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Elements of the Promotion Mix. Advertising. Ingredients of the Promotion Mix. Public Relations. Personal Selling. Sales Promotion. The Communication Process. Noise. Sender. Encoding. Channel. Decoding. Receiver. Channel. Goals and Tasks of Promotion. Informing. Reminding.

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Elements of the Promotion Mix

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Elements of the promotion mix l.jpg

Elements of the Promotion Mix

Advertising

Ingredients

of the

Promotion

Mix

Public Relations

Personal Selling

Sales Promotion


The communication process l.jpg

The Communication Process

Noise

Sender

Encoding

Channel

Decoding

Receiver

Channel


Goals and tasks of promotion l.jpg

Goals and Tasks of Promotion

Informing

Reminding

Target

Audience

Persuading


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AIDA and the Hierarchy of Effects

Purchase

Conviction

Preference

Liking

Knowledge

Awareness

Attention

Interest

Desire

Action


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When Elements of Promotion Are Most Useful

Advertising

Personal

selling

Effectiveness

Sales

promotion

Public

relations

Awareness

Knowledge

Liking

Preference

Conviction

Purchase

Very effective

Somewhat effective

Either not effective or inefficient


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Factors that Affect the Promotion Mix

Nature of the Product

Stage in the Product

Life Cycle

Target Market Characteristics

Type of Buying Decision

Available Funds

$ $ $

Push–and–Pull Strategies


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Creating a Promotion Plan

Analyze the Marketplace

Identify Target Market

Set Promotion Objectives

Develop Promotion Budget

Choose Promotion Mix


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Criteria for Setting Promotion Objectives

Promotion objectives should:

be measurable, concrete

be based on sound research, with a

well-defined target audience

be realistic

reinforce the overall marketing plan and

relate to specific marketing objectives


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Examples of Promotion Objectives

Objective: ToInform (Awareness)

To increase the top-of-mind awareness level for Peter Pan peanut butter from 16 percent to 24 percent

Objective: To Persuade (Attitudinal)

To increase the percentage of parents who feel that Peter Pan peanut butter is the best peanut butter for their children from

22 percent to 35 percent

Objective: To Remind

To remind consumers that Peter Pan peanut butter is the creamiest peanut butter and is available at their nearest grocery and convenience stores


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Techniques for Setting Promotion Budgets

• Arbitrary Allocation

• All - You - Can - Afford

• Competitive Parity

• Percent of Sales

• Market Share

• Objective and Task


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Regulation of Promotion

Self-Regulation

• National Advertising Division (NAD)

• National Advertising Review Board (NARB)

Federal Regulation

• Federal Trade Commission (FTC)


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Effects of Advertising

Diminishing

returns

on additional

spending

Increasing efficiency

as ad budget becomes

sufficient

Return on Advertising Expenditures

Advertising Spending


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Major Types of Advertising

Corporate Image

Institutional

Advertising

Advocacy Advertising

Types

of

Advertising

Pioneering

Product

Advertising

Competitive

Comparative


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Advertising Campaign Decision Process

Determine the campaign objectives.

Make creative decisions.

Make media decisions.

Evaluate the campaign.


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Common Advertising Appeals

Profit

Save money, keep from losing money

Health

Body-conscious, healthy

Love or Romance

Sell cosmetics and perfumes

Fear

Social embarrassment, growing old, losing health, power

Admiration

Celebrity endorsement effective

Convenience

Fast-food and microwave products

Fun and Pleasure

Vacations, beer, amusement parks

Vanity and Egotism

Expensive, conspicuous items


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Executional Styles for Advertising

Scientific

Slice-of-Life

Musical

Lifestyle

Common

Executional

Styles

Demon-

stration

Spokes-person/

Testimonial

Mood or Image

Fantasy

Real/

Animated

Product

Symbols

Humorous


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Methods Used to Evaluate Advertising Campaigns

Pretests

Examples:

• Consumer jury tests

• Portfolio or unfinished rough tests

• Physiological tests

Post-tests

Examples:

• Recognition tests

• Recall tests

• Attitude measures

• Audience size measurement


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The Tools of Public Relations

New Product Publicity

Product Placement

Major

Tools

Used By

PR

Professionals

Customer Satisfaction

Phone Lines

Consumer Education

Event Sponsorship

Issue Sponsorship

Web Sites


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Types of Consumer & Sales Promotion Goals

Type of buyerDesired resultsSales promotion examples

Loyal customersReinforce behavior,•Loyalty marketing programs,

People who buy yourincrease consumption,such as frequent-buyer cards

product most or allchange purchase timing or frequent-shopper clubs

of the time•Bonus packs that give loyal

consumers an incentive to

stock up or premiums offered

in return for proofs-of-purchase

Competitor’sBreak loyalty, persuade •Sampling to introduce your

customersto switch to your brandproduct’s superior qualities

People who buy acompared to their brand

competitor’s product•Sweepstakes, contests, or

most or all of the timepremiums that create interest

in the product

Brand switchersPersuade to buy your•Any promotion that lowers the

People who buy abrand more oftenprice of the product, such as

variety of productscoupons, price-off packages,

in the categoryand bonus packs

•Trade deals that help make the

product more readily available

than competing products

Price buyersAppeal with low prices•Coupons, price-off packages,

People whoor supply added valuerefunds, or trade deals that

consistently buy thethat makes price lessreduce the price of brand to

least expensive brandimportantmatch that of the brand that

would have been purchased

Source: From Sales Promotion Essentials, 2E by Don. E. Schultz, William A. Robinson, and Lisa A. Petrison. Reprinted by permission of NTC Publishing Group, Lincolnwood, IL.


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Tools for Consumer Sales Promotion

Coupons

Premiums

Six

Categories

of

Consumer

Sales

Promotions

Frequent Buyer Programs

Contests and

Sweepstakes

Samples

Point-of-Purchase

Displays


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Trade Allowances

Push Money

Six

Categories

of

Trade

Sales

Promotions

Training

Free Merchandise

Store Demonstrations

Business Meetings,

Conventions, Trade-Shows

Tools for Trade Sales Promotion


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Advantages of Personal Selling

Detailed Information

Message Control

Targeted

Cost Control

Closing Sales


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Advertising Versus Personal Selling

Personal Selling is more important if...

The product has a high value.

It is a custom-made product.

There are few customers.

The product is technically complex.

Customers are geographically concentrated.

Advertising/Sales Promotion is more important if...

The product has a low value.

It is a standardized product.

There are many customers.

The product is simple to understand.

Customers are geographically dispersed.


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Differences Between Traditional & Relationship Selling

Traditional Personal Selling

Sell products (goods and services)

Focus on closing sales

Limited sales planning

Spend most contact time telling customers about product

Conduct “product-specific” needs assessment

“Lone-wolf” approach to the account

Proposals and presentations basedon pricing and product features

Sales follow-up focused on product delivery

Relationship Selling

Sell advice, assistance, and counsel

Focus on improving the customer’s bottom line

Considers sales planning as top priority

Spend most contact time attempting to build a problem-solving environment with the customer

Conduct discovery in the full scope of the customer’s operations

Team approach to the account

Proposals and presentations based on profit impact and strategic benefits to the customer

Sales follow-up is long term, focused on long-term relationship enhancement

Source: Robert M. Peterson, Patrick L. Shul, and George H. Lucas, Jr., “Consultative Selling: Walking the Walk in the New Selling Environment,”

National Conference on Sales Management, Proceedings, March 1996.


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Steps in the Selling Process

Generating Sales Leads

Qualifying Sales Leads

Basic

Steps in

the

Selling

Process

Making the Sales Approach

Making the Sales Presentation

Handling Objections

Closing the Sale

Following Up


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Functions of Sales Management

Set Sales Objectives

Evaluate Sales Force

Structure Sales Force

Major Tasks of Sales Management

Manage Turnover

Determine Sales Force Size

Motivate Sales Force

Develop Compen-sation Plan

Train Sales Force

Recruit Sales Force


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200

150

100

50

0

1

2

3

4

5

6

7

8

9

10

Cost Determinants of Price

MC

ATC

Dollars

AVC

AFC

Quantity


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Break-Even Analysis

Total Revenue

Profits

Break Even

Total Costs

Price ($)

Fixed Costs

Losses

Quantity (units)


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Steps in Setting the Right Price

Establish Pricing Goals

Estimate Demand, Costs,

and Profits

Choose Strategy

Fine-Tune Base Price

$ $ $ $ $ $ $ $

Right Price


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Legal and Ethical Issues in Pricing

Unfair Trade Practices

Key Legal

and Ethical

Issues

Related to

Price

Price Fixing

Price Discrimination

Predatory Pricing


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Cash

Discount

EDLP

Quantity

Discount

Seasonal

Discounts

Functional

Discount

Promotional

Allowances

Trade Loading

Rebates

Discounts, Allowances, and Rebates

Price

Reductions


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Geographic Pricing

FOB Origin

Uniform Delivered

Pricing

Tactics

Based on

Geography

Zone Pricing

Freight-Absorption

Basing-Point


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Special Pricing Tactics

Single

Price

Two-Part

Pricing

Flexible

Pricing

Common

Special Pricing

Tactics

Bundle

Pricing

Professional

Services

Odd-Even

Pricing

Price

Lining

Bait

Pricing

Leader

Pricing


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