mp_12 the role of promotion

8/13/2019 MP_12 the Role of Promotion

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ME Ch 19 1

The Role of Promotion

Promotion- any form of communication a business or

organization uses to inform, persuade, or remind people

about its products and improve its public images.

Product promotion - used to convince potential

customers to buy products from it instead of from a

competitor. Explains major features and benefits of its products

Tells where those products are sold Advertises sales on those products

Answers customer questions

Introduces new products


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ME Ch 19 2

The Role of Promotion

Institutional Promotion- used to create a favorable image

for itself. Does not directly sell a certain product.

However, may ultimately result in increased sales of a

companys products.


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ME Ch 19 3

Four Types of Promotion

1.Advertising - any paid form of nonpersonalpresentation and promotion of ideas, goods, or services

by an identified sponsor. Six Advantages of Advertising

1. A large number of people usually see the advertisers message

2. Costs per potential customer are usually lower than other

forms of promotion

3. Can choose the most appropriate media to reach target mkt

4. Can control the content of an advertisement

5. Ads are subject to repeat viewing

Ads can presale products


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ME Ch 19 4


Four Disadvantages of Advertising

1. Cannot focus well on individual needs

2. Some forms of advertising can be too expensive for many

businesses

3. Sometimes advertising is wasteful and inefficient - message

may be spent on non-potential customers

4. Advertising must be brief


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ME Ch 19 5


2. Publicity - placing newsworthy information about a

company, product, or person in the media. Can be used to

promote particular events and promote particular

products. The main purpose of publicity is to build animage. Image - the way a business or organization is

defined in peoples minds.


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ME Ch 19 6


Advantages of Publicity

Publicity is free; advertising is not

Can be used to create a positive image within the community

Viewed as being more credible or believable than advertising

Viewed as news, people more attention to publicity

Disadvantages of Publicity

Give up much of your control of your message

Not all publicity is positive


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ME Ch 19 7

Four Types of Promotion 3. Sales Promotion - All marketing activities, other than

personal selling, advertising, and publicity, that are used

to stimulate consumer purchasing and sales

effectiveness.

Objectives of Sales Promotion

Increase sales

Inform customers about new products

Create a positive store or corporate image

3 Characteristics

Short term activities

Offers some type of incentive

Can be successfully used in all channels of distribution


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ME Ch 19 8

Four Types of Promotion Sales promotion can be either consumer or trade oriented

Trade Promotions - sales promotion activities designed to gain

manufacturers, wholesalers, and retailers support for a product.

More money is spent on promoting to businesses than to consumers.

1. Slotting allowances - a cash premium paid by the manufacture

to a retail chain for the costs involved in placing a new product on

its shelves.

2. Buying allowances - special price discount given by

manufacturers to wholesalers and retailers to encourage them to

either buy a product or buy a larger quantity.

3. Trade Shows and Conventions - designed to reach wholesalers

4. Sales incentives - awards given managers and employees who

successfully meet or exceed their companys set sales quota.


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ME Ch 19 9


Consumer Sales Promotions - designed to encourage

customers to buy a product.

1. Licensing - Organizations, such as manufactures, movie makers,

sports teams, and celebrities, may license for a fee their logo,trademark, trade characters, names and likenesses, or personal

endorsements to a business to be used in promoting the

businesss products.

2. Promotional tie-ins - involve sales promotional arrangements

between one or more retailers or manufacturers. They combinetheir resources (advertising and sales promotional activities) to

do a promotion that creates additional sales for each partner.


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ME Ch 19 10


3. Visual Merchandising and Displays -

Visual Merchandising- the coordination of all physical elements in a

place of business so that it projects the right image to its customers

Displays- visual and artistic aspects of presenting a product to a target

group of customers.


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ME Ch 19 11


4. Premium and Incentives - most popular and frequently used sales

promotion type

Premiums- low cost items given away free to consumers as a condition

of purchase.

Coupons - certificates given to customers entitling cash discounts

Factory Packs (in-packs)- free gifts placed in product packages

Traffic Builders - low cost premiums like key chains, pens

Coupon Plans - ongoing programs in exchange for labels, coupons, or other

tokens from one or more purchases

Incentives - higher-priced products given in contests or sweepstakes 5. Product Samples - free trial size of a product that is sent through the

mail, distributed door-to-door, or through retail stores and trade shows


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ME Ch 19 12


Advantages of Sales Promotions

Unique and has special appeal to a potential customer

Helps build customer loyalty

Disadvantages of Sales Promotions

Difficult to end without the customers becoming dissatisfied

Store image and sales can suffer if the promotion is not properly

planned and managed

Only designed to supplement other promotional efforts andcannot make up for poor products


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ME Ch 19 13


4. Personal Selling - making an oral sales presentation to

one or more potential buyers. On a per contact basis,

personal selling is the most expensive form of promotion.

Order-taking personnel - cashiers, counter clerks, and sales

associates, perform routine tasks.

Order-getting personnel - professional salespeople, are more

involved in informing customers and helping them to buy. Usually

sell big ticket items like real estate, cars, appliances, and

industrial goods


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ME Ch 19 14


Promotional Mix - a combination of different types of

promotion. A business decides on a promotional mix that

will be most effective in persuading customers or other

businesses to purchase and support the businesssproducts.


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ME Ch 19 15

Promotional Mix

Factors affecting the selection of a promotional

mix

Good, Service, or Idea Type of product

Product nature

Stage of life cycle

Products market

Type of consumer

Number of Consumers

Geographical location


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ME Ch 19 16

Promotional Mix

Distribution System

Products Company

Historical perspective

Available funds Size of sales force

Competition


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ME Ch 19 17

Publicity and Public Relations

Publicity - Placing newsworthy information about a

company, product, or person in the media.

Advantages

Free to the business

Seen as more credible than advertising

Disadvantages

Lack of control by the business - bad stories can get printed


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ME Ch 19 18

Publicity and Public Relations

Public Relations - any activity designed to create goodwill

toward a business.

Benefits of PR

Increasing sales

Increasing firms good reputation

Increasing customers reception of advertising messages

Spreading accurate information to the public

Conditioning customers to expect quality products from thecompany

Reducing the impact of problems

Helping to obtain better treatment from government


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ME Ch 19 19

Audiences for PR

Internal Audiences groups within the organization Employee Relations - goal is to keep your employees

happy by using:

Tuition reimbursement

Newsletters

Health and wellness programs

Opportunities for communications


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ME Ch 19 20

Audiences for PR

External Audiences groups outside the organization Customers - Satisfied customers = repeat business. Ways

to keep customers happy include:

Provide special services and amenities such as gift-wrapping,

check cashing, free delivery, free parking, etc.

Advisory boards - panels of consumers that make suggestions

about products and businesses

Customer newsletters, annual reports Customer events - seminars, lunches, entertainment


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ME Ch 19 21

Audiences for PR

Community - company sponsors activities that benefit the

civic, social, and cultural life of the community. Activities

can include:

School partnerships - HP donating computers to the high school

Sponsorship of community events

Scholarships


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ME Ch 19 22

Public Relations News Release - a pre-written story about the company that is

sent to various media for publication. It usually contains

information about the companys employees, stores,

operations, products, corporate philosophy, or participation

in an event or program. Can contain hard or soft news.

Hard News - information that should be announced right away

because the public will want to know about it immediately

Soft News - information that does not need to be announced

immediately because it will be of as much interest to the public lateras it is now


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ME Ch 19 23

Purposes of News Releases

To introduce new products

To keep the business in the public eye

To position the businesss image

To support good employee relations

To create good community relations


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ME Ch 19 24

Getting Your News Release in the

Media Include a captioned photograph with the release

Meet media deadlines

Write an appropriate number of releases

Direct the release to a specific person Advise the staff that you have sent out a release

Reread the release after setting it aside

Keep a copy of every release

Send a cover letter with the release Send a thank-you note after the release is used

Avoid pressuring the editor

Avoid mentioning publicity or advertising

Avoid playing favorites


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ME Ch 19 25

Public Relations

Press Kit - a folder containing articles, news releases,

feature stories, and photographs about a company,

product, or person. Press kits are given to the media to

assist them in reporting on the intended news item.

Press Conference - a meeting in which media members

are invited by the business or organization to hear an

announcement about a newsworthy event.

mp_12 the role of promotion

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