Download Mkt 340 Class2-Promotion - Cal State LA

Mkt 340/Principles of Advertising
Class 2
17-1
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
The Marketing Concept
Coordinating the total resources of an
organization
 Toward the identification and satisfaction
of customer needs and wants
 In a way planned to enhance profits and/or
success.
 “Find (or create) a need and fill it (at a
profit).

17-2
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Marketing involves stimulating
and managing exchanges.
The Marketing Exchange Model
The Marketer -- The Initiator
The Thing Offered -- Value/Benefit
The Target Market -- The Receiver
17-3
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Difference between
Marketing and Selling

Selling is Self-Focused
> producing a product and then trying to persuade
customers to purchase it -- in effect, trying to
alter consumer demand. It is internally focused.

Marketing is Customer-Focused
> determining customer wants and then
developing a product to satisfy that need and still
yield a satisfactory profit. It is externally focused.
17-4
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Selling vs. Marketing
Selling: Self-Focused
Product
Promotion
Message
Media
Customers
Marketing: Customer-Focused
Customers
Promotion
Message
Media
Product
17-5
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Recent Refinements of the
Marketing Concept

Quality
> Quality is defined by customers.
> TQM - Total Quality Management.
> ROQ - Return on Quality analysis.

17-6
Relationships
> An attempt to build personal, long-term bonds
with customers.
> Relationship marketing has expanded to
include all groups an organization interact
with: suppliers, employees, unions,
government, and even competitors.
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Recent Refinements of the
Marketing Concept (Con’t.):

Mass Customization
> An attempt to provide affordable products
customized to come as close as possible to
meeting the needs of individual customers.
> This is made possible because of advances
in information and production technology.

17-7
Value Creation
> An attempt to assess what customers value
in a product.
> Value means more than money to customers.
> Value is a concept unique to each individual.
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Recent Refinements of the
Marketing Concept(Con’t.):

Return on Marketing Investment
> Traditionally, the cost of marketing has been
treated as an expense.
> Since marketing can represent at least 50%
of all corporate costs, it is now being looked
at as an investment.

17-8
Societal Marketing Concept
> Does the Marketing Concept conflict with the
best interests of society?
> Involves broadly defining customer and
taking a long-term view of customers
satisfaction.
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
The Marketing Mix
Step One
The Target Market -- Needs, Wants, Expectations
Step Two
The Positioning -- The Story
Brand Image & Competitive Advantage
17-9
McGraw-Hill/Irwin
Step Three
“The 4 P’s”
Product ---- Price ---- Place ---- Promotion
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Promotion versus Marketing
Promotion is the component of a firm’s
marketing mix that informs, persuades, and
reminds the market regarding the firm
and/or its products.
 It includes all the means by which a
company communicates with customers.
 Persuasion means to influence feelings,
beliefs, or behavior.

> It is an attempt to shift or change the demand
curve for a firm’s goods or services.
17-10
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
The Promotion Mix Components
Promotion/Communications Mix
Advertising

17-11
Public Publicity
Relations
Personal
Selling
Sales
Promotions
Name some Promotion Mix Objectives.
> Increase sales, votes, desired behaviors, etc.
> Create awareness, preference, loyalty
> Identify prospects (sales leads)
> Encourage/discourage trial, retrial
> Recruit and support middlemen and sales dpt.
> Hurt competitors
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
How Does Promotion Mix Persuade?

Each component
> Provides awareness
> Provides information
> Differentiates the product from competition
> Makes the perceived value = price
> Reduces cognitive dissonance
17-12
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Promotion Mix Components Defined

Advertising: Any paid-for type of non-personal
communication by an identified sponsor.
>
>
>
>


17-13
Business-to-Consumer vs. Business-to-Business
Product vs. Corporate vs. Institutional
Local vs. Regional vs. National vs. International
Indirect Response vs. Direct response
Public relations: A planned communication effort
intended to make the firm appear as a good
corporate citizen.
Publicity: A special form of public relations that
involves creating positive newsworthy stories
about an firm and/or its products.
> News releases, featured articles and video segments
> Press conferences
> Product placement in movies and TV
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Promotion Mix Components Defined
(continued)


Personal selling: The direct presentation of a
product to a prospective customer by a
representative of the selling organization.
Sales promotion: Demand-stimulating activity
designed to supplement advertising and facilitate
personal selling.
17-14
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Integrated Marketing
Communications (IMC)
The promotional mix components are
coordinated in a strategy called Integrated
Marketing Communications (IMC) – Also
called a Campaign.
 When designing the IMC effort, five things
should be considered:

17-15
> The Target Audience
> The Promotional Objective
> The Nature of the Product
> Stage in the Product’s Life Cycle
> Funds Available for Promotion
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Exercise
Advertising - Public Relations - Publicity Personal Selling - Sales Promotions

17-16
How would you classify the following:
> McDonald’s uses billboards to promote its free
fries with a Big Mac purchase.
> A Honda salesperson calls you about a new
model that coming out soon.
> Channel 5 news has a story about Energizer
Battery’s new ad campaign. It features a
commercial with the Energizer rabbit.
> Quaker Oats mails a 50 cents-off coupons to
500,000 homes in L.A. county.
> Kool-Aid donates two cases to a little league
baseball team to use in a fundraiser.
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.