Download Advertising, Public Relations, Personal Selling and Sales Promotion

Principles of Marketing
Global Edition
Kotler and Armstrong
Chapter 15-16:
Advertising, Public
Relations, Personal Selling
and Sales Promotion
Lecturer:
Szilvia Bíró-Szigeti, PhD
Department of Management and Corporate Economics
Copyright © 2016 Pearson Education, Inc.
Prof. Zoran Anisic, PhD
Open Innovation and Customer co-creation - From social
media to social product development
Advertising
Advertising is any paid form of nonpersonal presentation
and promotion of ideas, goods, or services by an
identified sponsor.
the 49th largest advertising
spender is a not-for-profit
organization:
the U.S. Government
Advertising
Major Advertising Decisions
Developing an
advertising strategy
campaigns
Setting Advertising Objectives
An advertising objective is a specific communication task to be
accomplished with a specific target audience during a specific time.
Informative advertising is used when introducing a new
product category to build primary demand.
Persuasive advertising is important with increased
competition to build selective demand.
Comparative advertising is when a company compares its
brand with other brands.
Reminder advertising is important with mature products to
help maintain customer relationships and keep customers
thinking about the product.
Setting Advertising Objectives
Possible Advertising Objectives
Informative Advertising
•
•
•
•
Communicating customer value
Building a brand and company image
Telling the market about a new product
Explaining how a product works
•
•
•
•
Suggesting new uses for a product
Informing the market of a price change
Describing available services & support
Correcting false impressions
Persuasive Advertising
• Building brand preference
• Encouraging switching to a brand
• Changing customer perceptions of
product value
• Persuading customers to purchase now
• Persuading customers to receive a sales call
• Convincing customers to tell others about
the brand
Reminder Advertising
• Maintaining customer relationships
• Reminding consumers where to buy the
• Reminding consumers that the product
product
may be needed in the near future
• Keeping the brand in a customer’s mind
during off-seasons
Setting the Advertising Budget
Factors to Consider
• Stage in product life cycle
• Market share
• Competition
Developing Advertising Strategy
Advertising strategy is the strategy by which the company
accomplishes its advertising objectives and consists of:
• Creating advertising messages
• Selecting advertising media
Developing Advertising Strategy
Creating the Advertising Message and Brand Content
Advertising clutter: Today’s
consumers, armed with an
arsenal of weapons, can
choose what they watch
and
don’t
watch.
Increasingly, they are
choosing not to watch
ads.
Developing Advertising Strategy
Creating the Advertising Message and Brand Content
Advertisements need to be better planned, more imaginative,
more entertaining, and more rewarding to consumers.
• Merging of advertising and entertainment takes one of two
forms: advertainment or branded entertainment.
Developing Advertising Strategy
Creating the Advertising Message and Brand Content
Message and content strategy. The first step in creating effective
advertising content is to plan a message strategy—the general
message that will be communicated to consumers.
• Identifies consumer benefits
• Follows from company’s broader positioning and customer
value creation strategies
Developing Advertising Strategy
Message and Content Strategy
The creative concept is the compelling “big idea” that will
bring an advertising message strategy to life in a
distinctive and memorable way.
Advertising appeals should have three characteristics:
• They should be meaningful
• Appeals must be believable
• Appeals should be distinctive
Developing Advertising Strategy
Message Execution
Message execution is when the advertiser turns the big idea into an
actual ad execution that will capture the target market’s
attention and interest.
The creative team must find the best approach, style, tone, words,
and format for executing the message.
Developing Advertising Strategy
This style shows one
or more “typical”
people using the
product in a normal
setting.
This style shows
how a product fits
in with a particular
lifestyle.
This style builds a
mood or image
around the product
or service, such as
beauty, love, or
serenity.
Slice of life
Technical expertise:
This style shows the
company’s expertise
in
making
the
product.
Message Execution
Musical: This style shows
people
or
cartoon
characters singing about
the product.
Lifestyle
Fantasy
Mood or
image
Musical
Personality
symbol
Technical
expertise
Scientific
evidence
Testimonial or
endorsement
This style presents survey or scientific
evidence that the brand is better, or better
liked than one or more other brands.
This style creates
a fantasy around
the product or its
use. For instance,
many ads are
built
around
dream themes.
This
style
creates
a
character that
represents the
product.
This
style
features a highly
believable
or
likable source
endorsing the
product.
Developing Advertising Strategy
Message Execution
Message
execution
includes:
• Tone
•
•
•
Positive or negative
Attention-getting words
Format
•
•
•
Illustration
Headline
Copy
also
Developing Advertising Strategy
Consumer Generated Content
• Consumers submit ad
message ideas, videos,
and other brand content.
• Incorporates the voice of
the customer into brand
messages
• Generates
greater
customer engagement
Copyright ©2014 by Pearson Education, Inc. All rights reserved
Developing Advertising Strategy
Selecting Advertising Media
The major steps in advertising media selection are :
• Determining reach, frequency, impact, and engagement
• Choosing among major media types
• Selecting specific media vehicles
• Choosing media timing
Developing Advertising Strategy
Determining Reach, Frequency, Impact, and Engagement
Reach is a measure of the percentage of people in the target
market who are exposed to the ad campaign during a given
period of time.
Frequency is a measure of how many times the average person in
the target market is exposed to the message.
Impact is the qualitative value of a message exposure through a
given medium.
Engagement is a measure of things such as ratings, readership,
listenership, and click-through rates.
Developing Advertising Strategy
Choosing among Major Media Types
Selecting media vehicles involves
decisions
presenting
the
message
effectively
and
efficiently to the target customer
and
must
consider
the
message’s:
• Impact
• Effectiveness
• Cost
Copyright ©2014 by Pearson Education, Inc. All rights reserved
Developing Advertising Strategy
Choosing among Major Media Types
Narrowcasting focuses the message on selected market segments.
• Lowers cost
• Targets more effectively
Media planners must
Selecting Specific Media Vehicles
• Television
compute the cost per 1,000
• Magazine
• Online and mobile vehicles
persons reached by a vehicle.
Copyright ©2014 by Pearson Education, Inc. All rights reserved
Developing Advertising Strategy
Deciding on Media Timing
When deciding on media timing,
the planner must consider:
• Seasonality
• Pattern of the advertising
• Continuity—scheduling
evenly within a given period
• Pulsing—scheduling
unevenly within a given
period
Copyright ©2014 by Pearson Education, Inc. All rights reserved
Evaluating Advertising Effectiveness and
Return on Advertising Investment
Return on advertising investment is the net return on
advertising investment divided by the costs of the
advertising investment.
Evaluating Advertising Effectiveness and
Return on Advertising Investment
Two types of advertising results:
Communication effects indicate whether the ad and media are
communicating the ad message well and can be tested before
or after the ad runs.
Sales and profit effects compare past sales and profits with past
expenditures or through experiments.
Other Advertising Considerations
• Organizing for advertising
• Agency vs. in-house
An advertising agency is a
marketing services firm that assists
companies in planning, preparing,
implementing, and evaluating all
or portions of their advertising
programs.
In small companies, advertising might be
handled by someone in the sales
department or large companies may have
advertising departments whose job it is to
set the advertising budget, work with the
ad agency, and handle other advertising
not done by the agency.
Other Advertising Considerations
• International advertising decisions
• Standardization or Adaptation
Standardization has drawbacks because it
ignores the fact that country markets differ
greatly in their cultures, demographics, and
economic conditions.
“think globally but act locally.” = To develop
global advertising strategies that make their
worldwide efforts more efficient and
consistent.
The degree to which global
advertising should be adapted to the
unique characteristics of various
country markets.
Instore marketing
Our society likes the experience buying (to maximize the experience and
values crisis)
• "Discover the deficit and sell the emotions!"
• Instinct "I" (to get and to compare)
• Superior "I" (caution, to difference)
• Cognitive dissonance: Permissible? - Deserve? - Me? - Differ? (Haben
oder sein?)
• Those who do not have anything that it cannot be
Instore marketing
Consumption: sin (?)
Consumer diseases (5-20%): indecision
Christmas Syndrome:
• Inventory:
• relationship
• Love
• Self-realization
• Proof:
• Food
• Gift
• Experience
• Happy vs Anxiety
Public Relations
Public relations involves building good relations with the
company’s various publics by obtaining favorable publicity,
building up a good corporate image, and handling or heading off
unfavorable rumors, stories, and events.
Copyright ©2014 by Pearson Education, Inc. All rights reserved
Public Relations
Press relations or press agency involves the creation and
placing of newsworthy information to attract attention
to a person, product, or service.
Product publicity involves publicizing specific products.
Public affairs involves building and maintaining national or
local community relations.
Copyright ©2014 by Pearson Education, Inc. All rights reserved
Public Relations
Lobbying involves building and maintaining relations with legislators
and government officials to influence legislation and regulation.
Investor relations involves maintaining relationships
shareholders and others in the financial community.
with
Development involves public relations with donors or members of
nonprofit organizations to gain financial or volunteer support.
Copyright ©2014 by Pearson Education, Inc. All rights reserved
The Role and Impact of Public Relations
•
Lower cost than advertising
•
Stronger impact on public awareness than advertising
•
Has power to engage consumers and make them part of the
brand story
Major Public Relations Tools
News
Speeches
Special
events
Written
materials
Corporate
identity
materials
Public
service
activities
Buzz
marketing
Social
networking
Internet
Personal Selling and Sales Promotion
1. What does “Customer
Business Development” mean at
P&G? How does it differ from the
standard sales approach?
2. How do P&G salespeople deal
with large, complex accounts?
3. Why do customers allow P&G
to advise them on the stocking
and placement of competitors’
brands as well as its own?
Personal Selling
Personal selling is the interpersonal part of the promotion mix and
can include:
• Face-to-face communication
• Telephone communication
• Video or Web conferencing
Personal Selling
The Role of the Sales Force
• Interpersonal interactions between salespeople and individual
customers:
• more effective than advertising in more complex selling situations.
• can learn more about customer’s problems and adjust the marketing
offer and presentation to fit each customer’s special needs.
• Some firms have no salespeople at all—for example, companies
that sell only online or through catalogs, or companies that sell
through manufacturer’s reps, sales agents, or brokers.
• Sales force plays a major role in companies that sell business
products and services salespeople work directly with customers.
Personal Selling
The Nature of Personal Selling
Salespeople are an effective link between the company and its
customers to produce customer value and company profit by
• Representing the company to customers
• Representing customers to the company
• Working closely with marketing
Salesperson-owned loyalty:
To many customers, the salesperson is the company and
customers may become loyal to salespeople as well as to
the companies and products they represent.
Managing the Sales Force
• Sales force management is the analysis,
implementation, and control of sales force activities.
planning,
Managing the Sales Force
Designing Sales Force Strategy and Structure
Territorial sales force structure
Product sales force structure
Customer sales force structure
Complex sales force structure
How will a company decide which structure is best for them?
Managing the Sales Force
Designing Sales Force Strategy and Structure
Territorial sales force structure: each salesperson is assigned an exclusive
geographic area and sells the company’s full line of products and services
to all customers in that territory.
• Defines salesperson’s job
• Fixes accountability
• Lowers sales expenses
• Improves relationship building and selling effectiveness
Managing the Sales Force
Designing Sales Force Strategy and Structure
Product sales force structure: each salesperson sells along product
lines.
• Improves product knowledge
• Can lead to territorial conflicts
GE employs different sales forces within
different product and service divisions of
its major businesses. Within GE
Infrastructure, for instance, the company
has separate sales forces for aviation,
energy, transportation, and water
processing products and technologies.
Managing the Sales Force
Designing Sales Force Strategy and Structure
Customer sales force structure: each salesperson sells along
customer or industry lines.
• Improves customer relationships
For example, appliance maker Whirlpool
assigns individual teams of salespeople to
big retail customers such as Sears, Lowe’s,
Best Buy, and Home Depot.
Managing the Sales Force
Designing Sales Force Strategy and Structure
Complex sales force structure: a wide variety of products is
sold to many types of customers over a broad geographic
area, and it combines several types of sales force structures.
Whirlpool specializes its sales force by
customer (with different sales teams for
Sears, Lowe’s, Best Buy, Home Depot, and
smaller independent retailers) and by
territory for each key customer group
(territory
representatives,
territory
managers, regional managers, and so on).
Managing the Sales Force
Designing Sales Force Strategy and Structure
Sales Force Size
Salespeople are one of the company’s most productive and
expensive assets.
Workload approach to sales force size refers to grouping accounts
into different classes to determine the number of salespeople
needed.
Managing the Sales Force
Designing Sales Force Strategy and Structure
Outside salespeople call on customers in the field.
Inside salespeople conduct business from their offices and often
provide support for the outside salespeople.
• Technical sales support people
• Sales assistants
Team selling is used to service large, complex accounts.
Managing the Sales Force
Recruiting and Selecting Salespeople
• Careful selection and training increases sales
performance.
• Poor selection increases recruiting and training costs,
leads to lost sales, and disrupts customer relationships.
Gallup Consulting has interviewed hundreds of thousands of
salespeople. Its research suggests that the best salespeople
possess four key talents: intrinsic motivation, a disciplined
work style, the ability to close a sale, and, perhaps most
important, the ability to build relationships with customers.
Managing the Sales Force
Training Salespeople
• Goals of training
• Customer knowledge
• Selling process
• Knowledge of products, company, competitors
Managing the Sales Force
Compensating Salespeople
Fixed
amounts
Variable
amounts
Expenses
Fringe
benefits
The average salesperson’s pay consists of
about 67 percent salary and 33 percent
incentive pay.
Managing the Sales Force
Supervising and Motivating Salespeople
• The goal of supervision is to help salespeople work smart by
doing the right things in the right ways.
• The goal of motivation is to encourage salespeople to work
hard and energetically toward sales force goals.
call plan
time-and-duty
analysis
Managing the Sales Force
Supervising and Motivating Salespeople
How Salespeople
Spend Their Time
Managing the Sales Force
Supervising and Motivating Salespeople
• Sales morale and performance can be increased through
• Organizational climate: describes the feeling that
salespeople have about their opportunities, value, and
rewards for a good performance.
• Sales quotas: set standards stating the amount they
should sell and how sales should be divided among the
company’s products. Compensation is often related to
how well salespeople meet their quotas.
• Positive incentives: increase the sales force effort. Sales
meetings provide social occasions, breaks from the
routine, chances to meet and talk with “company brass,”
and opportunities to air feelings and identify with a larger
group.
Managing the Sales Force
Evaluating Salespeople and Sales Force Performance
Sales reports
Weekly or monthly work
plans and longer-term
territory marketing plans.
Call reports
Expense reports
Salespeople also write up their completed activities on call
reports and turn in expense reports for which they are partly
or wholly reimbursed. The company can also monitor the sales
and profit performance data in the salesperson’s territory.
The Personal Selling Process
Steps in the Personal Selling Process
The Personal Selling Process
Steps in the Personal Selling Process
Prospecting identifies qualified potential customers through
referrals from
• Customers
• Suppliers
• Dealers
• Internet
The Personal Selling Process
Steps in the Personal Selling Process
Qualifying involves identifying good customers and screening
out poor ones by looking at
• Financial ability
• Volume of business
• Needs
• Location
• Growth potential
The Personal Selling Process
Steps in the Personal Selling Process
Preapproach is the process of learning as much as possible
about a prospect, including needs, who is involved in the
buying, and the characteristics and styles of the buyers.
Objectives
• Qualify the prospect
• Gather information
• Make an immediate
sale
Approaches
• Personal visit
• Phone call
• Letter/e-mail
The Personal Selling Process
Steps in the Personal Selling Process
Approach is the process where the salesperson meets and greets the
buyer and gets the relationship off to a good start and involves the
salesperson’s:
• Appearance
• Opening lines
• Follow-up remarks
The Personal Selling Process
Steps in the Personal Selling Process
Presentation is when the salesperson tells the product story to the
buyer, presenting customer benefits and showing how the product
solves the customer’s problems.
Need-satisfaction approach is when buyers want solutions and
salespeople should listen and respond with the right products and
services to solve customer problems.
The Personal Selling Process
Steps in the Personal Selling Process
Recruiting and Selecting Salespeople
Good Traits
Good
listener
Empathetic
Honest
Dependable
Thorough
Follow-up
type
The Personal Selling Process
Steps in the Personal Selling Process
Handling objections is
the process where
salespeople
resolve
problems that are
logical, psychological,
or unspoken.
The Personal Selling Process
Steps in the Personal Selling Process
Closing is the process where salespeople should recognize
signals from the buyer—including physical actions,
comments, and questions—to ask for a order and finalize
the sale.
The Personal Selling Process
Steps in the Personal Selling Process
Follow-up is the last step in which the salesperson follows
up after the sale to ensure customer satisfaction and
repeat business.
The Personal Selling Process
Steps in the Personal Selling Process
Personal selling is transaction-oriented to close a
specific sale with a specific customer.
The long-term goal of personal selling is to develop a
mutually profitable relationship.
Video case
1. Teaching Medtronic sales reps about how defibrillators work is
an intensive process that can last up to two years. Which step in
sales force management is​ this?
Training salespeople
2. Medtronic sales reps sell various products in a specific
geography. Which type of sales force structure is​ this?
Territorial
3. What type of sales position does Dominic Demarino​ use?
Outside sales
4. Which stage of the personal selling process was Dominic in
when he learned that a new heart surgeon arrived at his largest
hospital in the state where the existing​contract, held by
a​ competitor, was up for​ renewal?
Prospecting and qualifying
5. Which stage of the personal selling process was Dominic in
when he was engaged in conversations with the doctors about
how his product worked and why it was​superior, leading him to
be invited to sit in on​ surgeries?
Presentation and demonstration
Sales Promotion
Sales promotion refers to the
short-term
incentives
to
encourage purchases or sales of a
product or service now.
Sales Promotion
Rapid Growth of Sales Promotions
• Product managers are under pressure to increase current
sales.
• Companies face more competition.
• Competing brands offer less differentiation.
• Advertising efficiency has declined due to rising costs, clutter,
and legal constraints.
• Consumers have become more deal-oriented.
Sales Promotion
Sales Promotion Objectives
• Setting sales promotion objectives includes using:
• Consumer promotions
• Trade promotions
• Business promotions
• Sales force promotions
Sales Promotion
Major Sales Promotion Tools
Samples offer a trial amount of a product.
Coupons are certificates that give buyers a saving when they
purchase specified products.
Rebates are similar to coupons except that the price reduction
occurs after the purchase.
Price packs offer consumers savings off the regular price of a
product.
Sales Promotion
Major Sales Promotion Tools
Premiums are goods offered either for free or at a low price.
Advertising specialties are useful articles imprinted with the
advertiser’s name, logo, or message that are given as gifts to
consumers.
Point-of-purchase promotions include displays and demonstrations that
take place at the point of sale.
Sales Promotion
Major Sales Promotion Tools
Contests, sweepstakes, and games give consumers the chance
to win something—such as cash, trips, or goods—by luck or
through extra effort.
• Contests require an entry by a consumer.
• Sweepstakes require consumers to submit their names for a
drawing.
• Games present consumers with something that may or may
not help them win a prize.
Event marketing or event sponsorship is creating a brandmarketing event or serving as a sole or participating sponsor
of events created by others.
Sales Promotion
Major Sales Promotion Tools
Discount
Allowance
Free goods
Specialty
advertising
Sales Promotion
Major Sales Promotion Tools
Conventions and trade shows are effective to reach many
customers not reached with the regular sales force.
Sales contests are effective in motivating salespeople or
dealers to increase performance over a given period.
Sales Promotion
Developing the Sales Promotion Program
• Size of the incentive
• Conditions for participation
• Promotion and distribution of the program
• Length of the program
• Evaluation of the program