Promotion Strategy

Unit3

Subhajit Sanyal

Promotion

• Personal Selling

• Mass Selling

• Advertising

• Publicity

• Sales Promotion

Promotion

• communication of information

• influence the buyer

3 methods

Personal Selling

Mass Selling

Sales Promotion

Personal Selling

• direct communication between seller and buyer

• face2face contact

•Usually used to sell industrial goods and services

•Also used to sell some expensive consumer items, eg. Cars, computer systems

Mass Selling

• communicating with large numbers of potential customers

• “non”-personal selling

• used when the target market is large and dispersed

•Advertising is a form of Mass Selling

Advertising

• the main form of mass selling

• any paid form of nonpersonal communication eg. Techniques include billboard ads and TV commercials

The The generation of awarenessgeneration of awareness about a product about a product beyond regular advertising methods.beyond regular advertising methods.

Usually less costly than advertising because Usually less costly than advertising because sometimes the message is spread for free by sometimes the message is spread for free by a newspaper article or TV story.a newspaper article or TV story.

PublicityPublicity

Examples of Publicity

• famous person photographed using your product

• your product mentioned in National News in a positive way

• your product featured in a movie

• TV commentary about aspects of your product trade magazines carrying a storyeg. Road and Track doing a feature on the new Landrover

Publicity

Publicity can be negative

eg. If a famous movie star gets electrocuted using your product, this can cause people to NOT want to buy it - this would be a major problems

eg. If your product is sabotaged - this could include tampering with medical products ie. Tylenol

eg. If there are negative rumours about the ingredients in your product

eg. If there are negative ingredients about the moral aspects of your company

Publicity

Promotion People

• Sales Managers• Advertising Managers• Sales Promotion Managers

Promotion People

Sales Managers• Are concerned with managing personal selling• In small companies this person also does the

advertising and sales promotion

Promotion People

Advertising Managers• They manage the mass selling activities• They chose the company to make the commercials• Pick the billboard signs etc.• If the company is big enough they hire an outside

agency• They may also do publicity as well

Promotion People

Sales Promotion Managers• They manage the Sales Promotion activities• They decide about in-store coupons, prizes, contests etc.• They spend a lot of time visiting the retail outlets where

the product is sold

Sales Promotion Managers

- they deal with Point-of-purchase advertisingspecialty advertisingsamplescouponspremiumsloyalty points / air milesrebatescontests

People in Sales Promotion

Page 455

Sales Promotion includes:• Point-of-purchase advertising• specialty advertising• samples• coupons• premiums• loyalty points / air miles• rebates• contests

•Chpt 13 in the Marketing 106 course Copyright,

Professor W.T.G. Richardson, Seneca College

Relationship between Advertising and the Product Life Cycle

Not mentioned in your textbook

Informing

• people have to know about it, in order to buy it

Advertising that seeks to develop demand through presenting factual information on the attributes of a product or service.

Tends to be used in promoting NEW products.

Use in the Introductory Stage of PLC

Page 458 - 459

PersuadingPersuading

• when competition offers similar product, you have to “persuade” them to try yours

Advertising that emphasizes using words and/or images to try to create an image for a product and to influence attitudes about it.

Used by Coke and Pepsi re: lifestyle ads.

Used after the Introductory Stage of the PLC

Page 458 - 459

RemindingReminding

• when new competition comes along, you have to “remind” customers of your greater experience, advantages etc.

Advertising whose goal is to reinforce previous promotional activity by keeping the product’s or service’s name in front of the public.

Used in the Maturity Period and the Decline Stage of the PLC.

• Pushing through the promotion channelPushing through the promotion channel

ProducerProducer - - personal selling 2 wholesaler retailer personal selling 2 wholesaler retailer customercustomer

Promotion techniques usedPromotion techniques used

• run ads in trade magazines to make wholesalers aware of the run ads in trade magazines to make wholesalers aware of the productproduct

• provide incentives to retailers to carry the item provide incentives to retailers to carry the item “… free case of drinks “… free case of drinks with each 2 cases it buys…” page 466with each 2 cases it buys…” page 466

• run contests for salespeople to win prizes for selling the run contests for salespeople to win prizes for selling the productproduct

• Pulling through the promotion channelPulling through the promotion channel

ProducerProducer - - personal selling 2 wholesaler retailer personal selling 2 wholesaler retailer customercustomer

Promotion techniques usedPromotion techniques used

• run TV commercials so customers directly learn about the run TV commercials so customers directly learn about the product - then they go to the store and ask for it, or call around product - then they go to the store and ask for it, or call around to find out where it is soldto find out where it is sold

• give free samples to potential customersgive free samples to potential customers

• Pulling through the promotion channelPulling through the promotion channel

ProducerProducer - - personal selling 2 wholesaler retailer personal selling 2 wholesaler retailer customercustomer

Sometimes you do “pulling” when the Middlemen Sometimes you do “pulling” when the Middlemen cannot be pushed, that is they already have a cannot be pushed, that is they already have a competitors product, so the way to get Middlemen to competitors product, so the way to get Middlemen to WANT to carry the product, is to have customers ask WANT to carry the product, is to have customers ask for it. for it.

Potential Mail RecipientsPotential Mail Recipients

Once your name is on a list for a newspaper Once your name is on a list for a newspaper subscription, your name and address can subscription, your name and address can be “sold” to another company who will mail be “sold” to another company who will mail you information to try and convince you to you information to try and convince you to buy their product.buy their product.

Buying and selling lists (databases) of such Buying and selling lists (databases) of such names is big business.names is big business.

Comparison of Direct Marketing and General AdvertisingComparison of Direct Marketing and General Advertising

Direct MarketingDirect Marketing General AdvertisingGeneral Advertising

Selling to individuals. Customers areSelling to individuals. Customers are Mass selling. Buyers identified as broadMass selling. Buyers identified as broadoften identifiable by name, address, andoften identifiable by name, address, and groups sharing common demographic andgroups sharing common demographic andpurchase behaviour.purchase behaviour. psychographic characteristics.psychographic characteristics.

Products have added value or service.Products have added value or service. Product benefits do not always includeProduct benefits do not always includeDistribution is important product benefit.Distribution is important product benefit. convenient distribution channels.convenient distribution channels.

The medium is the marketplace.The medium is the marketplace. Retail outlet is the marketplace.Retail outlet is the marketplace.

Marketer controls product until delivery.Marketer controls product until delivery. Marketer may lose control as productMarketer may lose control as productenters distribution channel.enters distribution channel.

Advertising used to motivate anAdvertising used to motivate an Advertising used for cumulative effectAdvertising used for cumulative effectimmediate order or inquiry.immediate order or inquiry. over time to build image, awareness,over time to build image, awareness,

loyalty, benefit recall. Purchase actionloyalty, benefit recall. Purchase actiondeferred.deferred.

Repetition used within ad.Repetition used within ad. Repetition used over time.Repetition used over time.

Consumers feel high perceived risk – Consumers feel high perceived risk – Consumers feel less risk – have directConsumers feel less risk – have directproduct brought unseen. Recourse isproduct brought unseen. Recourse is contact with the product and directcontact with the product and directdistant.distant. recourse.recourse.

Adoption Process

• Innovators• Early Adopters - sales people concentrate their efforts here

• Early majority• Late majority• Laggards, or nonadopters

Setting the promotion budget

Most common method is based on using Most common method is based on using past percentagespast percentages- that is to say,,,,- that is to say,,,,

If you sold $ 1,000,000 and you spent 20% If you sold $ 1,000,000 and you spent 20% on advertising, which = $200,000on advertising, which = $200,000

then,then,

if you spend $400,000 you should sell $2 if you spend $400,000 you should sell $2 million!million!

Setting the promotion budget

Other methods - used in real worldOther methods - used in real world

• Matching what competition spendsMatching what competition spends

• Based on what is required to get number Based on what is required to get number of customers that will meet corporate of customers that will meet corporate objectives - objectives - called the Task Methodcalled the Task Method- sometimes stated as a % of sales- sometimes stated as a % of sales