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Step 3 in the Marketing Process
(continued)
Construct An Integrated
Marketing Program
Marketing Unit, Slide No. 1
The Marketing Mix
Promotion
Marketing Unit, Slide No. 2
Promotion
• Promotion
- Relates to the way a company or
organization gets the attention of its
target market—how it advertises,
announces, publicizes, and pushes its
products.
- In other words, promotion is used to
inform customers and persuade them
to buy.
- However, the role of promotion is
greater than this. It is also used to
influence opinions and attitudes
toward an organization, person, or
cause.
Marketing Unit, Slide No. 3
Promotional Mix
• Promotional Mix
- To accomplish the goals of promotion, organizations rely
on a combination or mix of 1) advertising; 2) sales
promotions; 3) public relations; and 4) personal selling.
- Collectively these tools are known as the promotional
mix.
• Integrated Marketing Communications
- An effective promotional program results from the careful
selection and blending of these promotional mix
elements. The process of coordinating the promotional
mix and synchronizing the elements is called integrated
marketing communications.
Marketing Unit, Slide No. 4
Elements of the Promotional Mix
• Advertising
- The paid, non-personal promotion of a company’s
goods and services using mass media to influence
consumers.
- Some advertising media include:
•
•
•
•
•
Billboards, transit ads, and flyers (outdoor)
Newspaper and magazine ads (print);
Radio and television ads (electronic);
Yellow Pages (directory advertising) and
Banner ads, search engine marketing (interactive or
digital).
…continued on next slide
Marketing Unit, Slide No. 5
Elements of the Promotional Mix
(continued)
• Advertising (continued)
- Common Techniques:
• Repetition: Repeat ads frequently to maintain
awareness and remind consumers to buy
• Bandwagon Effect: Get others to use the product by
telling them how many other people are using it. Puts
their minds at each. (“Get on the bandwagon.”) For
example, “4 out of 5 doctors” recommend Trident, or
the “Number 1 movie in America.”
• Testimonials: Convince consumers of the superiority of
your product through the words of ordinary users,
experts, etc.
Marketing Unit, Slide No. 6
Elements of the Promotional Mix
(continued)
• Sales promotion
- Non-personal, persuasive efforts designed to boost a company’s
sales immediately. Examples include:
• Coupons, discounts, rebates, and other special pricing (e.g., two-forone) offers; (QVC termed these artificial stimulants)
• Contests and sweepstakes;
• Sampling;
• Free gift with purchase; and
• Point-of-purchase/in-store displays.
- Sales promotion also includes:
• Use of specialty items, like pens and calendars imprinted with the
company name, intended to keep the company’s name top-of-mind.
(Some consider this a form of advertising, i.e. specialty advertising
• Product placement in movies and on TV. (Some consider this a form of
advertising as well)
Marketing Unit, Slide No. 7
Elements of the Promotional Mix
(continued)
• Public relations
- The practice of conveying messages to the public through the media to
influence people’s opinions about the company and its products.
- Unlike advertising, these messages are unpaid, that is, the organization
does not pay for the media space or time. However, it is a misnomer to
refer to public relations as “free publicity.” The media is free, but it does
cost money to create information that is newsworthy, i.e., worthy of
being covered by the media, and bring this information to the attention of
the media.
- Public relations has a strong impact on consumers because it carries
with it the implied endorsement of the impartial source in which it
appears.
- Event-related marketing, including creating events for the public to
experience the company’s product or services, as well as sponsoring
events, such as sporting events, is typically included in the public
relations category.
Marketing Unit, Slide No. 8
Elements of the Promotional Mix
(continued)
• Personal selling
- Direct, generally face-to-face, communication by
salespeople with existing and potential customers to
promote a company’s products.
- Also an important part of building and maintaining
relationships with customers.
- Can also include telemarketing, although some opt to
include this in a 5th promotional mix category called
direct marketing, which is covered at the end of the
promotional mix slides.
Marketing Unit, Slide No. 9
Selling Complex Products
• When products are complex, customized, and
expensive, they lend themselves to three personal
selling approaches:
- Technical selling: selling that requires a company’s
sales representatives to impart detailed technical
information to their customers.
- Missionary selling: selling that occurs when a
salesperson educates customers, builds goodwill, and
performs promotional activities to encourage them to
purchase a product at a later date.
- Creative selling: selling that requires salespeople to
combine their technical knowledge and personal selling
experience to craft creative and unique ways to better
meet the needs of their customers.
• In some instances the salesperson is selling
directly to the end user or final customer. In others,
the salesperson might be selling to an intermediary,
such as a dealer, distributor, or consultant.
Marketing Unit, Slide No. 10
Selling Standardized Products
• Trade selling: involves managing the sale of one
company’s products to other companies. For
example, selling your products to distributors or
retailers, who in turn, sell your products to others. It
can also involve selling products to companies who
use your product as an input for making their own
products. For example, a food manufacturer selling to
a restaurant.
In trade selling, the customers understand what they
are looking for, thus the selling process is less
complex. The main task in negotiating—negotiating
such issues as pricing, financing, and delivery.
• Retail selling: selling to the final customer—a person
who buys a product for his or her own use. Typically
takes place in a retail setting, e.g., a store.
• Telemarketing: a sales method used to contact
prospective customers over the phone.
Marketing Unit, Slide No. 11
Stages in the Selling Process
• Prospecting for customers
• Making the initial contact
• Making the sales presentation
• Handling objections
• Closing the sale
• Doing after-sales service,
follow-up, and information
gathering
• Sandler Sales
Marketing Unit, Slide No. 12
Word of Mouth Marketing:
Where Does It Fit in the Promotional Mix
• Word of mouth marketing is a very powerful form of promotion. It has several
traits in common with public relations, but also shares some traits in common
with personal selling.
• Like public relations, the marketer does not pay the channel that
disseminates the marketer’s message, in this case an individual. And like
public relations, the message has added credibility because it is not being
paid for. It appears to be an endorsement from a credible, unbiased source.
• Like personal selling, the message is delivered person-to-person.
• There is much marketers can do to encourage satisfied customers to spread
the word. Among the steps:
- Making sure customers are satisfied by exceeding their expectations;
- Providing customers with the tools to more readily distribute information about
your products and services; and
- Providing suitable incentives—rewards that won’t comprise the independence and
integrity of your customers—for helping to spread the word.
Marketing Unit, Slide No. 13
Marketing in Action
QVC: A Different Form of Marketing
• QVC represents a 5th form of
promotion: direct marketing.
• Direct marketing involves
making direct connections with
carefully targeted consumers
to both obtain an immediate
response, i.e., a sale, and
cultivate lasting customer
relationships.
• In effect, direct marketing
combines promotion and
distribution.
• Other forms of direct marketing
include catalogues, direct mail,
telemarketing, and
infomercials.
Marketing Unit, Slide No. 14
The Marketing Mix
Place (Distribution)
Marketing Unit, Slide No. 15
Place
• Place
- the distribution and sales channels used to
get both a product and its marketing
message to the customer
Marketing Unit, Slide No. 16
Distribution and the Sale of
Products to Customers
• Distribution
- the selection of the distribution channels to
reach and deliver products to customers
most efficiently and effectively
• Distribution channel
- the specific method a company uses to sell
and deliver its products to customers
Marketing Unit, Slide No. 17
Wide Variety of Distribution
Channels Available
• Companies can use a combination of
distribution channels, especially when
serving multiple market segments.
• For example, Dell Computers is well
known for selling directly to consumers
via the Web. However, Dell uses a
company sales force to serve large
companies and the college market.
• In addition, when trying to differentiate its
products for different market segments, a
company might use different types of
channels. For example, selling a high
end line of clothing at exclusive
boutiques, and a more moderate priced
line at department stores.
Figure 10.9
Marketing Unit, Slide No. 18
Types of Distribution Channels
• As illustrated on the next
slide, there are four main
distribution options
companies can use:
- Company-owned or
licensed distributors
- Wholesalers
- Retailers
- Direct distribution
Marketing Unit, Slide No. 19
The Four Main Product
Distribution Channels
Figure 11.1
Marketing Unit, Slide No. 20
• Many companies opt to sell their products through a company-owned sales
and distribution network.
• Establishes a chain of sales and service centers and warehouses in the
geographic areas it serves.
• Advantage: Company has total control over the way its products are sold to
customers. In other words, it controls the downstream value chain—all of the
activities related to managing the product from the time it is made to the time
it is delivered to the customer (see next slide).
• The downside: Very complex and expensive. Can also limit expansion
options, the geographic and market segments served by the company.
• To reduce the costs but expand the company’s reach, some firms develop a
network of licensed distributors or dealers, independent businesses that
buy the rights to sell the firm’s products in a given area. For example, a car
dealer. Another example: franchises.
Marketing Unit, Slide No. 21
Sales and Distribution Activities Involved
in Managing the Upstream Value Chain
Figure 11.2
Marketing Unit, Slide No. 22
Wholesalers and Retailers
• Some companies use wholesalers and
retailers, or retailers alone, to help distribute
their products to the final customer.
- Wholesaler: an intermediary or broker that buys
products from manufacturers and then resells
them to other companies, such as retailers, which
in turn distribute them to the final customer.
- Retailers: intermediaries who sell other
companies’ products to the final customer.
Marketing Unit, Slide No. 23
Direct Distribution
• Direct distribution:
- Distribution channels used to deliver and sell products
directly to the final customer.
• In other words, there is no “middleman,” company owned
or otherwise, to sell products to its final customer.
• A company can use many different methods to directly
reach the final customer, including:
- Catalogue;
- Advertisements in a variety of media the customer can respond
to;
- Company website; and
- Company sales force.
Marketing Unit, Slide No. 24
The Distribution Mix and How It’s
Chosen
• Distribution mix:
- the combination of channels a
company selects to place,
promote, sell, and deliver its
products to customers
• Affected by three main factors:
- Product characteristics;
- The importance of the purchase
to the final customer; and
- The need to customize a
product.
Figure 11.3
Marketing Unit, Slide No. 25
The Choice of Distribution Mix
Figure 11.4
Marketing Unit, Slide No. 26
The Impact of the Product
Life Cycle on Marketing
Strategy & Tactics
Marketing Unit, Slide No. 27
The Product Life Cycle
• Like people, products are born, grow, mature,
and eventually decline. For products, this cycle is
called the product life cycle.
• As illustrated on the next slide, the product
life cycle reflects the changes in demand for a
product that occur over time.
• The graph also show how profits change over
time.
Marketing Unit, Slide No. 28
Product Life Cycle
Introductory
Growth
Maturity
Decline
Stage
Stage
Stage
Stage
Product
Category
Demand or
Sales
Dollars
Product
Category
Profits
0
Time
Marketing Unit, Slide No. 29
Marketing Implications of the
Product Life Cycle
INTRODUCTION
GROWTH
MATURITY
Limited models
Frequent
changes
More models
& frequent
changes
Large number
of models
Distribution
Strategy
Limited
wholesale/
retail distributors
Expand no. of
dealers & build
long-term
relationships
Promotion
Strategy
Awareness
Stimulate primary
demand Sampling
Aggressive
brand ads to
promote product
advantages
Pricing
Strategy
High to recoup
development
costs
Fall as result of
competition &
efficient
production
Product
Strategy
Extensive.
Margins shrink.
Maintain shelf
space.
Advertise &
promote
heavily to
maintain share.
Prices
continue
to fall
DECLINE
Eliminate
unprofitable
models
Phase out
unprofitable
outlets
Phase out
promotion
Prices
stabilize at
low level.
Marketing Unit, Slide No. 30