promotional activity.Slide38
Advertising Principles & Practice
Children are impressionable, and the wrong kinds of advertising can affect their development. This was one of the most controversial issues of the 1970s.
Children were watching hours of TV each day, and some people believed advertisers were taking advantage of the fact children are impressionable and often unable to evaluate advertising messages and make responsible purchase decisions. Slide39
Advertising Principles & Practice
So, legislation was passed and the Better Business Bureau, among others, published guidelines geared specifically to advertisers who target children in their communication.
Parents were among those who raised issues about advertising to children but
NOT
primarily because their children were asking for the products they saw on television. Slide40
Advertising Principles & Practice
Research has shown that children exposed to a lot of advertising do behave differently, but there is no known research linking juvenile offenders with watching television advertising.Slide41
Laws Governing Promotion
A business must understand the laws governing promotional activities vary by country. Some countries have strict promotional laws that marketers must follow, while other countries' laws are lenient.
A business that breaks a promotional law may have to pay government fines, which is costly to the business. Slide42
Laws Governing Promotion
Therefore, it is important for marketers to understand which promotional activities are, and are not, permissible in the countries where they sell and promote products. In some countries, industry and consumer groups influence how the governments regulate promotion. Some, rather than most, countries have a system of checks and balances to verify that promotion regulations are fair.Slide43
External Factors Affecting Promotion
Government
regulations, such as the one prohibiting radio and television cigarette advertising, are part of the
external
factors that affect promotion. Slide44
External Factors Affecting Promotion
A business must understand the laws governing promotional activities vary by country. Some countries have strict promotional laws marketers must follow, while other countries' laws are lenient.
A business that breaks a promotional law may have to pay government fines, which is costly to the business
. Therefore, it is important for marketers to understand which promotional activities are, and are not, permissible in the countries where they sell and promote products. Slide45
External/Internal Factors Affecting Promotion
In some countries, industry and consumer groups influence how the governments regulate promotion. Some, rather than most, countries have a system of checks and balances to verify that promotion regulations are fair.
Changes
in the product's price or distribution methods, or a reorganization of the business are examples of
internal
factors that affect promotion.Slide46
Promotion – Decision-Making
Promotion helps the customer determine which product is the right one for him/her, or the most appropriate.
Promotion introduces new products to consumers and assists with decision making.
It does
NOT help consumers to spend more on products or delay decisions. It is the salesperson's job to identify the customer's buying motives, or reasons for buyingSlide47
Institutional Promotion
Institutional promotions aim to create a certain image in the eyes of
consumers relating to the organization’s role in community affairs.
Ex. of institutional promotion – Charlotte Observer annually sponsors a marathon which benefits charities.
Supporting personal selling activities, introducing new goods or services, and creating consumer interest in goods or services are
all objectives of promotional advertising.Slide48
Promotion – Persuade to Buy
Product promotion attempts to persuade consumers to buy a
good/service
. A half-price sale is attempting to do just that. Since the business is paying for its own announcement, this is
NOT publicity. Institutional promotion aims to create a certain image in the eyes of consumers. Sales promotion understands the concepts and strategies needed to communicate information about goods, services, images, and/or ideas to achieve a desired outcome.Slide49
Focus of Promotion
In the growth stage
, competing products appear on the market, and promotional activities focus on
pointing out differences between competing products
. When a product is first placed on the market, it is in the introductory stage, and it is promoted to gain customer awareness. Little product promotion occurs during the declining stage; rather, money is invested in promotional activities to maintain a positive company image.Slide50
REVIEWSlide51
81. (2) What is an example of an external factor that affects promotion?
A. Reorganization of the business B. Government regulation of ads C. Increase in a product's price
D. A change in distribution methodsSlide52
81. (2) What is an example of an external factor that affects promotion?
A. Reorganization of the business B. Government regulation of ads
C. Increase in a product's price
D. A change in distribution methodsSlide53
82. (2) How does promotion benefit customers?
A. Causes them to postpone making buying decisions B. Enables them to identify their buying motives C. Helps them to select appropriate products
D. Requires them to spend more on productSlide54
82. (2) How does promotion benefit customers?
A. Causes them to postpone making buying decisions B. Enables them to identify their buying motives
C. Helps them to select appropriate products
D. Requires them to spend more on productSlide55
83. (2) What type of promotion is depicted by a business's one-time announcement of its half-price sale in the local newspaper?
A. Product promotion B. Institutional advertisingC. Free publicity
D. Sales promotion Slide56
83. (2) What type of promotion is depicted by a business's one-time announcement of its half-price sale in the local newspaper?
A. Product promotion
B. Institutional advertising
C. Free publicity
D. Sales promotion Slide57
84. (2) What is an objective of institutional advertising?
A. To support personal selling activities B. To demonstrate the organization's role in community affairs C. To introduce new goods or services
D. To create consumer interest in the company's goods or services Slide58
84. (2) What is an objective of institutional advertising?
A. To support personal selling activities B. To demonstrate the organization's role in community affairs
C. To introduce new goods or services
D. To create consumer interest in the company's goods or services Slide59
85. (2) In which stage of a product's life cycle do promotional activities focus on differences between competing products?
A. Introductory B. Growth C. Declining
D. IntroductionSlide60
85. (2) In which stage of a product's life cycle do promotional activities focus on differences between competing products?
A. Introductory B. Growth
C. Declining
D. IntroductionSlide61
86. (2) What form of promotion is generally emphasized for complex, technical products sold to industrial users?
A. Personal selling B. Sales promotion C. Publicity
D. Advertising Slide62
86. (2) What form of promotion is generally emphasized for complex, technical products sold to industrial users?
A. Personal selling B. Sales promotion
C. Publicity
D. Advertising Slide63
87. (2) How do competing businesses within the same industry usually react to each other's promotional mixes?
A. By playing follow the leaderB. By reducing their promotional budgetsC. By trying not to outdo each other
D. By changing distribution channels Slide64
87. (2) How do competing businesses within the same industry usually react to each other's promotional mixes?
A. By playing follow the leaderB. By reducing their promotional budgets
C. By trying not to outdo each other
D. By changing distribution channels Slide65
88. (2) What is an example of publicity?
A. Company news release B. Direct mail C. BillboardD. Company television commercial Slide66
88. (2) What is an example of publicity?
A. Company news release B. Direct mail
C. Billboard
D. Company television commercial Slide67
89. (2) What is an example of advertisement stereotyping?
A. A television commercial depicts a woman mopping the kitchen with a new floor cleaner.B. A print ad shows a middle-aged male pouring orange juice in glasses for his children. C. A magazine ad campaign presents a variety of people who encourage others to drink milk.
D. A well-known athlete records a PSA that emphasizes the importance of continuing education.Slide68
89. (2) What is an example of advertisement stereotyping?
A. A television commercial depicts a woman mopping the kitchen with a new floor cleaner.B. A print ad shows a middle-aged male pouring orange juice in glasses for his children.
C. A magazine ad campaign presents a variety of people who encourage others to drink milk.
D. A well-known athlete records a PSA that emphasizes the importance of continuing education.Slide69
90. (2) Which advertising message reinforces the concept of materialism?
A. We make this product by hand and use organic materials. B. The government rates our product higher than our competitor's product.
C. You can increase your social status by purchasing this product.
D. For more information about our line of products, visit our web site. Slide70
90. (2) Which advertising message reinforces the concept of materialism?
A. We make this product by hand and use organic materials. B. The government rates our product higher than our competitor's product.
C. You can increase your social status by purchasing this product.
D. For more information about our line of products, visit our web site. Slide71
91. (2) What is new technology enabling businesses to create that is impacting the promotion function?
A. Personalized premiums B. Publicity campaigns
C. Attractive commercials
D. Individualized messages Slide72
91. (2) What is new technology enabling businesses to create that is impacting the promotion function?
A. Personalized premiums B. Publicity campaigns
C. Attractive commercials
D. Individualized messages Slide73
92. (2) How have technological advancements enhanced a small business's ability to promote its products?
A. Most companies need fewer channels to coordinate and carry out promotional activities.B. Small companies now have more money to spend on promotional activities.
C. Less time and creativity are required to develop effective promotional campaigns.
D. Information can be communicated by more venues, and messages can be customized.Slide74
92. (2) How have technological advancements enhanced a small business's ability to promote its products?
A. Most companies need fewer channels to coordinate and carry out promotional activities.B. Small companies now have more money to spend on promotional activities.
C. Less time and creativity are required to develop effective promotional campaigns.
D. Information can be communicated by more venues, and messages can be customized.Slide75
93. (2) Why are there specific guidelines for advertising to children?
A. Research indicated that juvenile offenders watched more advertising on television than the average child. B. Children are impressionable, and the wrong kinds of advertising can affect their development.
C. Parents mounted a campaign against advertisers because their children demanded products they saw advertised.
D. Children revealed, in focus groups, that while they like watching ads, it doesn't make them behave differently. Slide76
93. (2) Why are there specific guidelines for advertising to children?
A. Research indicated that juvenile offenders watched more advertising on television than the average child. B. Children are impressionable, and the wrong kinds of advertising can affect their development.
C. Parents mounted a campaign against advertisers because their children demanded products they saw advertised.
D. Children revealed, in focus groups, that while they like watching ads, it doesn't make them behave differently. Slide77
94. (2) Which statement is
true about regulating international promotional activities?A. Most countries have a system of checks and balances to verify that promotion regulations are fair. B. Businesses must submit all promotional materials to the International Ad Coalition for approval.
C. Governments bear the sole responsibility of monitoring promotional materials and regulations.
D. A business must understand that the laws governing promotional activities vary by country. Slide78
94. (2) Which statement is
true about regulating international promotional activities?A. Most countries have a system of checks and balances to verify that promotion regulations are fair. B. Businesses must submit all promotional materials to the International Ad Coalition for approval.
C. Governments bear the sole responsibility of monitoring promotional materials and regulations.
D. A business must understand that the laws governing promotional activities vary by country. Slide79
95. (2) Why are promotional media such as newspapers and television referred to as mass media?
A. They can present large amounts of promotion. B. They direct promotions to a specific audience.
C. They reach a lot of people at the same time.
D. They try to meet the needs of many businesses. Slide80
95. (2) Why are promotional media such as newspapers and television referred to as mass media?
A. They can present large amounts of promotion. B. They direct promotions to a specific audience.
C. They reach a lot of people at the same time.
D. They try to meet the needs of many businesses. Slide81
96. (2) What is an example of out-of-home media?
A. A poster on the wall of a subway station B. An eye-appealing card placed in a mailbox C. A calendar imprinted with a company's name
D. An electrical sign located in a high-traffic areaSlide82
96. (2) What is an example of out-of-home media?
A. A poster on the wall of a subway station B. An eye-appealing card placed in a mailbox C. A calendar imprinted with a company's name
D. An electrical sign located in a high-traffic area