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Unit 3: The Marketing Mix Chapter 15 What Is Promotion? Learning Goals State and explain the role of promotion and list three goals of promotion Describe how the communication process works in promotion Explain the difference between personal and non-personal promotion and provide examples for each Describe and give an example of each of the four elements of promotion Learning Goals Explain the AIDA promotional strategy Explain the push and pull promotional strategies Summarize the role of integrated marketing communications (IMC) in promotional activities Explain why the marketing concept is important in promotion Day 1 Response Journal Describe a memorable advertisement you saw or heard recently, by answering the below questions. 1. 2. 3. 4. What product or service was the ad for? What type of ad was it? Provide a brief description of the ad. Did this ad convince you to make a purchase? Why or why not? Knorr Sidekicks TV Commercial *** Save As Jan 14 in your Response Journal folder *** What Is Promotion? Promotion is one of the Four Ps of the marketing mix Promotion is the process of telling people about a product or the company that offers it Most people think of promotion as advertising and sales only However, promotion is much more than that Promotion Is Marketing Communication Promotion is communication from an organization to Its customers Its potential customers The public Marketing communication is another term for promotion Goals of Promotion The role of promotion is to help a business achieve its marketing goals The basic marketing goals of most businesses are to sell ___________ Products and make a _________ Profit Promotion; a) Informs b) Expresses c) Persuades a) Informs Businesses want to keep customers informed about; New products Existing products New features on existing products How to use or assemble products Safety issues Charities and cultural organizations the business supports Community events that the business sponsors a) Informs There is another important aspect of informing is to ____________ Remind Businesses know that if a product has been on the market for a while, customers may lose interest, forget, or be drawn to a competitor's product Companies use promotion to continually remind you about their products Canadian Tire – A Bike Story Commercial b) Expresses Promotional messages use words, pictures, colour and music to express and entertain Promotional messages are designed to; Attract customer attention Create demand Messages that entertain or create emotion are more likely to be remembered c) Persuades _____________ Persuasion is the use of logic, argument, or pleading to get another person to agree with you or act in a certain way The ultimate goal of promotion is to persuade people to buy the product Promotional messages persuade people to buy through the use of information, reminders, expression, and entertainment c) Persuades A promotional message might persuade you to buy a product, if the message did the following: Informed you about how the product meets your needs Provided a reminder that was timely Used expressive elements that made an impression • Left you with a good feeling about the company and its product(s) The Communication Process Promotion takes place through the communication process In promotion… The marketer is the sender The target market is the receiver Marketers must encode the promotional message so that the target market can decode and understand it An important part of developing the promotional message is choosing the best medium for the message Choices include salespeople, TV, radio, newspapers, magazines, mail, billboards, flyers, and the Internet The Communication Process Noise Noise can interfere with promotional messages, just the same way noise can interfere with any communication Noise can include; Physical noise Technical problems External distractions Internal distractions One of the major sources of noise is the sheer number of promotional messages that each person is exposed to every day Estimates of the number of promotional messages each person encounters range from 500 to thousands every day Noise Marketers cannot control the environment where marketing messages are received However, they do have two methods to try to counteract these distractions; Repeat the same message many times Make the message stand out from all others Feedback Once the message reaches the receivers (target market), they decode, understand, and act on (or ignore) the message So, how do marketers determine whether a promotion message was effective? Effective promotion is promotion that achieves its __________ Goals • The most obvious sign of effective promotion is an increase in sales • Promotion can also be effective if it increases product awareness or improves the image of the company Feedback Marketers need feedback to determine whether a promotional message was effective Customer feedback can be obtained by; Monitoring sales Performing market research If the message is found to be ineffective, the marketer might adapt the message and try again Types of Promotion Promotion can be categorized based on; The target market Is the company’s target market other businesses (B2B) or consumers (B2C) What is being promoted Organizations can promote one of two aspects of the business ___________________ Product Promotion is marketing communication that focuses on selling a product _______________________ Institutional Promotion is marketing communication that focuses on the image of the organization • Goal: to give you positive feelings about the organization • The marketers hope that by showing you how wonderful their organization is, that when you see a product promotion, you might be more likely to pay attention to it Types of Promotion The four elements of promotion a) Personal selling b) Advertising c) Sales promotion d) Public relations B2B, B2C, institutional and product promotions use all four elements These elements fall into two categories; 1. Personal promotion 2. Nonpersonal promotion Day 1 Assigned Work Students please complete the following; K&U Questions #6, 7, 9 & 10 on page 231 Thinking Questions #1 & 2 on page 232 Application Question #3 on page 232 ***Save As Ch 15 Day 1 in your Unit 3 folder*** Day 2 Response Journal Name a product that you would like to buy. Describe what you know about the product and the business that manufactures or sells it. How did you get this information? *** Save As Jan 15 in your Response Journal folder *** Types of Promotion As explained on Day 1, promotion is either personal or nonpersonal ______________________ occurs directly between Personal Promotion customer and marketer Personal selling is the only element _______________________communicates the Nonpersonal Promotion same message to the entire target market Includes advertising, sales promotion and public relations There is no interaction between the marketer and the target market at the time the message is sent and received Mass communication and the mass media are used to send nonpersonal promotion Personal Promotion - Personal Selling The seller communicates directly with the buyer The main feature of personal selling is that the seller can customize the message, based on the immediate response (feedback) from the customer Personal selling can occur; Face to face Over the phone Over the internet • If the customer and seller interact in real time Used in both B2C and B2B sales Nonpersonal Promotion Advertising ______________ Advertising is nonpersonal promotion paid for by an identified sponsor Advertising includes; Print ads Newspaper and magazine Commercials TV and Radio Internet ads Outdoor advertising Billboards, transit ads, etc. Direct marketing Sales flyers, email ads, etc. Nonpersonal Promotion – Sales Promotion ____________________ consists of Sales Promotions marketing activities designed to entice customers to buy a company’s products Examples include; coupons, contests, free samples, free gifts, etc. All sales promotions have the goal of getting the customer to buy the product Most sales promotions are short-term activities Used by both B2C and B2B Nonpersonal Promotion – Sales Promotion B2C sales promotion activities are designed to create excitement about the product or the company that offers it B2C sales promotion include; Visual merchandising Coupons and rebates Free samples Premiums Contests and sweepstakes Promotional tie-ins Product placement Product Placement Video Clip Nonpersonal Promotion Sales Promotion Another term for B2B sales promotion is trade promotion The purpose of trade promotion is to get members of the distribution channel to buy the product, and then sell it to the next member of the channel B2B sales promotion include; Trade shows Trade allowances Point-of-purchase advertising Sales incentives Nonpersonal Promotion – Public Relations ___________________ consists of Public Relations promotional activities designed to create goodwill between a company and the public Creating a positive image of the company and its products often influences people to buy products from the company The main functions of public relations is ______________ and ___________________ Philanthropy Publicity Nonpersonal Promotion – Public Relations There are two types of public relations; 1. Proactive Public Relations Communications initiated within the company for the purpose of image building Includes providing information on new products, developing and running charitable events, and sponsoring sporting and cultural events 2. Reactive Public Relations Communications in response to negative events or damaging information Reactive public relations is used when the media covers an accident caused by a company's product, for example SUV rollover accidents Maple Leaf Foods Apology Nonpersonal Promotion – Public Relations _______________ is information about a Publicity company and its products that appears in the media Publicity is different from advertising in that the company does not pay the media to carry the message However, the company often has no control over article or story content Nonpersonal Promotion – Public Relations The main tools of publicity are; Press release A press release is a story about the company that the public relations specialist writes and sends to the media Press kit A press kit consists of information about the company and its products Press conference A press conference is a meeting called by a business to which the media is invited Nonpersonal Promotion – Public Relations _________________ is any actions that improve Philanthrophy human welfare and spread goodwill Includes supporting a charity, sport, or cultural activity The public relations department makes the sure the public knows about these activities Potential customers will feel good about a company that supports causes they care about One example of philanthropy is shown by Air Canada and Aeroplan. Together these companies provide Aeroplan miles to 15 pediatric hospitals across Canada. This means that children who need medical treatment outside their community can travel to receive it - along with their parents or caregivers - without cost Review - Four Elements of Promotion The four elements of promotion include; 1. Personal selling Personal promotion 2. Advertising Nonpersonal promotion 3. Sales promotion Nonpersonal promotion 4. Public relations Nonpersonal promotion Day 2 Assigned Work Students please complete the following; Types of Sales Promotion Worksheet Handout provided Day 3 Response Journal Who is the target market for this ad? Why is this ad an example of nonpersonal promotion? ***Save As Jan 18 in your Response Journal folder*** AIDA: The Basic Promotional Strategy How do promotional efforts work? By following the customer's decision process In Ch 6, you learned that customers go through a sixstep decision process 1. 2. 3. 4. 5. 6. Awareness Information search Evaluation of options Decision to buy Purchase Evaluation At each step of the decision process, the customer either needs information or is open to suggestions AIDA: The Basic Promotional Strategy The basic promotional strategy is often referred to as ________ AIDA These letters stand for each of the four steps in the strategy; Attention Interest Desire Action A fifth step, evaluation, is not actually part of the strategy but is a very valuable part Attention Step 1 Attract the customer’s attention. Before a promotion can have any effect, it must have the customer's attention Techniques; Ask an intriguing question Offer something for free Shock the receiver Flatter the receiver Use music, colour, light, design, movement, and size Use repetition Interest Step 2 Activate interest in the product. Promotions achieve this by providing information Techniques; Appeal to customer’s needs Create needs in customers • Based on Maslow's hierarchy of needs, marketers design promotions that appeal to people's needs for belonging, friendship, popularity, or prestige Demonstrate the product Display the product Provide information about the product Desire Step 3 Create desire and demand. The product can be offered as a way to satisfy the need The words of the promotional message can show how the product will satisfy the need or solve the problem Techniques; Encourage potential customers to try the product Offer sales promotions • Free samples, coupons, rebates, etc. Desire Use personal selling • Clothing retailers provide dressing rooms for customers • Car salespeople want you to test drive the car to give you a sense of ownership An important part of creating desire is building credibility for the product _______________ is the belief that the product Credibility will meet your needs or solve a problem For example, in advertisements for weight-loss systems, people who have used the product are often shown before and after they lost weight, thus lending credibility to the product Action Step 4 Motivate the customer to take action. To buy your product Techniques; Marketers often work in messages that explicitly urge the customer to buy • A message that motivates action is a call to action • E.g. “buy now while supply lasts” and “sale ends today,” The action step in personal selling is called the __________ Close Evaluation Step 5 Evaluation. A critical part of developing effective promotional strategies Marketers gather feedback from customers, which is then analyzed to determine whether customers were satisfied Some businesses try to determine satisfaction immediately E.g. salespeople will ask the customer questions at the close of the sale Others make follow-up phone calls or send thank-you letters The Decision Process & AIDA Pull and Push Strategies Two other popular promotional strategies are; Pull strategy Push strategy Pull Strategy In a pull strategy, promotional efforts are focused on the ____________ Customer Accomplished primarily through advertising to customers to create demand A B2C strategy Consumers see advertisements for the product. They go to the store expecting to find the product. If the product is not available, they ask for it This customer demand often causes the retailer to contact the wholesaler or manufacturer to increase the product order Consumer demand ________ Pulls the product through the supply chain Push Strategy In a push strategy, promotional efforts are Wholesalers ___________, Distributors focused on the ____________, and ____________ Retailers In other words, a company directs its promotion at the intermediaries in the channel of distribution These intermediaries buy the product, then promote it to the next link in the supply chain The last link, the retailer, promotes it to the consumer • B2B strategy Push the product through the Intermediaries ______ supply chain Pull & Push Strategy Companies often use both strategies to better promote their products After its initial introduction, manufacturers use both the pull strategy and the push strategy to continue the promotion of their products The combination push/pull strategy is used more often than either the push or pull strategy separately The Marketing Concept and Promotion Promotion has been criticized for manipulating people into buying things that they do not really want or need Deceptive advertising not only makes customers angry, it is also illegal However, marketers that follow the marketing concept do not run into these sorts of problems The ______________________ is an approach to Marketing Concept business that says the way to make a profit is to focus on customer satisfaction Creating customer satisfaction is more effective than manipulation or deception Effective promotional activities should be designed with the needs and wants of customers in mind Integrated Marketing Communications The marketing mix is like a puzzle If all the pieces do not fit together, the puzzle will never be complete To complete the marketing mix puzzle, it is important to use integrated marketing communications (IMC) Integrated Marketing Communications ________________________________ is a process designed to convey a single, unified message through all promotional activities This includes online and off-line marketing activities Integrated Marketing Communications Online marketing includes; E-marketing campaigns E-mails Pay-per-clicks Web banners Webinars Blogs Podcasts Internet TV Integrated Marketing Communications Off-line marketing includes; Print (TV and magazine) Direct mail Billboards Radio/television Public relations Sales promotions Packaging Sponsorships Exhibits Day 3 Assigned Work Students please complete the following; K&U Question #16 on page 231 Thinking Questions #4 & 6 on page 232 Imagine that you are opening a new teenoriented clothing store at Conestoga Mall What would you do to attract attention to your store? What personal promotions would you use? What nonpersonal promotions would you use? ***Save As Ch 15 Day 3 in your Unit 3 folder***