Download Promotion IB Business and Management Sha Tin College Business Education Department

Promotion
IB Business and Management
Sha Tin College Business Education Department
Promotion Quotes
“There is a great deal of advertising that is much better
than the product. When that happens, all that the good
advertising will do is put you out of business faster.”
~ Jerry Della Femina (advertising guru)
“Doing business without advertising is like winking at a
girl in the dark. You know what you are doing, but
nobody else does.”
~ Stuart Henderson Britt, Advertising consultant, 1970
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Promotion
 What is promotion?
 Why do companies need
promotion?
 Why do consumers need
promotion?
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Communicating a
message to a
potential customer
with intention of
increasing sales
Fact…
The producers of the first Spider-Man movie spent
US$50 million on its marketing campaign in 2002.
Can this spending be justified?
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Because it’s worth it…
“Advertising is not money down the drain it is an investment in the future of your
brand.”
~ Stelios Haji-Loannou (founder of easyJet and the
easyGroup)
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Objectives of Promotion
 Inform
 Persuade
 Remind
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Types of Promotion
 Above-the-line
 Below-the-line
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Above the line promotion
Above the line promotion (ATL) refers to any form of
paid-for promotional technique through independent
consumer media, such as:
Television
Radio
Cinema
Magazines
Billboards
Newspapers
Internet
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Above the line (cont’d)
 Due to the potentially large audience number, above
the line promotions can reach a huge number of
customers , but…
 This comes at a cost… “Time is money, especially
when you are talking to a lawyer or buying a
commercial.” ~ Frank Dane
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Advertising Media
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USA - 2004
Television
Radio
Newspapers
Magazines
Posters
Billboards
Internet
Rank the media based starting
with the most effective.
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Rank the media starting
with the most expensive.
Advertising
 Strengths
 Weaknesses

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Wide coverage
Control the message
Repetition
Builds Loyalty
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Expensive
Impersonal
One way communication
Lacks flexibility
Little opportunity to close the
sale
The business of advertising
Google facts…
• Largest online advertiser in the (cyber)
world
• Revenue is larger that of Ford Motor
Company(!)
• Consistently voted by employees as the
“Best Employer” in Europe and USA
So how does Google make money?
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Exercise
 List as many advantages
and disadvantages for each
advertising media
•
•
•
•
•
•
•
Television
Radio
Newspapers
Magazines
Posters
Billboards
Internet
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Below the line Promotion
Below the line promotion refers to all forms of
advertising or promotion that do not use external
media agents. Examples include…
Branding
Slogans
Logos
Packaging
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Word of Mouth
Publicity
Direct marketing
Sales promotions
Below the Line
 Sales Promotions
•
•
•
•
•
•
•
Price reductions
Special offers (BOGOF)
Coupons
Free samples
Loyalty programs
Gifts
Competitions
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Below the Line
 Point of sale
 After sales service
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Logos
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Logos
“This is a truly innovative
brand logo that graphically
captures the essence of the
London 2012 Olympic
Games”
~ President of the International
Olympic Committee
But did it really need to cost £400,000 to design???
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Logos and NPOs
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Celebrity Endorsements
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Word of Mouth (WOM)
“Ordinary people can spread good and bad
information about brands faster than
marketers.”
~ Ray Johnson (1927-1995), American artist
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Trade shows
AIDA!
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Would you trust these guys???
Public Relations (PR)
Edward Bernays (1891-1995), considered as the
father of public relations, defined the concept as
the…
“management function which tabulates public
attitudes, defines the policies, procedures and
interest of an organisation followed by executing a
program of action to earn public understanding
and acceptance.”
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Public Relations
 Business activities to create
and maintain a positive
image for the company
 Publicity
• News
• Press releases
• Free
 Sponsorship
• Donations
• Give product/services
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Spon$or$hip
The world’s top 5 football shirt sponsors
Football Club
Sponsor
Value of deal
Manchester United
Juventus
Bayern Munich
Chelsea
Real Madrid
AIG
Tamoil
Deutsche Telekom
Samsung
Siemens Mobile
€20.0m
€18.5m
€17.0m
€16.0m
€14.0m
Source: Forbes, 2006
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Below the Line
 Why?
• Direct contact with customer
• Usually less expensive
• Encourage people to try
product
 Why not?
• Limited audience
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Personal Selling
 Strengths
•
•
•
•
•
Customer attention
Customized message
Interactive
Customer relationship
Opportunity to close
 Weaknesses
• Labour intensive
• Expensive
• Limited reach
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Guerilla Marketing
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Guerilla Marketing
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Guerilla Marketing
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Promotion knows no limits
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Promotion knows no limits
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Promotion knows no limits
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AIDA
In deciding on a promotional mix, marketers often
consider the marketing acronym AIDA:
Attention
Interest
Desire
Action
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Promotional Mix
 Companies need to decide
the combination of the
different promotional activity,
the Promotional Mix.
 Depends on:
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•
•
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•
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Stage in product life cycle
Nature of product
Competition
Marketing budget
Market Mix (the other P’s)
Target Market
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Promotional Mix
“the set of tools that a business can use to
communicate effectively the benefits of its
products or services to its customers.”
- The Chartered Institute of Marketing
i.e. the range of above and below the line methods
used to market a product as part of the larger
marketing mix.
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Successful?
 Effective
 Were the objectives
achieved?
 Efficient
 Were they achieved with the
lowest costs possible?
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Promotion and Strategy
“In this age of more products in the
USA and the world than we ever
knew we needed, it is increasing
important to have a logo to quickly
communicate your brand.”
BrandingAndMarketing.com
Sha Tin College Business Education Department
Learning Outcomes
 Types of promotion
• Above the line
• Below the line
 Distinguish between the different types of promotion.
 Analyze the various promotional tools and discuss
their effectiveness.
 Promotional mix Prepare an appropriate promotional
mix.
Sha Tin College Business Education Department