Strategic Promotion Mix for Product Success

1. Promotion • The use of advertising, sales promotion, personal selling, direct mail, trade fairs, sponsorship and public relations to inform consumers and persuade consumers to buy. • Advertising – TV ads, print ads, billboards • Sales promotion – sales, coupons, loyalty programs • Direct mail – mass mailings • Trade fairs – booths at trade fairs (Southern Home Show) • Sponsorship – NASCAR, tennis players, golfers, TV shows paid to display or promote a particular product • Public relations – controlled publicity and advertising

2. Promotional Mix • The promotional mix is the combination of efforts that are used to promote a product. • They must send a consistent message to be successful.

3. Why do we PROMOTE? • Increase sales by increasing consumer demand • Remind consumer of exiting products and why they are special • Attract new buyers • Demonstrate the superior quality of product as compared to its competitors – often occurs after a product has been updated • Create or reinforce the brand image • Correct misleading reports about the product or the business and reassure consumers after a “scare” or “accident” • Develop or adapt the public image rather than the product • Encourage stocking by retailers

4. Promotion Types • Above-the-line promotion • Purchasing communication with the consumer – AKA – advertising • Below-the-line promotion • Short-term incentives to encourage consumers to purchase the product Above-the-line Promotions that are visual & auditory TV Ads, billboards,radio, print ads Below-the-line Promotions that are tactile Samples, coupons, loyalty programs, games, price deals

5. Above-the-line Promotion • Advertising • Communicating information about a product or business through the media such as radio, TV, newspapers, magazines, or billboards. • Informative Provide information to potential customers like, price, features, technical specifications, or where to purchase • Persuasive Trying to create a distinct image or brand identity

6. Which media to use? • Cost • TV and radio can be expensive to purchase and produce. • Print media can be less expensive • Profile of the target audience • What is the best media to reach your audience? • Type of product message to deliver • Written forms are best for detailed information about a product • Link between the marketing mix and advertising media. Are they consistent and sending a similar message? • The law and other barriers • Are there bans on certain types of advertising? (Tobacco, alcohol, adult imagery or language)

7. Below-the-line Promotion • Sales promotions are used to generate short-term gains in sales. • Sales or price deals – a temporary reduction in price • Loyalty programs – airline miles, points earned to redeem for other products and gifts • Coupons • Point-of-sale displays – aisle interrupters, dump-bins • BOGOF – buy one, get one free offers • Games and competitions • Public relations • Sponsorships

8. Sales Promotions • Sales promotions can be targeted to two groups • Final consumer – encourages consumers to purchase (PULL Strategy) • Distribution channel or Retailer – encourage stocking and display to encourage more sales (PUSH Strategy)

9. Promotion Mix • The combination of promotional techniques that are used to communicate the benefits of the product to the consumer • Decide on the image of the product • Develop a profile of the target market • Decide on the messages to communicate • Set an appropriate budget • Decide how the messages should be communicated • Establish how the success of the promotional mix is to be assessed • Execute the promotional plan • Measure its success

10. PLACE • How should products pass from the manufacturer to the final customer? • Channel of distribution: the chain of intermediaries a product passes through from producer to final consumer

11. Distribution Channel is Important • Consumers need easy access to the firm’s product where they can see it, touch it, buy it, return it. • Manufacturers need distribution that provides a wide market coverage. • Retailers need to mark-up the product to cover the costs of sales.

12. Developing a Channel strategy • Should the product be sold directly to the consumer? • Should the product be sold through retailers? • How many intermediaries? • Where should the product be sold? • Should electronic distribution be used? • How much will it cost to stock products on store or warehouse shelves? • How well the distribution channel support other components of the marketing mix?

13. Factors influencing the channel • Industrial products tend to be sold more directly to its customers than durable goods. • Geographic area of target market – where are my customers? The wider area, the more likely intermediaries will be needed. • Level of service expected from customers. • Technical complexity of the product. • Unit value of the product (the more expensive the more likely to be sold as individual units and direct sales)….think airplanes • Number of customers (the more customers the larger the need for wide distribution and intermediaries)… think toilet paper

14. Direct Selling • Manufacturer to Consumer Product/Service Manufacturer Consumer

15. Single-Intermediary Channel • Manufacturer to a Retailer to a Customer Manufacturer Retailer Consumer

16. Two-Intermediary Channel • Manufacturer to Wholesaler to Retailer to a Customer Manufacturer Warehouse Retailer Consumer

17. Recent trends in distribution • Increased internet and direct selling of goods and services • Large supermarkets that act as wholesalers and retailers • Complete packages are sold….air flights, rental cars, and hotel accommodations are packaged and distributed together.

18. Effective Use of Distribution Channels

19. What is an Agent? • A business with the authority to act on behalf of another firm to market its products. • Examples: Best Buy sells HP computers and is allowed to handle customer complaints, provide sales force to sell products, and creates sales displays.

20. Supply Chain Management (SCM) • Managing the network of businesses that are involved in the provision of products to the final consumers

21. Supply Chain Management (SCM) • Coordinating these activities include: • All supply companies are kept well informed of production schedules • Making transportation arrangements for materials and finished goods • Reducing the number of suppliers • Planning production to meet consumer demand • Ensuring that adequate supplies are delivered, on time, to retailers or other intermediaries.