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PROMOTION
By:
DR. SHIRLEY C. EJE
Professor
Promotion
Slide 2
Promotion
• the
element in an organization’s
marketing mix that serves to inform,
persuade, and reminds the market of a
product and/or organization selling it, in
hopes of influencing the recipients feelings,
beliefs, or behavior.
Promotion
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Promotion
Slide 4
Relationship between Advertising and the Product Life Cycle
Not mentioned in your textbook
Chpt 13 in the Marketing 106 course
Copyright, Professor W.T.G. Richardson, Seneca College
Promotion
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Informing
• people have to know about it, in order to buy it
Advertising that seeks to develop demand through
presenting factual information on the attributes of a
product or service.
Tends to be used in promoting NEW products.
Use in the Introductory Stage of PLC
Promotion
Slide 6
Persuading
• when competition offers similar product, you have
to “persuade” them to try yours
Advertising that emphasizes using words and/or images
to try to create an image for a product and to influence
attitudes about it.
Used by Coke and Pepsi re: lifestyle ads.
Used after the Introductory Stage of the PLC
Promotion
Slide 7
Reminding
• when new competition comes along, you have to
“remind” customers of your greater experience,
advantages etc.
Advertising whose goal is to reinforce previous
promotional activity by keeping the product’s or
service’s name in front of the public.
Used in the Maturity Period and the Decline Stage of the
PLC.
Promotion
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Promotion
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• Pushing through the promotion channel
Producer -
personal selling
2 wholesaler
retailer
customer
Promotion techniques used
• run ads in trade magazines to make wholesalers aware of the product
• provide incentives to retailers to carry the item
“… free case of drinks with each 2
cases it buys…” page 466
• run contests for salespeople to win prizes for selling the product
Promotion
Slide 10
• Pulling through the promotion channel
Producer -
personal selling
2 wholesaler
retailer
customer
Promotion techniques used
• run TV commercials so customers directly learn about the product - then
they go to the store and ask for it, or call around to find out where it is
sold
• give free samples to potential customers
Promotion
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• Pulling through the promotion channel
Producer -
personal selling
2 wholesaler
retailer
customer
Sometimes you do “pulling” when the Middlemen cannot be
pushed, that is they already have a competitors product, so
the way to get Middlemen to WANT to carry the product, is to
have customers ask for it.
Promotion
Promotional methods:
•Personal Selling
•Advertising
•Sales Promotion
•Public Relation
•Publicity
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Promotion
Slide 13
Personal Selling
• direct communication between seller
and buyer
• face2face contact
•Usually used to sell industrial goods and
services
•Also used to sell some expensive
consumer items, eg. Cars, computer
systems
Promotion
Slide 14
Advertising
• communicating with large numbers of potential
customers
• “non”-personal selling
• used when the target market is large and
dispersed
•any paid form of nonpersonal communication
eg. Techniques include billboard ads and TV
commercials
•Advertising is a form of Mass Selling
Promotion
Slide 15
Sales Promotion
• a demand-stimulating activity designed to
supplement advertising and facilitate personal
selling.
•it is paid by a sponsor
•involves an incentive to encourage a purchase
•Example: contests, trade shows, in-store
displays, rebates, samples, premiums, discounts
and coupons.
Promotion
Slide 16
Public Relation
• it encompasses a wide variety of communication
efforts to contribute to generally favorable
attitudes and opinions toward an organization and
its products.
•this includes newsletter, annual reports,
lobbying, and sponsorship of charitable or civic
events.
Promotion
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Publicity
The generation of awareness about a product
beyond regular advertising methods.
Usually less costly than advertising because
sometimes the message is spread for free by
a newspaper article or TV story.
Promotion
Slide 18
Publicity
Examples of Publicity
• famous person photographed using your
product
• your product mentioned in National News in
a positive way
• your product featured in a movie
• TV commentary about aspects of your
product trade magazines carrying a story
eg. Road and Track doing a feature on the new
Landrover
Promotion
Slide 19
Publicity
Publicity can be negative
eg. If a famous movie star gets electrocuted using your
product, this can cause people to NOT want to buy it this would be a major problems
eg. If your product is sabotaged - this could include
tampering with medical products ie. Tylenol
eg. If there are negative rumours about the ingredients
in your product
eg. If there are negative ingredients about the moral
aspects of your company
Promotion
Promotion People
• Sales Managers
• Advertising Managers
• Sales Promotion Managers
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Promotion
Slide 21
Promotion People
Sales Managers
• Are concerned with managing personal
selling
• In small companies this person also does
the advertising and sales promotion
Promotion
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Promotion People
Advertising Managers
• They manage the mass selling activities
• They chose the company to make the
commercials
• Pick the billboard signs etc.
• If the company is big enough they hire an
outside agency
• They may also do publicity as well
Promotion
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Promotion People
Sales Promotion Managers
• They manage the Sales Promotion activities
• They decide about in-store coupons, prizes,
contests etc.
• They spend a lot of time visiting the retail
outlets where the product is sold
Promotion
Slide 24
Potential Mail Recipients
Once your name is on a list for a newspaper
subscription, your name and address can
be “sold” to another company who will mail
you information to try and convince you to
buy their product.
Buying and selling lists (databases) of such
names is big business.
Promotion
Slide 25
Comparison of Direct Marketing and General Advertising
Direct Marketing
General Advertising
Selling to individuals. Customers are
often identifiable by name, address, and
purchase behaviour.
Mass selling. Buyers identified as broad
groups sharing common demographic and
psychographic characteristics.
Products have added value or service.
Distribution is important product benefit.
Product benefits do not always include
convenient distribution channels.
The medium is the marketplace.
Retail outlet is the marketplace.
Marketer controls product until delivery.
Marketer may lose control as product
enters distribution channel.
Advertising used to motivate an
immediate order or inquiry.
Advertising used for cumulative effect
over time to build image, awareness,
loyalty, benefit recall. Purchase action
deferred.
Repetition used within ad.
Repetition used over time.
Consumers feel high perceived risk –
product brought unseen. Recourse is
distant.
Consumers feel less risk – have direct
contact with the product and direct
recourse.
Promotion
Slide 26
Adoption Process
• Innovators
• Early Adopters
- sales people concentrate their efforts here
• Early majority
• Late majority
• Laggards, or nonadopters
Promotion
Slide 27
Setting the promotion budget
Most common method is based on using past
percentages
- that is to say,,,,
If you sold $ 1,000,000 and you spent 20% on
advertising, which = $200,000
then,
if you spend $400,000 you should sell $2 million!
Promotion
Slide 28
Setting the promotion budget
Other methods - used in real world
• Matching what competition spends
• Based on what is required to get number of
customers that will meet corporate objectives called the Task Method
- sometimes stated as a % of sales
Promotion
Slide 29
The Evolution of Personal
Selling
• Personal selling: interpersonal influence
process involving a seller’s promotional
presentation conducted on a person-toperson basis with the buyer
• “A salesman is someone who sells goods
that won’t come back to customers who
will.” (Anonymous)
Promotion
Slide 30
• Has been a standard business activity for
thousands of years
• Early peddlers sold goods they
manufactured or imported . . . viewed
selling as a secondary activity
• In 18th century America, peddlers sold
directly to farmers and settlers in the West
• In the 19th century, drummers sold to
both consumers and intermediaries
sometimes using questionable practices
and built negative stereotypes which
persist today
Promotion
Slide 31
• Today’s salesperson is usually a highlytrained professional
• Sales professionals take a customeroriented approach employing truthful,
nonmanipulative tactics in order to satisfy
the long-term needs of both the
customer and the selling firm
• Today’s professional salespeople are
problem solvers who seek to develop
long-term relationships with customers
Promotion
Slide 32
• Factor affecting the importance of
personal selling in the promotional mix
Variable
Conditions That Favor
Personal Selling
Conditions That Favor
Advertising
Consumer
Geographically
concentrated
Relatively low numbers
Expensive
Technically complex
Custom made
Special handling
requirements
Transactions frequently
involve trade-ins
Geographically dispersed
Price
Relatively high
Relatively low
Channels
Relatively short
Relatively long
Product
Relatively high numbers
Inexpensive
Simple to understand
Standardized
No special handling
requirements
Transactions seldom
involve trade-ins
Promotion
Slide 33
The Four Sales Channels
• Personal selling occurs through several
types of communication channels
including these four:
– Over-the-Counter
– Field Selling
– Telemarketing
– Inside Selling
Promotion
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• Over-the-Counter: personal selling
conducted in retail and some wholesale
locations in which customers come to
the seller’ place of business
• Field selling: sales presentations
made at prospective customers’ homes
or businesses on a face-to-face basis
Promotion
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• Telemarketing: promotional
presentation involving the use of the
telephone on an outbound basis by
salespeople or on an inbound basis by
customers who initiate calls to obtain
information and place orders
• Inside Selling: performing the functions
of field selling but avoiding travel-related
expenses by relying on phone, mail, and
electronic commerce to provide sales and
product service for customers on a
continuing basis
Promotion
• Integrating the Various Selling
Channels
Slide 36
Promotion
Slide 37
Trends in Personal Selling
• Relationship selling: regular contacts
over an extended period to establish a
sustained seller-buyer relationship
• Consultative selling: meeting customer
needs by listing to them, understanding -and caring about -- their problems, paying
attention to details, and following through
after the sale
– Cross-selling
Slide 38
Promotion
• Buyers prefer to do business with salespeople who:
– Orchestrate events and bring to bear whatever
resources are necessary
to satisfy the customer
– Provide counseling to the customer based on in-depth
knowledge of the product, the market, and the
customer’s needs
– Solve problems extremely proficiently to ensure
satisfactory customer service over extended time
periods
– Demonstrate high ethical standards and communicate
honestly at all times
– Willingly advocate the customer’s cause within the
selling organization
– Create imaginative arrangements to meet buyers’
needs
– Arrive well-prepared for sales calls
Promotion
Slide 39
• Team Selling: combination of
salespeople with specialists from other
functional areas to promote a product
– Virtual sales team
• Sales Force Automation (SFA):
applications of computer and other
technologies to make the sales function
more efficient and competitive
– Benefits include improved effectiveness due
to improved access to information, lower
costs, improved product launches, and
attentive customer service
Promotion
Sales Tasks
• Three basic sales tasks can be
identified:
– Order Processing
– Creative Selling
– Missionary sales
Slide 40
Promotion
Slide 41
• Order Processing: selling, mostly at the
wholesale and retail levels, that involves
identifying customer needs, pointing them
out to customers, and completing orders
• Creative Selling: personal selling involving
situations in which a considerable degree of
analytical decision making on the buyer’s part
results in the need for skillful proposals of
solutions for the customer’s needs
• Missionary sales: indirect type of selling in
which specialized salespeople promote the
firm’s goodwill among indirect customers,
often by assisting customers in product use
Promotion
The Sales Process
Slide 42
• The AIDA Concept and the Personal Selling Process
Promotion
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• Prospecting: personal-selling function
of identifying potential customers
• Qualifying: determining that a
prospect has the needs, income, and
purchase authority necessary for being a
potential customer
Promotion
Slide 44
• Approach: salesperson’s initial contact
with a prospective customer
– Precall Planning: use of information
collected during the prospecting and
qualifying stages of the sales process and
during previous contacts with the prospect to
tailor the approach and presentation to
match the customer’s needs
Promotion
Slide 45
• Presentation: describing a product’s
major features and relating them to a
customer’s problems or needs
• Demonstration allows the customer to
experience a good or service
Promotion
Slide 46
• Handling Objections: expressions of
sales resistance by the prospect
– Example: A customer’s “I don't like the color”
is probably their way of asking what other
colors are available
– Objections are reasonable and professional
salespeople are prepared to handle them
appropriately
Promotion
Slide 47
• Closing: stages of personal selling where
the salesperson asks the customer to make
a purchase decision
• Follow-up: postsales activities that often
determine whether an individual who has
made a recent purchase will become a
repeat customer
– Helps build mutually beneficial long-term
relationships
Promotion
Slide 48
Managing the Sales Effort
• Sales management: Activities of
planning, organizing, staffing, motivating
compensating, and evaluating and
controlling a sales force to ensure its
effectiveness
Promotion
Slide 49
• Recruitment and Selection
– One of the sales manager’s greatest
challenges
– Careful selection is important for two
reasons:
• Substantial costs involved
• Mistakes are costly and detrimental to
customer relations and sales-force
performance
Promotion
Slide 50
• Training
– Principal methods used are on-the-job
training, individual instruction, inhouse classes, and external seminars
– Popular training techniques include
instructional videotapes/DVDs,
lectures, roll-playing exercises, slides,
films, and interactive computer
programs
Promotion
Slide 51
• Organization
– General organizational alignment may be
based on geography, products, types of
customers, or some combination of these
factors
– National accounts organization:
organizational arrangement that assigns
sales teams to a firm’s largest accounts
Slide 52
Promotion
• Basic approaches to organizing the sales force
Promotion
Slide 53
• Supervision
– Span of control: the number of sales
representatives who report to the first level of
sales management
– Optimal span of control is affected by such
factors as complexity work activities being
performed, ability of the individual sales
manager, degree of interdependence among
individual salespersons, and the extent of
training each salesperson receives
Promotion
Slide 54
• Motivation
– Efforts to motivate salespeople usually take the
form of the briefings, information sharing, and
both psychological and financial encouragement
– Psychological encouragement includes appeals to
emotional needs, recognition, and peer
acceptance
– Financial encouragement includes monetary
rewards and fringe benefits such as club
memberships and sales contest awards
– Expectancy theory
Promotion
Slide 55
• Compensation
– Commission: incentive compensation
directly related to the sales or profits
achieved by a salesperson
– Salary: fixed compensation payments
made periodically to an employee
Promotion
Slide 56
• Evaluation and Control
– Sales quotas: level of expected sales for
territory, product, customer, or salesperson
against which actual results are compared
– Other measures such as customer satisfaction,
profit contribution, share of product-category
sales, and customer retention
– Another way to categorize a salesperson’s strong
points:
• Task, or technical ability
• Process, or sequence of work flow
• Goal, or end results (output) of sales performance
Promotion
Slide 57
Ethical Issues in Sales
• Promotional activities, including personal
sales, raise many ethical questions
• Sales managers can foster a corporate
culture for an ethical sales environment:
– Employees understand what is expected of
them
– Open communication exists between
employees and managers
– Management leads by example
– Employees are proud of and loyal to their
organization
Promotion
Slide 58
Sales Promotion
• Marketing activities other than personal
selling, advertising, and publicity that
stimulate consumer purchasing and
dealer effectiveness; includes displays,
trade shows and expositions,
demonstrations and various nonrecurrent selling efforts
– Consumer-Oriented Promotions
– Trade-Oriented Promotions
Promotion
Slide 59
• Consumer-Oriented Promotions
– Coupons and Refunds
• Coupons offer discounts on the purchase
price. Nearly $5 billion redeemed annually
– Free-standing inserts (FSIs) in Sunday
newspapers account for about 75 percent of all
coupon
• Refunds offer cash back to consumers with
proof of purchasing one or more products
Promotion
Slide 60
– Samples, Bonus Packs, and Premiums
• Sampling refers to the free distribution of a
product in an attempt to obtain future sales.
“Try it, you'll like it.”
• A bonus pack is a specially packaged item that
gives the purchaser a larger quantity at the
regular price.
• Premiums are items given free or at a reduced
cost with the purchases of other products
Promotion
Slide 61
– Contests and Sweepstakes
• Contests require entrants to solve
problems or write essays -- they may also
require proofs of purchase
• Sweepstakes select winners by chance -no product purchase is necessary
Promotion
Slide 62
– Specialty Advertising
• Sales promotion technique that places the
advertiser's name, address, and advertising
message on useful articles that are then
distributed to target markets
• More than $8 billion worth of specialty
advertising items are given out annually
Promotion
Slide 63
• Trade-Oriented Promotions
Sales promotion that appeals to
marketing intermediaries rather than
to consumers
– Trade allowances: deals offered to
wholesalers and retailers for purchasing
or promoting specific products
– Point-of-purchase (POP)
advertising: a display or other
promotion located near the site of the
actual buying decision
Promotion
Slide 64
– Trade shows: vendors’ displays and the
demonstrations at sites often organized by
industry trade associations, perhaps as part of
these association’s annual meetings or
conventions.
– Dealer incentives, contest, and training
programs are run by the manufacturers to
induce retailers and their salespeople to
increase sales and to promote product
• Push money is an incentive that gives retail
salespeople cash rewards for every unit of a
product they sell
Promotion
Slide 65
• Measuring Sales Promotion
Effectiveness
– Since many sales promotions result in direct
consumer responses, marketers can
relatively easily track their effectiveness
– As with other methods, marketers must
weigh the cost against the benefits
Promotion
Slide 66
• Ethics in Sales Promotion
– Sales promotions provide opportunities for
unscrupulous companies to take advantage of
consumers
– Trade allowances, particularly slotting
allowances, have been criticized for years as a
form of bribery
Promotion
Slide 67
ACTIVITIES:
• Assume you are marketing a new perfume scent for
men and women. Briefly describe the roles you
would assign to advertising, personal selling, sales
promotion and publicity in your promotional
campaign.
• A promotional campaign is a coordinated series of
promotional efforts built around a single theme and
designed to reach a predetermined goal. For
recruiting new student, describe the promotional
tools that you will used.
Promotion
Slide 68
THE END