Promotion and Marketing

1. 17, 18, 19 Promotion and Marketing Chapters • Promotion is the component of a firm’s marketing mix that informs, persuades, and reminds the market regarding the firm and/or its products. • It includes all the means by which a company communicates with customers. • Persuasion means to influence feelings, beliefs, or behavior. • It is an attempt to shift or change the shape of the demand curve for a firm’s goods or services.

2. Fig. 17-1 - Shifting Demand with Promotion Demand with promotion Demand with promotion Price Price Demand without promotion Demand without promotion Quantity Quantity b. Changing the shape (or elasticity) of the demand curve. a. A shift in the demand curve to the right.

3. The Promotion Mix Components Promotion/Communications Mix • Name some Promotion Mix objectives. • Increase sales, votes, desired behaviors, etc. • Create awareness, preference, loyalty • Identify prospects (sales leads) • Encourage/discourage trial, retrial • Recruit and support middlemen and sales dpt. • Hurt competitors Advertising Public Publicity Personal Sales Relations Selling Promotions

4. How Does Promotion Mix Persuade? • Each component • Provides awareness • Provides information • Differentiates the product from competition • Makes the perceived value = price • Reduces cognitive dissonance

5. Promotion Mix Components Defined • Advertising: Any paid-for type of non-personal communication by an identified sponsor. • Consumer and Business-to-Business • Primary-Demand and Selective-Demand • Product, Corporate, and Institutional • Public relations: A planned communication effort intended to make the firm appear as a good corporate citizen. • Publicity: A special form of public relations that involves creating positivenewsworthy stories about an firm and/or its products. • News releases, featured articles and TV segments • Press conferences • Product placement in movies

6. Promotion Mix Components Defined(continued) • Personal selling: The direct presentation of a product to a prospective customer by a representative of the selling organization. • Sales promotion: Demand-stimulating activity designed to supplement advertising and facilitate personal selling.

7. ExerciseAdvertising - Public Relations - Publicity - Personal Selling - Sales Promotions • How would you classify the following: • McDonald’s uses billboards to promote its free fries with a Big Mac purchase. • A Honda salesperson calls you about a new model that coming out soon. • Channel 5 news has a story about Energizer Battery’s new ad campaign. It features a commercial with the Energizer rabbit. • Quaker Oats mails a 50 cents-off coupons to 500,000 homes in L.A. county. • Kool-Aid donates two cases to a little league baseball team to use in a fundraiser.

8. The Promotional CampaignAdvertising - Public Relations - Publicity - Personal Selling - Sales Promotions • The promotional mix components are coordinated in a strategy called Integrated Marketing Communications (IMC). • When designing the IMC effort, five things should be considered: • The Target Audience • The Promotional Objective • The Nature of the Product • Stage in the Product’s Life Cycle • Funds Available for Promotion

9. Sales Promotion • Short-term, demand-stimulating activities designed to • supplement advertising, • facilitate personal selling, • support distribution channels efforts. • The target of these activities may be • target customers/end users • “The Trade”/middlemen • the producer’s own sales force

10. Fig. 17-3 - Push & PullPromotional Strategies PUSH STRATEGY Producer Wholesaler Retailer Consumer PULL STRATEGY Producer Wholesaler Retailer Consumer Product flow Customer flow Promotion effort

11. Middleman-Targeted Sales Promotions Directed to the members of the distribution channel. They are intended to . . . • Motivate: Incentives • Contests, bonuses, push money, slotting fees, promotion allowances, cooperative advertising • Inform: Advance notice • Producer’s new product • Producer’s new promotion • Often done at trade shows • Educate • Sales training and sales aides • Management training

12. Customer-Targeted Sales Promotions • They are intended to • Attract new customers • Get more business out of current customers • Types • Pricing deals: Price-off, rebate, BOGO, coupon • Premiums: Give-a-way and self-liquidator • Contests: • Skill • Chance: sweepstakes, instant win, collection • Sampling • Consumer shows • Sponsorships and event marketing

13. The Nature of Personal Selling Personal selling is the personal communication of information to persuade the target to a desired action. There is no business until somebody sells something to somebody. It is difficult to find, attract and keep high-caliber salespersons. That’s why they earn so much.

14. The New Nature of Sales Careers • The stereotypical “used car salesman” image of personal selling is outdated. It is being replaced by the professional selling of professional services by professional sales consultants. (See next slide.) • These new patterns are emerging: • Selling Centers — Team Selling • Systems Selling • Global Sales Teams • Relationship Selling • Internet Selling • Sales Force Automation

15. Table 18-1 - America’s Best Sales Forces in 1999 Company Industry Enron Corporation Energy management Dell Computer Corp.Computers Cisco Systems Computer networking GE Capital Services Financial services Pfizer Pharmaceuticals Source: “Here’s to the Winners,” Sales & Marketing Management, July, 1999, pp. 46-70.

16. What Makes a Good Salesperson • High energy level • Self-confidence (when it counts) • Competitive nature • Hunger for status, not money • Overcome their fears, especially rejection which they eventually learned to love • An expert seller of an expert nerd’s work. Money chases them.

17. Fig. 18-2 - The Personal Selling Process PROSPECTING PREAPPROACH PRESENTATION POSTSALE SERVICES Identifying: Profiles Leads Records Qualifying: Capability Willingness Information, habits, needs, & preferences of specific prospect. AIDA: Attention Interest Desire Action Reduce dissonance Build goodwill Resale

18. Fig. 18-3 - Staffing and Operating a Sales Force Recruitment and Selection Performance Evaluation Assimilation Supervision Training Compen- sation Motivation

19. Evaluating a Salesperson’s Performance • Both quantitative and qualitative factors should serve as bases for performance evaluation. • Quantitative bases are specific and objective. • Qualitative factors are limited by the subjective judgment of the evaluators. • Both inputs (or effort) and outputs (or results) should be used.