Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Promotion Communication between the customers and the company Dr. Geurts Lecture Winter 1998 1 A. Paid for Media 1. Sales = one on one 2. Advertising = one on many 3. Sales Promotion = several on several B. Public Relations or Publicity - any of the types of paid media when we do not pay for it 2 C. The goal of promotion to shift the demand curve to the right. After promotion, consumers will buy more at the same price or buy the same quantity at a higher price or a combination of the two. P S D1 Q1 Q2 D2 Q 3 D. Functions of Promotion 1. Remind - sponsorship, "brought to you by . . . " 2. Inform 3. Persuade - radio, television E. Problems with promotion 1. Selective perception - 80% don't ever see the promotion 2. Selective distortion 3. Selective retention 4. Noise - anything that keeps the message from getting through (e.g., add could be too humorous to get the message to the customer) 4 II. PROMOTION MIX A. How much of each type of promotion media to use: 1. Advertising 2. Sales Promotions 3. Personal Selling 4. Publicity * Personal selling is most effective for industrial products, advertising is most effective for consumer products, and sales promotion is most useful for reminding consumers or for an initial product offering. B. Promotion to Consumer = pull strategy C. Promotion to Trade (push to the stores) = push strategy 5 III. PROMOTION BUDGET A. Techniques for setting the promotional budget • 1. Marginal-revenue approach – a. Ideal method to be used – b. Very difficult to actually use because it is hard to determine the marginal benefit • 2. Objective-task approach - used by most companies – a. Define objectives – b. Determine strategies to obtain objectives – c. Compute cost of strategies 6 III. PROMOTION BUDGET (con’t) • 3. Percent of sales or projected sales approach • 4. Competitive-parity approach - copy the competition • 5. Arbitrary approaches – a. all the company can afford to put into the budget – b. use the industry average – c. use a fixed percentage every year B. Allocating the promotional budget • 1. Areas making the most profit should receive the most money 7 Marketing Efforts 8 IV. SALES PROMOTIONS A. Types of sales promotions 1. Coupons 7. Mall or store promotion 2. Games 8. Trade shows 3. Free gifts 9. Exhibits 4. Tie in with other product offers 10. Buy 3 cases get 4 5. Athlete using 11. Display materials product in game 12. Product placement 6. Sponsorship of 9 athletic teams IV. SALES PROMOTIONS (con’t) B. Risk of sales promotions 1. Continued emphasis on sales promotions may cause consumers to expect constant lower prices 2. Money spent on sales promotions takes away from the advertising budget 10 Pricing Promotions 11 IV. PUBLICITY A. Companies often hire a publicity firm - newsprint is more believable than advertising, believed to be unbiased B. Companies create news stories 1. 2. 3. 4. awards new product offerings expansion heroics of employees, etc. C. "Free" Advertising - does not take away from the advertising budget D. Media has the need to fill slack time and so may pick up news stories 12 Sponsor Promotion 13 Direct Marketing 14 Forms of Direct Marketing 15