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CHAPTER TWELVE MARKETING COMMUNICATION AND PERSONAL SELLING Prepared by Jack Gifford Miami University (Ohio) © 2001 South-Western College Publishing 1 THE ROLE OF PROMOTION IN THE MARKETING MIX Promotion is communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence their opinions or elicit a response © 2001 South-Western College Publishing 2 PROMOTIONAL STRATEGY Optimal use of the elements of promotion Consistent with the overall goals of the marketing mix A coordinated plan An integral part of the marketing strategy for reaching the target market © 2001 South-Western College Publishing 3 PROMOTION: COMMUNICATION WITH A PURPOSE Promotion is communication used by marketers to inform, remind, and/or persuade potential buyers through…. Advertising Personal selling Publicity Public Relations © 2001 South-Western College Publishing 4 THE PROMOTIONAL MIX Inform, persuade remind Flexible Bi-directional Interpersonal Feedback Relationship building PERSONAL SELLING Person-toperson dialogue between buyer and seller Purpose & Advantages Disadvantages Expensive Time consuming © 2001 South-Western College Publishing 5 THE PROMOTIONAL MIX ADVERTISING Non-personal Paid Identified sponsor Indirect Uniform message (some ability to now customize in interactive electronic media) Communicate to large numbers of people Low cost per contact Multiple media options © 2001 South-Western College Publishing 6 THE PROMOTIONAL MIX SALES PROMOTIONS Time specific Provide incentives for purchase behavior Not routine events Aimed at customers, salespeople, or channel members Coupons Free goods with purchase Prizes or contests Trips Fashion shows Channel member displays or training © 2001 South-Western College Publishing 7 THE PROMOTIONAL MIX PUBLICITY / PUBLIC RELATIONS Unpaid message Less control over content Always involves a third party Higher level of credibility More factual than persuasive Can be positive or negative Frequently orchestrated by the marketer Systematically planned and distributed to media © 2001 South-Western College Publishing 8 MARKETING COMMUNICATIONS Communication IS THE PROCESS by which we exchange or share meanings through a common set of symbols. Interpersonal communication: Direct face-to-face communications between two or more people Mass communications: Communicating to a large audience, usually through a mass medium © 2001 South-Western College Publishing 9 THE COMMUNICATION PROCESS Source Encoding Feedback Noise Receiver Decoding © 2001 South-Western College Publishing Message Channel 10 THE COMMUNICATION PROCESS ENCODING THE MESSAGE Words Sounds Colors Space Themes Symbols Pictures Numbers Gestures Movement © 2001 South-Western College Publishing 11 THE COMMUNCATION PROCESS ENCODING THE MESSAGE Channel or Medium DECODING © 2001 South-Western College Publishing Words Sounds Colors Space Themes Symbols Pictures Numbers Gestures Movement 12 THE COMMUNICATION PROCESS To determine the successful matching of encoding to decoding, marketers must receive feedback from the receiver in terms of action of a measurable change in mental state or attitude. © 2001 South-Western College Publishing 13 THE COMMUNICATION PROCESS OBJECTIVE ENCODING = DECODNG © 2001 South-Western College Publishing 14 INTEGRATED MARKETING COMMUNICATIONS (IMC) Ideally, marketing communications from each promotional mix element (personal selling, advertising, sales promotions, public relations) should be integrated. The message reaching the target consumer(s) should be the same regardless of whether it is from an advertisement, a salesperson in the field, a magazine article, or a coupon in a newspaper insert. © 2001 South-Western College Publishing 15 INTEGRATED MARKETING COMMUNICATIONS (IMC) Marketing managers must carefully work out the roles the various promotional elements will play in the marketing mix. Timing of promotional activities are coordinated and the results of each campaign are carefully monitored to improve future use of the promotional mix tools. Perfect Promotional Mix © 2001 South-Western College Publishing 16 THE GOALS AND TASKS OF PROMOTION: INFORM Inform A better mousetrap is of limited value unless consumers know that it exists, where it can be purchased, the price, and product details. Essential for the existence of a free enterprise system Results in an improved standard of living © 2001 South-Western College Publishing 17 THE GOALS AND TASKS OF PROMOTION: INFORM Inform (CONTINUED) Increase brand awareness Explaining how a product works Suggesting new uses for a product Building a company image © 2001 South-Western College Publishing 18 THE GOALS AND TASKS OF PROMOTION: PERSUADE Promotion persuades Persuasion that encourages purchases or changes attitudes is a primary goal of promotion Influence customers to buy now Persuading customers to call © 2001 South-Western College Publishing 19 THE GOALS AND TASKS OF PROMOTION: REMIND Promotion Reminds Maintain store or brand loyalty Combat competitor’s persuasive messages Increase product awareness and usage Reminding customers where to buy the product “You’re in good hands with……” “We’re ready when you are.” © 2001 South-Western College Publishing 20 PROMOTIONAL GOALS AND THE AIDA CONCEPT Attention Interest Desire Action Steps The AIDA concept assumes that promotion propels consumers along these steps in the decision process. ACTION DESIRE INTEREST ATTENTION © 2001 South-Western College Publishing 21 FACTORS AFFECTING THE PROMOTIONAL MIX Nature of the product Stage in the Product Life Cycle Target market Characteristics Type of buying decision Available funds Push vs Pull strategies © 2001 South-Western College Publishing Business or consumer product? Costs and risks associated with purchase? Convenience, shopping or specialty good? 22 FACTORS AFFECTING THE PROMOTIONAL MIX Nature of the product Stage in the Product Life Cycle Target market Characteristics Type of buying decision Available funds Push vs Pull strategies © 2001 South-Western College Publishing Introduction = informational Growth & maturity = persuasive and brand Maturity = reminder and persuasive Decline = limited promotion of any kind 23 FACTORS AFFECTING THE PROMOTIONAL MIX Nature of the product Stage in the Product Life Cycle Target market Characteristics Type of buying decision Available funds Push vs Pull strategies Level of product knowledge Degree of brand loyalty Geographical dispersion Commonality of behavioral characteristics © 2001 South-Western College Publishing 24 FACTORS AFFECTING THE PROMOTIONAL MIX Nature of the product Stage in the Product Life Cycle Target market Characteristics Type of buying decision Available funds Push vs Pull strategies © 2001 South-Western College Publishing Routine or complex buying decision Automatic rebuy or new purchase task Level of personal or professional involvement 25 FACTORS AFFECTING THE PROMOTIONAL MIX Nature of the product Stage in the Product Life Cycle Target market Characteristics Type of buying decision Available funds Push vs Pull strategies © 2001 South-Western College Publishing Promotional budget may dictate possible parameters Optimize return on promotional dollars Minimize costs per contact dollar generated 26 FACTORS AFFECTING THE PROMOTIONAL MIX Nature of the product Stage in the Product Life Cycle Target market Characteristics Type of buying decision Available funds Push vs Pull strategies © 2001 South-Western College Publishing 27 PUSH AND PULL STRATEGIES Promotion may be aimed at the final consumer or a channel member •PULL Promote to final consumer; encourage them to ask their local retailers to carry the good •PUSH Promote to channel members to gain distribution; promise promotional support and strong final consumer demand © 2001 South-Western College Publishing 28 PERSONAL SELLING Is direct communication between a sales representative and one or more prospective buyers in an attempt to influence each other in a purchase situation Generally becomes more important As the number of customers decreases As the complexity of the product increases As the value of the product grows Relationship selling (consultative selling) involves multi-stage selling and personalization over the long-term © 2001 South-Western College Publishing 29 STEPS IN THE SELLING PROCESS Also referred to as the sales process or sales cycle Is simply a set of steps a salesperson goes through to sell a particular product or service Some of these steps are very quick, while others take months. This is also true of the entire sales cycle. These steps are... © 2001 South-Western College Publishing 30 THE SALES CYCLE Generating leads Qualifying leads Approaching the customer and probing needs Developing and proposing solutions Handling objections Closing the sale Following up © 2001 South-Western College Publishing 31 SALES MANAGEMENT Defining sales goals and the sales process Determining the sales force structure Recruiting and training the sales force Motivating and compensating the sales force Evaluation of the sales force © 2001 South-Western College Publishing 32