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Chapter 8: Promotion — Introduction to Integrated Marketing Communications

Chapter 8: Promotion — Introduction to Integrated Marketing Communications. 1. Know the promotion methods. 2. Understand the integrated marketing communications concept. 3. Know how the communication process affects promotion planning.

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Chapter 8: Promotion — Introduction to Integrated Marketing Communications

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  1. Chapter 8: Promotion — Introduction to Integrated Marketing Communications

  2. 1.Know the promotion methods. 2. Understand the integrated marketing communications concept. 3. Know how the communication process affects promotion planning. 4. Understand how new customer-initiated interactive communication is different. 5. Understand the importance of promotion objectives. 6. Know pushing and pulling strategies. 7. Understand how promotion blends typically vary over the adoption curve and product life cycle. 8. Understand how to determine promotion budgets. 9. Understand the important new terms. Chapter Objectives When you finish this chapter, you should

  3. 1. What is promotion? • Promotion (p419)– communicating information between the seller and a potential buyer or others in the channel to influence attitudes and behaviour. • Promotion job – to tell target customers that the right products is available at the right place at the right price.

  4. 2. Basic Promotion Methods (p420) Target Market Product Place Promotion Price Direct Promotion Personal Selling Mass Selling Sales Promotion Advertising Publicity 3 Exhibit 14-1

  5. Personal selling (p420) • Direct spoken communication between sellers and potential customers. • Flexibility (face-to-face, immediate feedback) • Expensive

  6. Mass selling (p420) • Communicating with large numbers of potential customers at the same time. • Less flexible, less expensive • Advertising – any paid form of non-personal presentation of ideas, goods, or services by an identified sponsor. (pervasive, expressive, impersonal) • Publicity – any unpaid form of non-personal presentation of ideas, goods, or services. (credible, off guard)

  7. Sales promotion (p421) • Promotion activities (excluding advertising, publicity, and personal selling) that stimulate interest, trial, or purchase by final customers or others in the channel. (incentive, invitation) • Exhibit 14-2 Examples of sales promotion activities (p421)

  8. Sales Promotion Activities Aimed at final consumers or users Aimed at middlemen Aimed at company’s own sales force Contests Coupons Aisle displays Samples Trade shows Point-of-purchase materials Banners and streamers Trading stamps Sponsored events Price deals Promotion allowances Sales contests Calendars Gifts Trade Shows Meetings Catalogs Merchandising aids Contests Bonuses Meetings Portfolios Displays Sales aids Training materials

  9. Direct promotion (p426) • Direct-response promotion - Direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling. • Medium: Direct-mail, telephone, print, computer networks, broadcast, interactive video, etc.

  10. 3. How marketers communicate with markets • The traditional communication process (p423) • Customer-initiated interactive communication (p428) 4

  11. Source Encoding Message channel Decoding Receiver Noise Feedback The Traditional Communication Model Message interpretation

  12. Communication process • A source trying to reach a receiver with a message.

  13. Source • Source – the sender of a message.

  14. Receiver • Receiver – the target of a message in the communication process, usually a potential customer.

  15. Noise • Noise – any distraction that reduces the effectiveness of the communication process.

  16. Encoding • Encoding – the source in the communication process deciding what it wants to say and translating it into words or symbols that will have the same meaning to the receiver.

  17. Decoding • Decoding – the receiver in the communication process translating the message.

  18. Message channel • Message channel – the carrier of the message.

  19. Encoder Common frame of reference Decoder Message Interpretation The same message may be interpreted differently by the encoder and the decoder Selective exposure Selective distortion Selective retention

  20. Receiver (Customer) Source’s Message Search Noise Select a topic Message channel Customer-Initiated Interactive Communication Exhibit 14-5

  21. Managing promotion (P430) • Integrated marketing communication • Setting promotion objectives • Pulling and pushing strategies • Adoption processes guide promotion planning • Promotion blends vary over the life cycle • Setting the promotion budget

  22. Integrated marketing communication • The intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message. (P433) • In a firm • In a channel

  23. Promotion objectives (P433) • General objective- to increase sales • Informing – informing the customers about a new product and show that it meets consumer needs better than other products. • Persuading – developing a favourable set of attitudes so that customers will buy- and keep buying – its products. • Reminding – reminding the customers of their past satisfaction and keep them from shifting to a competitor. chart Promotion and AIDA

  24. Promotion and the Demand Curve (P434) Price Price Price D2 D1 D2 D1 D2 D1 0 0 0 Quantity Quantity Quantity A. To be more elastic B. To the right

  25. Promotion Objectives Adoption Process AIDA Model Attention Interest Desire Action Informing Persuading Reminding Awareness Interest Evaluation Trial Decision Confirmation { } } Promotion and the AIDA Model

  26. Push-Pull Strategies • Pushing (p437) – Using normal promotion effort – personal selling, advertising, and sales promotion – to help sell the whole marketing mix to possible channel members. • Pulling (p439) – Using promotion to get customers to ask intermediaries for the product.

  27. Producer’s Promotion Blend Personal Selling, Sales Promotion, Advertising, Publicity Wholesaler Promotion Push Wholesaler Promotion Push Promotion to Channel Members Retailer Promotion Push Promotion to Business Customers Promotion to Final Customers Business Customer Pull Final Consumer Pull Push-Pull Strategies(p437,439) Exhibit 14-8 14-13

  28. Promotion blends vary over the life cycle • Market introduction stage • Market growth stage • Market maturity stage • Sales decline stage

  29. Market introduction stage • This new idea is good! • Informative • Primary demand: that is demand for the general product idea, not just for the company’s own brand. • Sells promotion encourage customers to try it.

  30. Market growth stage • Our brand is the best! • Persuasive • Selective demand: that is demand for a company’s own brand. • More potential customers are trying and adopting the products. • Mass selling may be more economical

  31. Market maturity stage • Our brand is better, really • More persuasive • Mass selling and sales promotion dominate • Business products may require personal selling • Strong brands can use reminding promotion • Less expensive

  32. Sales decline • Who still want our product? • Promotion spends decreases • Targeted promotion needed

  33. Percentage of Sales ???? ???? ???? ???? ???? Match Competitors Per Unit Uncommitted Resources Task Method Setting the Promotion Budget End

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