国际商务导论 Fundamentals of Business

1. 国际商务导论 Fundamentals of Business Lecture 5: Promotion

2. What to cover today： • Promotion and promotion mix • Advertising • Personal selling • Sales promotion • Public relations Exercises

3. 1. Promotion and promotion mix Promotion 促销is: -- the act of informing or reminding customers about a specific product or brand -- a way of attracting new customers, and building brand loyalty among existing customers

4. How important is promotion? • Over 75% of the price of a box of washing powder goes to pay for the costs of promoting the product. • $300 to $6,000 of the price of a new car is used to tell customers how excellent it is. • “Our leading brands begin with world-class product technology, but it’s advertising that gets consumers’ attention and persuade them to use our products again and again. Advertising is the lifeblood of our brands. … Advertising is the key driver in all our businesses, but it’s especially important for health care products – because consumers want a brand they know and trust. Advertising helps establish the trust.” -- P&G annual report

5. Promotion mix 促销组合is: -- the combination of various promotion methods that a firm uses to persuade customers to buy its products • advertising 广告 • personal selling 个人推销 • sales promotion 促销活动 • public relations 公共关系

6. 2. Advertising Advertising slogans: • Connecting people. – Nokia • Take time to indulge. – Nestle ice cream • Think different. – Apple computer • Show your true colors. – Kodak film • Impossible is nothing. – Nike • Quality never goes out of style. – Levi’s • Cleans your breath while it cleans your teeth. – Colgate • i’m lovin’ it. – McDonald’s Where can you find ads of the above brands in your daily life?

7. Advertising is: -- the paid, nonpersonal promotion of goods and services by a company using mass media to persuade or influence consumers. Costs of advertising: Frito-Lay: more than $50 million per year GNC: more than $80 million per year GM: more than $100 million per year P&G: more than $3 billion per year

8. 2.1 Types of advertising • Brand/product advertising 品牌/产品广告: about a specific brand or product Comparative advertising: to demonstrate a brand’s superiority over other competing brands Reminder advertising: to remind consumers of a product’s existence • Institutional advertising 厂商整体形象广告: to enhance the overall image of a specific institution, without focusing on any particular product, e.g. cigarette company in China • Industry advertising 行业整体形象广告: to enhance the overall image of a specific industry (usu. by industry associations), e.g. “I love milk” by Jet Lee

9. 刘翔鹤舞白沙广告被停播

12. 2.2 Media of advertising View: A new product ad campaign Brian Wood, the Head of the Marketing Department Robert Wilson, the Advertising Manager

13. Tasks: 1. Note down the various kinds of advertising media mentioned in the discussion 2. Choose the correct answer to each question.

14. C B 1. The company is going to do some promotion on ______ A. new products B. old stock C. both of the above 2. The advertising campaign for the major new products is aimed at ______ A. businessmen B. young people C. children 3. What is the weakness of ads on radio according to the conversation? A. The time is limited. B. The audience is limited C. It’s too expensive. 4. Which of the following method will be used to promote the old product lines? A. TV commercials B. posters C. discounts 5. What is not mentioned as a promotional method? A. flyers B. sponsorship C. radio A C A

15. more than 50% of total ad expenditures • Newspaper: local or national • Magazines: national or international • TV: national or local, commercials vs. infomercials (30 mins, televised separately) http://www.tudou.com/programs/view/POgcTnhWVqA • Radio: local • Internet: international • Direct mail: national or local • Yellow Pages: local • Outdoor ads: local, stationary • Transportation ads: local, moving, e.g. bus sides, taxicab roofs and doors • Specialty ads: national or local, e.g. T-shirts, hats, shopping bags, cups, umbrellas, calendars

20. 3. Personal selling Personal selling is: -- direct, face-to-face communication by salespeople with existing or potential customers to promote a company’s products sales VP sales director/supervisor regional sales manager sales rep large commissions and/or bonuses

21. 3.1 Stages of personal selling Prospecting for customers Handling objections Making the initial contact Closing the sale Making the sales presentation Doing after-sales service, follow-up, and information gathering

22. 3.2 Personal selling and CRM Customer Relationship Management (CRM) system: an IT-based knowledge management system designed to track information about a company’s customers Implementing a CRM system starts at the salesperson level: • the nature and size of customers’ purchase • their changing needs • their specific demands for price discounts or fast delivery • why or why not the prospect seems willing to purchase

23. Functions of CRM systems • track individual sales performance • identify the star salespeople • calculate the profitability of each sale • build up a detailed case history about each customer • share the information among salespeople to create the mentoring environment, and brainstorm solutions to common customer problems • educate the entire sales force • and more …

24. 3.3 Approaches to personal selling Technical selling Trade selling Complex products are sold using: Standardized products are sold using: Missionary selling Creative selling Retail selling Tele- marketing

25. Complex products: goods or services with characteristics that make them difficult for customers to evaluate Technical selling: requires sales reps to impart detailed technical information to their customers, e.g. X-ray machines, advanced scanners Missionary selling: involves a salesperson educating customers, building goodwill, and performing promotional activities such as offering product samples and literature so that the customer (agent) may purchase at a later date, e.g. pharmaceutical companies visiting doctors Creative selling: requires salespeople to combine their technical knowledge and personal selling experience to craft creative ways to better meet their customers’ needs, e.g. IBM software sales reps selling a multimillion-dollar ERP system, a real estate broker selling luxury houses, auctioneer selling works of art

26. Standardized products: goods or services that customers have less problems evaluating them Trade selling: (1) B2B in related industries, industrial goods; (2) consumer goods, but through intermediaries, such as wholesalers and retailers; principal task – negotiation Retail selling: B2C, consumer goods; principal task – provide the product information customers need Telemarketing: contact prospects exclusively by phone; either have own telemarketing dept., or use outsourcing service offered by call centers; increasingly ineffective

28. Organizational structure of a typical call center

29. Case study: When the sales call gets very personal (Jones, p294) Questions: • Why did some companies revert back to door-to-door sales? • Which approach works better in the Chinese context do you think, phone selling or door-to-door selling?

30. View: How a salesman works Pam Gordon, a salesman from Good Life Company Joe Wilson, the Manager of a furniture company Tasks: 1. Watch the video, and note down the questions of the microwave oven salesman, and the answers from his customer as shown in the flowchart. 2. Would you call Pam Gordon a good salesman? What do you think that makes a successful salesperson?

31. Q: Are your staff happy with the food served here in the canteen? A: _Not really._ Q: Your factory is located in the suburbs, so you’re a long way from town, aren’t you? A: _Yes._ Q: Are there any restaurants nearby? A: ____ Q: Why is that? A: ____ A limited selection of dishes. No. Q: If you had a choice of several more dishes, you and your staff would be happy to eat more often in the canteen. Is that right? A: ____ Q: ____? A: _About 200._ How many staff members do you have? Yes. Q: ____? A: _In a small canteen._ Where do they eat at noon? Our microwave oven can help!

33. 4. Sales promotion -- nonpersonal, persuasive efforts designed to boost a company’s sales immediately • Point-of-sale displays 销售点演示 • Sampling 试用 • Contests 竞赛 • Lotteries and sweepstakes 抽奖 • Coupons and trade stamps 优惠券，印花 • Premiums 赠品 • Trade shows 行业展 • Rebate 现金返还: a potential refund by the manufacturer (not by the retailer, vs. discount) to the consumer, e.g. 购车送现金礼包

39. 5. Public relations -- actions taken with the goal of creating or maintaining a favorable public image of the firm • Special events/sponsorship: Olympic Games, F1, Tour de France, FIFA World Cup • Publicity/news release: free ad, often prepared by the firm • Press conference: usu. for crisis management

42. Exercises 1. Translation (1) 促销组合　　(2) 传销 (3) 公共关系　　(4) 专业杂志 (5) 艺术设计　　(6) 厂商整体形象广告 (7) 传单 　　(8) 户外广告牌 (9) 潜在客户　　(10) 佣金 (11) 赞助 　　(12) 销售点演示

43. 2. Three-min mini talk Review the major media of advertising, and for each of the methods, give at least one example. Show photos, newspaper clips, or even the ad itself if possible. You may talk about: • product promoted • promotion method(s) adopted • apparent advantages and/or disadvantages of that method • product categories that most suit such a promotion method

44. 3. Group project: The Karma Coffee House was recently opened in downtown Boston. The owner, Jen Allen, wants to attract many of the people who work in major office complexes nearby. She is hoping that they will stop at Karma for coffee before they start work, after they leave work in the evening, or during breaks or for informal business meetings. Jen decides that the local businesspeople represent her target market. Karma is within a few blocks of large office buildings where thousands of people work, but it is not directly on their path to or from the metro station. Thus, those people will not be aware of the coffee house unless Jen uses promotion strategies. However, she cannot afford to spend a lot of money on promotion, so she needs to develop an inexpensive and effective promotion mix. The success or survival of Karma is highly dependent on the effectiveness of her promotion mix. Based on the above background, plan a promotion mix (effective, and inexpensive) for Jen and her Karma.

45. 4. Supplementary reading • The World of Advertising • Stages in the Selling Process (Jones, p294) • Creative Selling: Going, Going, Gone … at Sotheby’s (Jones, p291) • Telemarketing: When the Sales Call Gets Very Personal (Jones, p294)

46. Online resources for promotion methods used in China • 超市促销活动指南 http://wenku.baidu.com/view/8d8cd038376baf1ffc4fad45.html • 超市、购物中心、百货商场促销指南http://wenku.baidu.com/view/138986d63186bceb19e8bb49.html • 26种常见促销策略 http://wenku.baidu.com/view/51eb620203d8ce2f00662367.html • 13种最有效的促销方法 http://wenku.baidu.com/view/e96e896648d7c1c708a1450f.html • 杭州国大雷迪森广场酒店餐饮部2004年工作计划 http://wenku.baidu.com/view/c09f8aeb6294dd88d0d26b49.html • 肯德基秒杀门的营销分析 http://www.aimishu.com/observe/Commentary/27158.shtml • 中国移动（南京）品牌管理及推广方案 http://wenku.baidu.com/view/32e8876a561252d380eb6e04.html