Promotion–1

Promotion

Professor Carl MelaBA 360 Marketing Management

Fuqua School of Business

• Introduction• Three C’s• Four P’s

– Product– Placement– Promotion– Price

• Summary

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Agenda

• The promotional mix• 7 steps in developing a promotional plan

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Marketing mix

• Promotion mix– Advertising– Selling– Sales Promotion– Publicity– Direct Marketing

• Product• Price• Distribution

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The Communication Process

Sender EncodingMedia

Decoding Receiver

Feedback Response

Message

Noise

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Issues in Communication Process

• Encoding - Translating Thoughts Into Symbolic Form• Message - Common Experience• Decoding and Receiving

- Selective Attention- Selective Distortion (Amplification & Leveling)- Selective Recall - Long Term Memory (Rehearsal & Positive Attitude)- Short Term Memory

• Response (Attitudes)- Monopoly on Attention, In Line With Existing Opinion, Unfamiliar and Lightly Felt, Reference Group Approval, Source Credibility- Credibility - Expertise, High Status, Objectivity, Likability, Power

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Steps in DevelopingPromotional Plan

• 1. Identify Target Audience

• 2. Determine The Communication Objective

• 3. Design The Message

• 4. Decide on The Promotional Mix

• 5. Allocate The Promotional Budget

• 6. Measure The Results

• 7. Manage And Coordinate The Process

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1. Identify Target Audience

• Potential new buyers• Current users• Influencers

– People who may not buy but influence decisions of those who may

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2. Set the Objectives

• Hierarchy of effects model

Awareness Knowledge Liking PurchaseConvictionPreference

ImpliesCognition Affect ActionMay not always be the appropriate model

Some Common Communication/Promotion Tools______________________________________________________Advertising Sales Publicity Personal

Promotion Selling ____

Print & broadcast ads Contests, games, Press Kits Sales Packaging-outer sweepstakes Speeches presentationsPackaging inserts lotteries Seminars Sales meetingsMailings Premiums& gifts Annual reports TelemarketingCatalogs Sampling Charitable Incentive programsMotion pictures Fairs/trade shows donations Salesmen samplesHouse magazines Exhibits Public relations Fairs & trade showsBrochures & booklets DemonstrationsPosters & leaflets CouponingDirectories RebatesReprints of ads Low-interest financingBillboards EntertainmentDisplay signs Trade-in allowancesPoint of purchase displays Trading stampsAudiovisual material Tie-insSymbols & logos

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Sampling

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2. Set the Objectives

IMMEASURABLE– Increase awareness

– Motivate purchase behavior

MEASURABLE– Increase awareness among 18-

to 32- year olds by 25% within 3 months

– Increase market share among first time purchasers from 2% to 5% of the market within 1 year

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3. Design the Message

• What To Say (Message Content)- Appeal (Rational, Emotional, Moral), Theme, Idea

• How To Say It Logically (Message Structure)- Conclusion Drawing, One vs. Two Sided Messages

• How To Say It Symbolically (Message Format)- Print (Color, Headline, Illustration, Demonstration, Testimonial, Payoff, Image); Radio (Voice, Vocalization, Script); TV (All above)

• Who Should Say It?- Source Credibility (As Earlier Discussed)

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3. Designing the Message

• Who Should Say It?

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Step 4 - Decide On Promotional Mix

• Advertising– Public, Pervasive, Expressive, Impersonal

• Sales– Confrontive, Cultivative, Responsiveness of Buyer

• Sales Promotion– Communication, Incentive, Invitation

• Publicity and Public Relations– Credibility, Reach, Dramatization

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AIDAS and the Mix

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Push v. Pull

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Consumer v. Industrial

ConsumerProducts

IndustrialProducts

Selling Medium HighAdvertising High MediumSales Promotion High MediumPublicity and PR Low Low

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Promotional Mix For BusinessTo Business

Direct Marketing

34%

Trade Shows23%

Sales Promotion

8%

Advertising9%

Incentives17%

Public Relations

3%Sales Force

Management6%

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Promotional Mix for B to B

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Comparison of Two Most Commonly Used Promotion Tools

Advertising• Builds equity• Benefit emphasis• High marketer control• End-user is target• Pull• Can take a long time to

have effect

Trade Promotion• Not much equity built• Price emphasis• Low marketer control• Trade is target• Push• Usually effective

immediately

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5. Set the Budget

• Affordable method– Budget what is thought affordable

• Percentage of sales method• Competitive parity method• Objective and task method

– Define specific objectives– Determine tasks necessary to achieve objectives– Estimate costs of performing these tasks

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6. Measure the Results

• Attitude and awareness objectives– Pre-promotion level vs. post-promotion level

• Behavioral objectives– Changes in sales (noisy)– Test markets

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Key Take Aways

• The promotional mix• 7 Steps in developing a promotional plan

– Identify target– Set objectives– Design message– Determine promotional mix– Allocate budget– Measure results– Manage the process