Download PPT Promotion

PROMOTION
The Role of Promotion
Promotion
• Any form of communication a business or
organization uses to inform, persuade, or
remind people about its products and improve
its public image.
– There are four basic types:
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Advertising
Publicity
Sales Promotion
Personal Selling
http://www.youtube.com/watch?v=ClL7FYUCS58 (The Process)
Two Types of Promotion
http://education-portal.com/academy/lesson/types-of-advertising-institutional-and
product-advertising.html#lesson
(Two Types: Product & Institutional)
• Product Promotion
– To convince potential customers to buy products
from it instead of from a competitor
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explains major features and benefits of its products,
tells where those products are sold,
advertises sales on those products,
answers customer questions, and
introduces new products.
http://www.youtube.com/watch?v=_KeQxn2UNAk (Product Promotion)
Two Types of promotion (cont.)
• Institutional Promotion
– Businesses use to create a favorable image for
itself (especially in relation to competitors).
• Does not directly sell a certain product,
• but creates a favorable image,
• thus ultimately resulting in increased sales of a
company’s products.
http://www.youtube.com/watch?v=rubcXpSV9pI
(Nike: Institutional Video Example)
ADVERTISING
• Is any paid form of nonpersonal presentation
and promotion of ideas, goods, or services by
an identified sponsor.
– Distinguished from other forms of promotion by
three features:
1. The time or space devoted to it is paid for.
2. It uses a set format to carry the message rather than
personal, one-on one selling.
3. It identifies the sponsor of the message.
Advertising Tid Bit
• Nationally businesses spend more than 135
billion on various types of advertising.
Six (6) Advantages of Advertising
1. A large number of people usually see the
advertiser’s message.
2. Advertising costs per potential customer are
usually lower than other forms of promotion.
(billboards, newspaper, radio, TV, etc).
3. Businesses can choose the appropriate
media. (billboards, newspaper, radio, TV, ect).
6 Advantages of Advertising (cont.)
4. A business can control the content of an
advertisement & adapt.
5. Advertisements are subject to repeat viewing.
(More X message more chance buy)
6. Advertisements can “presell” products. (influ.
before buy)
Disadvantages to Advertising
1. Advertising cannot focus well on individual
needs because the message is the same for
all customers.
2. Some forms of advertising such as television,
can be too expensive for many businesses.
Disadvantages to Advertising
(cont.)
3. In certain respects, advertising is wasteful
and inefficient (Many who read are not
actually potential customers).
4. Because of the cost involved and the need to
attract and hold the attention of potential
customers, advertisements often must be
brief. (for some prd. Billboards to brief)
PUBLICITY
– Involves placing newsworthy information
about a company, product, or person in the
media.
• A business can use publicity to promote particular
events, such as the groundbreaking ceremonies for a
new store,
• promote particular products, such as a new line of cell
phones,
• but the principle function of publicity , however , is
building an image.
Image
• Is the way a business or organization is
defined in people’s minds.
Publicity (cont.)
Publicity can…?
– Improve a businesses image or favorability within
the community. (Example. BP) Some examples of
business activities that are pure image builders
include:
• sponsoring cultural events such as concerts and art
exhibits,
• awarding scholarships and prizes,
• and donating land.
Advertising v?s Publicity
• How does publicity differ from advertising?
– Publicity is FREE! (at least in terms of its
placement)
– Advertising is not free in terms of its placement,
you have to pay for it.
(Story on news vs. ad on the same show)
Advantages of Publicity
• Its free!
• Audience for news is huge.
• The sources that produce it are held in high
esteem by the public.
• News is viewed as more objective as ads.
• People are more likely to believe news stories.
Disadvantages of Publicity
• Businesses give up much of the control of the
message with publicity
• The timing and how the message is aired is
lost with publicity
• Not all publicity is positive.
Sales Promotion & Personal Selling
• Sales Promotion– Is considered as all marketing activities other than
personal selling, advertising, and publicity
• Objective- to increase sales, inform customers about new
products, and to create a positive store or corporate image
http://www.youtube.com/watch?v=BDcTSTMKfbE (Promotional Process)
Video: Trade & consumer
Sales Promotion (cont.)
• Characteristics of sales promotion
– Involves short term activities vs. advertising and
publicity.
– Usually offers some incentive to make a purchase
– Can be used in all channels of distribution with
manufacturers, wholesalers, retailers, and
consumers
Sales Promotion (cont.)
• Sales promotions may be either trade
(business-to-business) oriented or consumer
oriented.
– Two Types: Trade Promotion & Consumer Sales
Promotion
Trade Promotions
-Are sales promotion activities designed to
gain manufacturers’, wholesalers’, and
retailers’ support for a product. (4 of them)
1. Slotting Allowances
-A cash premium paid by the manufacturer to a
retail chain for the costs involved in placing a
new product on its shelves.
-Can range from $1,000 to $100,000 per product
-Also pays for charges for store shelves and
penalties if product doesn’t sell
-Also pays for store advertising and display costs
Trade Promotions (cont.)
2. Buying Allowances
-A special price discount given by manufacturers
to wholesalers and retailers to encourage them
to either buy a product or buy a larger quantity
of a product.
-Because of the price discounts retailers and
wholesalers make more $ on each product they
sell encouraging them to sell/promote the
products more effectively
Trade Promotions (cont.)
3. Trade Shows and Conventions
-Are designed to reach wholesalers and
retailers. They provide:
-Business opportunities to introduce
new products,
-encourage increased sales of existing
products, and
-gain continued company and
product support
Trade Promotions (cont.)
4. Sales Incentives
-Are awards given to managers and employees
who successfully meet or exceed their
company’s set sales quota for a particular
product or line of products. Awards may
include:
-Cash and Prizes
-Trips
http://www.youtube.com/watch?v=4gbVVzffT-0 (3M- Sales incentive Trip)
Consumer Sales Promotions
– Sales promotion efforts designed to encourage
customers to buy a product. There are five (5):
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Licensing
Promotional Tie-ins
Visual Merchandising and Displays
Premiums and incentives
Product samples
Consumer Sales Promotions (cont.)
1. Licensing- an increasingly popular form on
consumer promotion.
– 1.5 billion retail sales are generated by licensing
– Average of 225 licenses granted each year
– Companies, movie makers, sports teams, and
celebrities etc. may license their:
-Logo’s, trademark, trade characters, names and
likenesses, or personal endorsements to a
business to be used in promoting the business’s
product.
http://www.youtube.com/watch?v=A3rfm5ASwuI (Lic. Example McD.)
Consumer Sales Promotions (cont.)
2. Promotional Tie-ins
– Involve sales promotional arrangements between
one or more retailers or manufacturers. They
combine resources (advertising and sales
promotion activities) to do a promotion that
creates additional sales for each partner by
increasing customer response
• Can be complex with several companies,
• or can be simple with just two companies
• Can be local, regional, or national
http://www.huffingtonpost.com/2012/11/09/justin-bieber-taylor-swiftmacys-ad-video_n_2102545.html (Celebs. products sold at Macy’s)
Consumer Sales Promotions (cont.)
3. Visual Merchandising and Displays
– Visual Merchandising refers to the coordination
of all physical elements in a place of business so
that it projects the right image to its customers
– Displays refer to the visual and artistic aspects of
presenting a product to a target group of
customers. They include: Window, floor, counter,
and other in-store displays
Consumer Sales Promotions (cont.)
4. Premiums and incentives
-Designed to increase sales by building
product loyalty and attracting new
customers
-Premiums are low cost items given away
free to consumers as a condition of
purchase. There are four (4) basic types:
-Coupons,
-factory packs,
-traffic builders,
-coupon plans.
Consumer Sales Promotions (cont.)
4. Premiums and incentives (cont)
• Coupon-Certificates given to customers for
cash discounts on goods or services.
(used by manufacturers & retailers &
sent/given to customers in many
ways)
• Factory pack-Free gifts placed in product
packages. (ex. Cereal boxes)
Consumer Sales Promotions (cont.)
Premiums and incentives
• Traffic builders- Low cost premiums, such as
pens, key chains, and
calendars given to customers
for visiting a store or event
• Coupon plans-long term programs offering a
variety of premiums in exchange for labels,
coupons, or other tokens from on or more
purchase. (ex. Soup labels or Box tops)
Consumer Sales Promotions (cont.)
Premiums and incentives
• Are there costs involved with premiums and
incentives?
– Yes, and the costs are ultimately paid for by the
businesses offering them.
• Ex. Coupons –retailers send them to HQ, clearing
houses to be sorted and sent to redemption centers
where the retailer is paid the face value of the coupon.
Consumer Sales Promotions (cont.)
5. Product Samples- A free trial size of a product
that is sent through the mail, distributed
door-to- door, or through retail stores and
trade shows. Good for introducing new
products. (ex. Detergents,
toothpastes. Shampoo, and deodorants)
Personal Selling
• Personal Selling-Communicating with
customers by making an oral sales
presentation to one or more potential
buyers. (sales people)
Two types of sales personnel:
1. Order taking- store emp.
2. Order getting-sales reps.
Personal Selling (cont.)
Order takers- Cashiers, counter clerks, and sales
associates, perform routine tasks. Set up
displays, stock shelves, answer customer
questions, and operate cash registers.
Order getters- such as professional salespeople
inform customers and help them to buy.
(more extensive training)
Personal Selling (cont.)
Advantages of personal selling:
-Is designed to complete a sale once a customer
is attracted to a business by advertising,
publicity, or sales promotion.
-If personal selling is done well it will improve
customer satisfaction.
-Personal selling is the most flexible and
individualized of the promotion types
Personal Selling (cont.)
Disadvantages of personal selling:
-Sales people can only help one customer at a
time
-Sales people must fully understand the sales
process so there is more training needed= $
-Poor personal selling can hurt customer
satisfaction
The promotional Mix
-a combination of different types of promotion.
Businesses decide on the mix that will be most
effective in persuading customers or other
businesses to purchase and support the
businesses products. (ex. Walt Disney Co.)
-uses local and national advertising; publicity;
sales promotion; and personal selling to
continue to attract customers.
How they work together
-Advertising creates awareness
while
-publicity creates a favorable image
and
-Sales promotion stimulates sales
and
-Personal selling helps the customer
complete the sale