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Promotion Strategy Promotion Any form of communication a business/organization uses to inform, persuade, or remind people about its products or services. Types of Promotion: o o o o Advertising Public Relations (PR) & Publicity Sales Promotion Personal Selling Advertising Paid form of non-personal presentation of ideas, goods, or services directed toward a mass audience by an identified sponsor Two Types: o Print Media: • Newspapers, magazines, direct mail, outdoor (billboards), transit (ads on buses or subways) o Broadcast Media: • Radio, television, Internet web sites Public Relations & Publicity PR: any activity designed to create a favorable image toward a business, its products, or its policies o News release, press kits Publicity: The placement of newsworthy items about a business, new products, or employees in the media Sales Promotion Use of short-term incentives or interest-building marketing activities to stimulate traffic and encourage the buying of a product or service o Increase sales Business to Business o Slotting Allowances: manufacturer pays retailer for costs involved in placing a new product on shelves o Buying Allowances: price discount given by manufacturers to wholesalers and retailers to encourage the purchase of a product o Trade Shows & Conventions: designed to reach wholesalers and retailers • Introduce new products or increase sales of existing products o Sales Incentives: financial awards given to managers or employees who reach or exceed sales quotas Sales Promotion Cont. Business to Consumer: o Premiums: low-cost items given to consumers at a discount or for free. • Designed to increase sales, attract new customers, and persuade nonusers to switch brands o Sponsorship: promotion of a company in association with a property, event, or group o Incentives: create customer excitement and increase sales. • Include sweepstakes, contests, and rebates o Product Samples: free trial size of a product o Promotional Tie-Ins: involve sales promotional arrangements between one or more retailers o Product Placement: the strategic placement of an item will increase or enhance public knowledge o Visual Merchandising/Displays: coordination of all physical elements in a place of business so that it projects the right image to its customers o Loyalty Marketing Programs: reward customers for making multiple purchases Promotion Cont. Personal Selling: Consists of oral presentations to one or more potential buyers with the intent of making a sale Promotional Mix: refers to the combination of different types of promotion o A business decides on the promotional mix that will be most effective in persuading potential customers to purchase and support its products • Wholesalers, retailers, and/or consumers Promotion Policy Push Policy: when a manufacturer is trying to “push” a product through a channel of distribution o Main purpose: to convince a retailer to stock a product o Relies heavily on personal selling and sales promotion, esp. at trade shows Pull Policy: designed to create consumer interest o Consumer demand can “pull” or encourage retailers to carry a product o Relies heavily on advertising geared towards consumers in addition to premiums, samples, and demonstrations Promotion Plan Process o Keep in mind your Target Market and the 4Ps Determine marketing objectives Determine your promotional budget Determine your promotional mix (what) Create your plan (who, when) Execute your promotional plan Evaluate your plan & readjust accordingly Example Marketing Objective o Create awareness of baby care products among mothers of newborns Promotional Budget o $100,000.00 Promotional Mix o Advertise in national baby care and motherhood magazines o Distribute product samples to major obstetricians’ offices in major urban areas o Offer free baby care seminars to expectant mothers at major hospitals o Provide free samples to maternity wards at major hospitals Publicity Placement of newsworthy items about a business, new products, or employees in the media o An act designed to attract public interest o Information with news value issued as a means of gaining public attention or support o Involves creating demand for a business or product by placing news about it in publications, radio, television, or another form of media o It is not paid for Publicity The principal function of publicity is “building an image” o Image: the way a business or organization is defined in people’s minds Publicity can be positive or negative Advantages vs. Disadvantages Major Advantages of Publicity: o People are more likely to pay attention to news stories than to advertisements • News reporters and newspapers are viewed as more objective than advertisers Major Disadvantages of Publicity: o A business gives up control over their message • The content and how it is presented Public Relations The business of inducing the public to have understanding for and goodwill toward a person, firm, or institution o An individual or group of people who serve as public spokespeople for an individual or an organization • They relate information to the public The right kind of public relations can create a positive image for a company and maintain or improve that image within the community o Example: sponsoring cultural events (concerts or art exhibits) o Awarding scholarships to a local high school o Donating equipment for public use Public Relations Refers to any activity designed to create goodwill towards a business The goodwill benefits a business by: o Increasing sales o Reinforcing the firm’s good reputation o Increasing the receptivity of consumers to the firm’s advertising o Conditioning customers to expect quality products from the firm Public Relations Specialists These specialists attempt to get good publicity for their companies by creating news events Examples: o o o o o o The opening of a new store An interview with a company official Launching of a new product Presentation of an award to an employee A community activity that is sponsored by the business A charitable activity that the business participates in What Advertising Can Do for your Business Remind customers and prospects about the benefits of your product or service Establish and maintain your distinct identity Enhance your reputation Encourage existing customers to buy more of what you sell Attract new customers and replace lost ones Build sales slowly Promote your business to customers, investors, and others What Advertising Can’t do for your Business Create an instant customer base Solve cash flow or profit problems Substitute for poor or indifferent customer base Sell useless or unwanted products/services Advertising Pros You have complete control. o You determine exactly where, when, and how often your message will appear, how it will look, and what it will say o You can target your audience more readily o You can aim at very specific geographic areas You can be consistent, presenting your image and sales message repeatedly to build awareness and trust o A distinctive identity will eventually become clearly associated with your company o Customers will recognize you quickly and easily Advertising Cons It takes planning o Advertising works best and costs less when planned and prepared in advanced It takes time and persistence o The effectiveness of your advertising improves gradually over time • Customers don’t see every one of your ads o You must repeatedly remind prospects and customers about the benefits of doing business with you • The long-term effort triggers recognition and helps special offers or direct marketing pay off Advertising vs. Public Relations Advertising Public Relations Space or time in the mass media must be paid for Coverage in mass media, if any, is not paid for You determine the message Interpretation of the message is in the hands of the media You control the timing Timing is in the hands of the media One-way communication o Using the mass media does not allow feedback Two-way communication o The company should be listening as well as talking & the various PR venues often provide immediate feedback Advertising vs. PR Cont. Advertising Public Relations Message sponsor is identified Message sponsor is not overtly identified The intention of most messages is to inform, persuade, or remind The intention is often to create good will, keep company in front of the public, or to humanize a company o With the intent of making a sale The public may view the message negatively, recognizing advertising as an attempt to persuade or manipulate The public often sees PR messages that have been covered by the media as more neutral or believable Advertising vs. PR Cont. Advertising Public Relations Very powerful at creating an image Can also create image, but sometimes stray from how it was originally intended Writing style is usually persuasive, can be creative, often taking a conversational tone Writing style relies heavily on journalism talents o May even be grammatically incorrect o Any persuasion is artfully inserted in the fact-based content Effective Selling Selling: helping customers make satisfying buying decisions by communicating how products and their features match customers’ needs and wants Goals of selling: o Help customers decide on purchases • Sometimes educating customers on products o Ensure customer satisfactions • Happy customers mean repeat business Selling is a broad concept and can take place inside or outside a firm Inside vs Outside Selling Inside Sales o Selling efforts that take place at the salesperson’s place of business (i.e. retailers) Outside Sales o Selling efforts that take place outside the salesperson’s place of business (i.e. door-to-door salespeople) Insurance agents or real estate agents may sell their consumer services through inside or outside sales efforts The Selling Process Prospecting (finding potential customers) The pre-approach (gathering info about potential customers) The approach (why would a potential customer want to listen to you?) The sales presentation (presenting to the potential customer) Handling objections (responding to concerns) The close (the handshake & agreement) The departure and follow-up (how you deal with the potential customers next) The Selling Process Prospecting: the process of finding potential customers who could benefit from and buy a good/service o Potential customers are prospects Gathering and analyzing information about the prospect and using it to construct the sales presentation is the pre-approach The Selling Process The way the salesperson enlists the prospect’s willingness to hear more about a product is the approach. o The approach is made to gain an interview and make the sales presentation o Examples: • • • • Telephone call to a business at a time, day, week, etc. Using a business card Direct mail Personal visit During the sales presentation, the salesperson demonstrates or explains the product and attempts to build a desire for ownership within the prospect The Selling Process An objection is an honest difference between the customer and the salesperson Example of an objection: o “I like your product, but I don’t think the school can afford it right now” o Salesperson could respond by stressing the benefits of immediate ownership, while also explaining the various credit plans offered The Selling Process The close is the completion of the sale o Avoid pressure o Call again o Suggest additional purchases (of same item or related/additional items) The departure and follow-up o thank prospect o Show appreciation for prospect’s time and attention o A good salesperson is always interested in future business and sales After each sales call—examine reasons for success or failure. Follow a Product— Promotion Strategy Discuss the different aspects of your promotion strategy: o What forms of advertising will you use: • Print media • Broadcast media o Will there be any form of publicity or PR? o What types of sales promotions will be used?