Download SEMI 5.03 PowerPoint Presentation

5.03 Coordinate
promotional activities.
Promotional mix
The combination of all types of communication
and a cost-effective allocation of resources
used by a business to inform, persuade, or
remind consumers about a company and/or
its products.
• Advertising
• Sales promotion
• Public relations
• Personal selling
• Direct marketing
2
Advertising
Any paid form of nonpersonal presentation of
ideas, goods, or services made by an
identified sponsor.
• Low cost per contact
• Repeatedly reaches many people over a
large area
• Advertiser controls content, frequency, and
choice of media vehicle
• Expensive total cost
• May not reach the targeted audience
• Provides only one-way communication
3
Sales promotion
“All marketing activities, other than
personal selling, advertising, and
public relations, that are used to
stimulate purchasing and sales.” (AMA)
• Generates immediate short-term sales
• Supports other parts of the promotional
campaign
• Expensive
• Company may lose money
4
Public relations
Activities to build rapport with
the company’s various publics
by obtaining favorable
publicity, building a good
corporate image, and handling
or heading off unfavorable
rumors, stories, and events.
• Low cost or free
• Credible
• Not always controlled by the
business
• If negative, can be destructive
5
Personal selling
Personalized, two-way communication
between the sales staff and the
customer designed to complete sales
and build customer relationships.
• Person-to-person interaction
• Immediate feedback
• Most expensive promotion
per contact
• May not result in a sale
6
Direct marketing
Direct communication with carefully targeted
individual consumers to obtain an immediate
response and to cultivate lasting customer
relationships.
• Reaches the targeted group(s)
• Can customize promotion and products to the
target market
• Technology failure or interruptions
• Public resentment of the invasion of privacy
7
Integrated marketing
communications (IMC)
The concept under which a company
carefully coordinates its promotional
mix elements to communicate a clear,
consistent, and compelling message
about the organization and its products.
• Utilizes a well-planned single strategy
• Clearly shows how customers’ problems
can be solved by the company and its
product(s)
8
Integrated marketing
communications (cont.)
• Improves the customer relationship
over time through effective
communications management
• Reduces or eliminates the confusion
that results when the various types of
communications send conflicting
messages
9
Integrated marketing
communications (cont.)
• Blends the promotion tools into a
coordinated promotional mix
– Considers the advantages and
disadvantages of each promotional mix
element
– Often uses a different promotional mix
strategy for each segment of the
distribution channel
10
Integrated marketing
communications (cont.)
• Promotion mix strategies
– Push strategy: A promotion
strategy that calls for using
the sales force and trade
promotion to push the product
through channels.
• The producer promotes the
product to wholesalers, the
wholesalers promote to retailers,
and the retailers promote to
consumers.
11
Integrated marketing
communications (cont.)
• Promotion mix strategies
– Pull strategy: A promotion strategy that calls
for spending a lot on advertising and
consumer promotion to build up consumer
demand.
• If the strategy is successful, consumers ask
retailers for the product, the retailers ask the
wholesalers, and wholesalers buy from the
producers.
12
MANAGEMENT OF
PROMOTION
• Responsibilities
– Determine the mix.
– Establish the budget.
– Allocate the resources.
– Coordinate the campaign.
– Supervise an outside resource.
– Evaluate the results.
13
MANAGEMENT OF
PROMOTION (cont.)
• Kinds of decisions required
– What schedule to follow for promotions
– How frequently to run advertisements
– Whether to use sales demonstrations in
stores and/or product demonstrations in
trade or consumer shows
– Whether to communicate directly with each
consumer or to use impersonal messages
to a mass audience
– What kind of information to communicate
14
MANAGEMENT OF
PROMOTION (cont.)
• Factors that influence decisions
– Type of product
– Product price
– Total company budget for promotions
– How to divide the budget across the mix
– What promotion competitors are using
– What information consumers need to make
a buying decision
– Consumer characteristics
15
Planning the
advertising
campaign
1. Identify the target audience.
2. Determine the advertising objectives.
3. Calculate the expected/required return
on investment.
4. Set the advertising budget.
5. Develop the advertising strategy.
6. Evaluate the advertising campaign.
16
Planning the advertising
campaign (cont.)
► Determine the advertising objectives.
• Advertising objective: A specific
communication goal to be accomplished
with a specific target audience during a
specific period of time.
–
–
–
Informative advertising. Used to introduce a
new product or provide other informational
messages
Persuasive or comparative advertising. Carries
the risk of starting a “war” which neither
competitor can win
Reminder advertising. Used to maintain
attention to mature products
17
Planning the advertising
campaign (cont.)
► Calculate the expected/required return
on investment.
•
•
(Increase in sales ÷ the amount of
investment) X 100 = percent of return on
investment.
An advertising event that will not
accomplish required return should not be
implemented.
18
Planning the advertising
campaign (cont.)
►Set the advertising budget.
•
•
Affordable method: A process of setting
the promotion budget at the level
management thinks the company can
afford.
Percentage-of-sales method: A process
of setting the promotion budget at a
certain percentage of current or
forecasted sales or as a percentage of
the unit sales price.
19
Planning the advertising
campaign (cont.)
Set the advertising budget.
•
•
(cont.)
Competitive-parity method: A process of
setting the promotion budget to match
competitors’ spending.
Objective-and-task method: A process of
setting the promotion budget by defining
specific objectives, determining the tasks
that must be performed to achieve these
objectives, and then estimating the costs
of performing these tasks. The sum of
these costs is the proposed promotion
budget.
20
Planning the advertising
campaign (cont.)
►Develop the advertising
strategy.
•
Create the advertising
message.
•
•
•
•
Headline
Copy
Illustrations/video
Sponsor identification
21
Planning the advertising
campaign (cont.)
Develop the advertising strategy. (cont.)
•
Select appropriate advertising media.
•
•
•
•
•
•
Reach: A measure of the percentage of the
people in the target market who are
exposed to the ad campaign during a given
period of time.
Frequency: A measure of how many times
the average person in the target market is
exposed to the message.
Media impact: The qualitative value of a
message exposure through a given media.
Choose among major media types.
Select specific media vehicles.
Decide on media timing.
22
Planning the advertising
campaign (cont.)
►Evaluate the advertising
campaign.
• Have consumer opinions changed?
• How do past sales and
expenditures compare with current
sales and expenditures?
23
Planning for sales promotion
activities
1. Review sales promotion
objectives.
2. Use sales promotion tools.
3. Develop the sales
promotion program.
24
Planning for sales promotion
activities (cont.)
2. Use sales promotion tools.
•
Consumer promotion tools
•
•
•
•
•
•
•
•
•
•
Samples
Coupons and rebates
Price packs and special “deals”
Premiums
Advertising specialties
Patronage rewards
Point-of-purchase (POP) promotions
Contests, sweepstakes, games
Product placement
Sponsorships
25
Planning for sales promotion
activities (cont.)
2. Use sales promotion tools.
(cont.)
•
Trade promotion tools
•
•
•
•
•
•
Discounts
Promotional allowances
Slotting allowances
Cooperative advertising
Free goods
Specialty advertising items
26
Planning for sales promotion
activities (cont.)
2. Use sales
promotion tools.
(cont.)
•
Business
promotion tools
•
•
Conventions and
trade shows
Sales contests
27
Planning for sales promotion
activities
3. Develop the sales promotion
program.
•
•
•
•
•
Determine the size of the incentive.
Set conditions for participation.
Determine the length of the
promotion.
Carry out the program.
Evaluate the program.
28
Planning for public relations
opportunities
1. Consider which
functions to
emphasize.
2. Consider the role
and impact of
public relations.
3. Use major public
relations tools.
29
Planning for public relations
opportunities (cont.)
1. Consider which functions to
emphasize.
•
•
•
•
•
•
Press relations to attract
attention through the media
Product publicity
Public affairs to build
community relations
Lobbying to influence legislation
and regulation
Investor relations
Development to gain financial or
volunteer support
30
Planning for public relations
opportunities (cont.)
3. Use major public
relations tools.
•
•
•
•
•
•
•
Speeches
Special events
Mobile marketing
Written materials
Audiovisual materials
Corporate identity
materials
Public service activities
31
Planning for direct marketing
approaches
• Direct mail and fax
advertising
• E-mail and Internet
advertising
32
Planning for personal selling
• Sales staff
training
• Procedures for
maintaining
sales staff
awareness of
current
promotions
33