Promotion

Promotion is the communication process of marketing…

Review of Communication Theory

Remember: Information changes what we know.

Suppose one transmits 1000 bits (0s and 1s). If these bits are known in advance (absolute probability), then no information has been transmitted. If, however, each is equally and independently likely to be 0 or 1, 1000 bits (in the information theoretic sense) have been transmitted. Between these two extremes, information can be quantified as follows. If X is the set of all messages {x1,...,xn} that X could be, and p(x) is the probability of x given some condition, then the entropy of X is defined:

Basically

What this means is:

Entropy is a measure of information transmitted.

The lowest probability message carries the most information.

Communication: Meaning is transferred fromone person to another

Source

Encoding

Message: the physical form of a communication

Medium: communication vehicleTV Radio Internet Magazines NewspapersMail Billboards Flyers Person-to-person

Decoding

Receiver

Noise

Promotion

What are the objectives of promotion?

Promotion Objectives:

1.Create Awareness2.Stimulate Demand3.Encourage Product Choice4.Identify Prospects (Customers)

Promotion Objectives:

5. Counter Competition6. Reduce Sale Fluctuations 7. Persuade8. Change Attitudes9. Educate10. Facilitate Channels

Push and Pull

Push: Push product (or awareness) from production to customer

Push and Pull

Pull: Pull product (or awareness) up to customer (customer driven)

Promotional Mix

Selecting the Promotional Mix Elements

1. Internal factorsResourcesObjectives of the firm or campaignPolicies

Selecting the Promotional Mix Elements

2. Market CharacteristicsSizeLocationDemographics

http://www.census.gov/2010census/

Selecting the Promotional Mix Elements

3. Product CharacteristicsLife cycleGood/Service/IdeasCompetition & Intensity of CoverageProduct Usage

Selecting the Promotional Mix Elements

4. Cost and Availability of MethodsSocial MediaCPMEffective Hits

Advertising:Paid massed non-personal communication

Personal Selling:Person-to-person communication

Sales Promotion:Short-term incentives and programs to encourageinterest and the purchase of a product or service

Publicity (PR):Promotion through commercially significant vehicles of mass media, not paid for directlyby sponsor

Direct Marketing:Direct communications with targeted customers by phone, e-mail, mail, etc.

Direct Marketing:Direct communications with targeted customers by phone, e-mail, mail, etc.

eMarketing

Promotional Mix

How do we put all the parts of promotiontogether to obtain our goals?

Promotional Mix

1.Mass AppealsAdvertisingPublic RelationsSales Promotions

Promotional Mix

2. Personal AppealsSales PromotionsPersonal SellingDirect Marketing

Promotional Mix

3. Personal AppealsWOMGetting people to talk about productViral Marketing: fun or entertaining

messages that spread form oneperson to another

Guerrilla Marketing: “ambushing”

http://en.wikipedia.org/wiki/Guerrilla_marketing

Integrated Marketing Communications IMC

Use of the promotion mix to create and maintain long-termrelationships with customers by satisfying customerneeds and/or wants.

Integrated Marketing Communications IMC

Goals:

1.One unified voice2.Begins with customer3.Develop a relationship with customers4.Create two-way communication5.Include all stakeholders, not just customers6.Generate a continuous stream of communication7.Measure results from ACTUAL feedback

Integrated Marketing Communications IMC

How:

1.Identify the target audiences2.Establish objectives

What are we trying to do:Hierarchy of EffectsAwarenessInformCreate desirePurchaseBuild loyalty

Integrated Marketing Communications IMC

How:

1.Identify the target audiences2.Establish objectives3.Budget

Budget Types:

1. Affordability (28% goods, 28% industry)2. Arbitrary Allocation (16% consumer goods, 24% industry)3. Ratio to Sales (52% consumer goods, 32 industry)4. Competitive Comparison5. Marginal Analysis6. Objective Task

Integrated Marketing Communications IMC

How:

1.Identify the target audiences2.Establish objectives3.Budget4.Create the campaign5.Feedback and Evaluations

Advertising: Paid mass non-person communication

“Use facts, not fantasy. Don’t sermonize; advertise.”

“If an ad doesn’t sell, if it doesn’t ultimately ring the cashregister, it is a waste of money.”

Jeffrey Fox

Product advertisements: are advertisements that focus on selling a good or service and which take three forms:

(1) pioneering (or informational), (2) competitive (or persuasive), (3) reminder.

15-40

Dial SoapWhat is the type and purpose of this advertisement?

15-41

Institutional advertisements:

are advertisements designed to build goodwill or an image for an organization rather than promote a specific good orservice.

15-42

Institutional Advertisements

• Advocacy

• Pioneering Institutional

• Competitive Institutional

• Reminder Institutional

15-43

Chevron and BridgestoneWhat is the type and purpose of each advertisement?

15-44

https://www.facebook.com/photo.php?v=461220498290&set=vb.431744650466&type=3&theater

http://www.bridgestonetire.com/about/news/tv-commercials#

Got Milk? and U.S. ArmyWhat is the type and purpose of each advertisement?

15-45

http://milkdelivers.org/got-milk-campaign/

World Wide Fund, Candie’s, and GeicoWhat is the appeal and purpose of each advertisement?

15-46

http://www.youtube.com/watch?v=kWBhP0EQ1lA

http://www.geico.com/about/commercials/#.UozzWcSfjfs

Advertising Advantages:

1.Cost/contactCPM = (cost/unit)/reach X 1000

Example: Jay Leno $35,000/ 30 sec reaches 3.6 millionSuper Bowl $3.8 mill/ 30 sec reaches 108 million

CPM for Leno = $ 9.72CPM for SB = $ 35.19

Advantages:

1.Cost/contact2.Repetition

Two-Factor Theory

+

-

Valence

Advantages:

1.Cost/contact2.Repetition 3.Versatility

Advantages:

1.Cost/contact2.Repetition 3.Versatility4.Atmosphere

http://www.livingroomcandidate.org/commercials/1964

http://www.livingroomcandidate.org/commercials/1984

Advantages:

1.Cost/contact2.Repetition 3.Versatility4.Atmosphere5.Prestige

Prestige factor is very odd:

Advertising Disadvantages:

1.Cost Super Bowl is still $7.6 mill/ minute!!

Disadvantages:

1.Cost2.Flexibility

Disadvantages:

1.Cost2.Flexibility3.Clutter

Disadvantages:

1.Cost2.Flexibility3.Clutter

Also a problem with repetition

Disadvantages:

1.Cost2.Flexibility3.Clutter4.Credibility “Alternative Explanation”

Disadvantages:

1.Cost2.Flexibility3.Clutter4.Credibility “Alternative Explanation”5.High Waste

Disadvantages:

1.Cost2.Flexibility3.Clutter4.Credibility “Alternative Explanation”5.High Waste6.Lack of Action

Disadvantages:

1.Cost2.Flexibility3.Clutter4.Credibility “Alternative Explanation”5.High Waste6.Lack of Action7.Problem measuring effectiveness

DEVELOPING THEADVERTISING PROGRAM

1. Identifying the Target Audience

2. Specifying the Advertising Objectives

3. Setting the Advertising Budget

15-63

DEVELOPING THEADVERTISING PROGRAM

4. Designing the ads

Humorous appeals

Increases credibility

Increases memory

Increases likability

15-64

DEVELOPING THEADVERTISING PROGRAM

4. Designing the ads

Fear appeals

Protection racket

15-65

http://www.youtube.com/watch?v=ivAx1zgdWoM

DEVELOPING THEADVERTISING PROGRAM

4. Designing the ads

Sex appeals

Careful!

15-66

http://smallbusiness.chron.com/examples-sex-appeal-advertising-works-60861.html

http://advertising.about.com/od/advertisingprojects/a/Sex-In-Advertising.htm

DEVELOPING THEADVERTISING PROGRAM

5. Selecting the right media

15-67

Television, direct mail, and newspapers account for more than 65% of all advertising

expenditures (in $millions)

15-68

Advertisers must consider the advantages and disadvantages of the many media alternatives

15-69

Alternative structures of advertising agencies used to carry out the advertising program

15-70

Public Relations and Publicity

Promotion through commercially significant vehicles of mass media, NOT paid for directly by sponsor.

Public Relations and Publicity

Promotion through commercially significant vehicles of mass media, NOT paid for directly by sponsor.

Public Relations and Publicity

Promotion through commercially significant vehicles of mass media, NOT paid for directly by sponsor.

1. Should be proactive2. Should have a “hook”3. Should have a consistent theme4. Should be integrated into total promotion effort5. Should be done constantly

Public Relations and Publicity

5. Should be done constantly

Gentle Rain vs. Flood

Advantages:

1.Credibility2.Impact3.Cost

Disadvantages:

1.Lack of control2.Placement

I have been in the Enquirer twice.I don’t think it added to mynon-existent career….

Other functions of PR and Publicity

1.Advice and council2.Publications3.Relations with publics4.Public opinion5.Publicity

Other functions of PR and Publicity

6. Miscellaneous

Speaker bureausCorporate donationsScholarshipsAwards, etc.

Honorary Degree for Bee Gees

Warning!!

Public Relations can be done with great impact

and at little cost, but….

Public Relations can be done with great impact

and at little cost, but….

Who does the publicity office think they work for?

Public Relations can be done with great impact

and at little cost, but….

Who does the publicity office think they work for?

As a manager, make sure that the office believes it worksfor the organization, NOT for you.

Publicity can become habit forming.Some people can become addicted to it.

Sales PromotionShort-term incentives and programs

to encourage interest and the purchaseof a product or service.

Sales Promotion

Compared to advertising:

1.Both are paid2.Both attempt to change attitudes and behavior3.Ads: Long-term objectives

SP: Short-term objectives4.Ads: Can stand alone SP: Is a part of a larger promotional mix

Sales Promotion

Type Target

Trade shows TradeIncentives TradePush Money TradePOP Trade, ConsumersPremiums Trade, ConsumersPromotional products Trade, ConsumersContests (sweepstakes) Trade, ConsumersRebates Trade, ConsumersCoupons Consumers, Trade

Sales Promotion

Type Target

Samples Consumers

Sales Promotion

Type Target

Samples ConsumersSpecials/bonus ConsumersPatronage reward ConsumersProduct/brand placement Consumers

http://query.nytimes.com/gst/fullpage.html?res=9A04E2D81238F933A15756C0A962958260&sec=&spon=&pagewanted=all