Benefits of Promotion in Marketing Strategies

1. Marketing Indicator 4.01 Acquire a foundational knowledge of promotion to understand its nature and scope.

2. Users of Promotion • Businesses • Government • Special interest groups • Producers • Middlemen • Individuals

3. Describe Benefits of Using Promotion • Increased sales • Use promotion to “spread the word” to customers that they offer certain products, hopefully convincing those customers to buy. If a business is managing its operations effectively, increased sales should lead to increased profits. • Strong position • As a result of promotion, businesses and organizations are perceived in certain ways by customers. Sales-oriented companies may use promotion to position themselves as more customer-friendly and harder working than their competitors. Political candidates often use promotion to position themselves as champions of certain causes, such as improved healthcare or lower taxes. Organizations advertise their positions on issues by using slogans such as “Buy American” and “Save the Whales.” • Increased customer loyalty • Businesses spend billions of dollars on promotion to create specific company images. Customers identify with these images and see themselves in the roles or lifestyles shown in the promotions. For example, American Eagle Outfitters and Hollister project an image of style and fashion. Some customers will buy clothes only from specific stores that project the “right” kind of image. Other customers are loyal to certain discount stores, such as Wal-Mart or Target, because of the image of quality products at reasonable prices.

4. Describe Benefits of Using Promotion…..continued • Increased product/company awareness • Helps customers to learn that products exist and where they are available. After seeing a promotion for the Nintendo Wii, for example, customers may not immediately buy the gaming system. However, they will be aware that the Wii exists, and they will know where they can buy one. Then, the next time customers are in the market to buy a gaming system, they may remember the Wii promotion and choose Nintendo. • Better informed, more satisfied customers • Customers are better informed when businesses promote product benefits, features, and prices. Informed customers are in a better position to choose between or among products and make buying decisions that will best satisfy their needs. • Increased employment opportunities • Millions of people are employed in the field of promotion. Many companies hire staff and maintain their own in-house promotional departments. Others hire the services of professional public relations and advertising agencies. Promotion also encourages demand. When demand for a product increases, businesses must be able to produce the product in the desired quantities. Therefore, promotion helps to create a need for mass production which in turn creates a need for more jobs. • Increased Media support • Promotion helps to pay for mass media—television, radio, newspapers, magazines, Internet, etc. Without promotional dollars from advertisers, mass media would probably pass along their costs to the media users—that means all of us!

5. The Costs Associated with the Use of Promotion • Costs associated with each task involved. • Advertising fees • Costs for sales promotions and contests • Salaries for promotional and sales staffs.

6. Types of Promotional Objectives • To inform • New products • Products with new uses • Educate about product uses • About any product or idea • The more complex a product is, the more detailed and informational the promotion needs to be to educate customers • To persuade • Product • Certain views or opinions. • Some sort of action in customers • Purchase their products over competitive products • New company image • To remind • The company actually exists • Established products • Established companies

7. The Relationship between Promotion and Marketing • Promotion is the marketing function needed to communicate information about goods, services, images, and/or ideas to achieve a desired outcome. • It is the marketing communication that involves sending a marketing message to a target audience.

8. Types of Product Promotion • Primary – aims to stimulate demand, or desire, for an entire class of goods or services. • The emphasis is on the product and its uses, rather than on a particular brand. • Ex: Cattlemen’s Beef Board or the National Pork Board • Secondary -- used to stimulate demand for a specific brand of a product. • Once the product class is already established, efforts can be focused on promoting a brand and its features or benefits. • Ex: Coke or Pepsi

9. Uses of Product Promotion • To persuade customers to buy a particular good or service • To compete against other industries, such as soft drinks versus fruit juices. • To stimulate purchases of goods or services • To compete against other makers of the same type of product, such as Coca-Cola versus Pepsi.

10. Types of Institutional Promotion • Public service – insurance companies sometimes promote improved health through changes in dietary and exercise habits • Public relations – Corporations contribute to local schools through the National Backpack Program • Patronage -- local spa tell customers about a new location or extended hours

11. Uses of Institutional Promotion • Create a certain image of the company in the customers’ eyes. This can be accomplished by informing customers about the company, its ideas, and its philosophy • Change a particular attitude toward a firm or its products • Inform customers of the company’s interest in social or environmental issues • Inform the public about the company’s future • Inform customers of the company’s name and its type of business • Show the company’s commitment to quality, technology, or research • Enhance company morale and recruit new employees • Build or reinforce a favorable company image

12. Promotional Activities Advantages Disadvantages • Encouraging customers to purchase and use new and improved products. • Adds to economy and the jobs they create. • The mass communication media—radio, television, newspapers, and magazines—are either partially or completely supported by promotional dollars. • Create awareness of the company and its products. • Develop or enhance a company’s image. • Deceptive • manipulates consumers • Offensive • create and reinforce stereotypes • plays upon people’s fears • limited abilities

13. Elements of the Promotional Mix • Personal selling • Advertising • Sales promotions • Publicity

14. Examples of Promotions According to the Elements of the Promotional Mix • Personal selling • Girl Scout cookies • Real Estate • Advertising • TV ad for Chili’s • Billboard for Buffalo Wild Wings • Internet ad for auto loan • Sales Promotions • Coupons • Product samples • Publicity • Businesses donate computers to an after school program • Organization donates supplies for a Habitat house

15. The Importance of the Promotional Mix • Must meet the needs of the target market and fulfill the organization’s overall goals • Must communicate the benefits of products and services to customers in order to generate sales and profits. • Promotion is, therefore, about companies communicating with customers.

16. Factors that Affect the Promotional Mix • Type of product – convenience, shopping, or specialty? • Stage in the product life cycle – introduction, growth, maturity, or decline? • Target market characteristics – type of customer? number of customers? geographic location? • Channels of distribution–intermediaries or direct? • Product’s company– historical perspective, available funds, or company’s competition?

17. Describe How The Product Being Sold Affects The Promotional Mix • Convenience products • Advertising and sales promotion are used to promote convenience goods because customers are typically already familiar with these products • Shopping products • Goods and services that are purchased after a customer has made comparisons of competing products (i.e. checks prices, styles, colors, and qualities of different products) • Personal selling and national television are often used to promote shopping products such as cars and laptop computers. • Specialty products • Specialty goods and services have unique characteristics that are prized by customers who make special efforts to obtain them. • Customers who purchase consumer specialty products spend a good deal of time making their selections. • Typically require more personal selling so that customers can learn about product features as well as how to operate the products. • Examples of consumer specialty products • Expensive jewelry • Rare antiques • Examples of industrial specialty products include • Complicated medical equipment • Sophisticated computer software

18. How the Product’s Market affects the Promotional Mix • Type of customer • If a product is used primarily by a personal consumer market, the promotional mix could emphasize advertising, sales promotion, and publicity. • Advertising and sales promotion also work well when promoting a product to informed or repeat buyers. • If the product is used primarily by industrial customers, personal selling must be emphasized. • Number of customers • If a product has few customers, it can be effectively promoted through the use of personal selling. • If there are vast numbers of customers for a product, advertising and sales promotion would probably work best. • Geographic location • If customers are located close together, the product can be promoted through personal selling. • If customers are spread over a wide area, advertising and sales promotion would probably be used.

19. How the Distribution System Affects the Promotional Mix • If there are multiple intermediaries between the manufacturer and the consumer, more personal selling is used. • When the distribution channel is direct from the manufacturer to the ultimate consumer, personal selling and advertising can be used effectively. • Manufacturers must also decide to whom they want to promote their products. • Push promotional strategies • Some producers utilize push strategies, meaning that they promote their products to intermediaries who then promote the products to consumers. • For example, a software developer might utilize personal selling to promote (push) its newest technology to intermediaries who promote (push) the computer programs to consumers through advertising and sales promotion. • Pull promotional strategies • Producers who adopt pull strategies promote their products directly to the ultimate consumer. • Example: • A soft drink manufacturer develops a new flavor of soda. • By advertising the new drink on television and placing coupons in newspaper inserts, the company generates consumer interest in the product. • As a result, wholesalers and retailers buy the new soda from the manufacturer to meet consumer demand. • The soft drink giant pulls demand for its product from the bottom (the ultimate consumer) up.

20. How the Product’s Company Affects the Promotional Mix • Historical perspective • Many companies rely on their previous use of promotional methods to determine current promotional mixes. • They feel that what has been successful for them in the past will continue to work for them. • Although this belief may be true, there may be other more successful promotional mixes which the companies should consider or try. • Available funds • A key factor in the selection of a promotional mix is the amount of money available for promotion. • The promotional mix budget affects both the reach of promotion (the number of people exposed) and the frequency of promotion (how often people are exposed to promotion). • Businesses which allocate small amounts of money for promotion (e.g., a small bookstore or gift shop) tend to rely on local advertising and sales promotions. • Businesses which allocate large sums of money for promotion (e.g., Wal-Mart, the Gap, McDonald’s) can effectively use national advertising. • Competition • In many cases, competing businesses use very similar promotional mixes. • Many factors affecting the promotional mix will have the same or similar effects on all businesses within the same industry. • Competing businesses also tend to follow the leader. • For instance, when one restaurant offers free meals for children, competitors follow suit

21. Ethical Issues Associated with Fear-Based Advertising • Ethics in Marketing defined as a collection of principles of right conduct that shape the decisions people or organizations make. Practicing ethics in marketing means deliberately applying standards of fairness, or moral rights and wrongs, to marketing decision making, behavior, and practice in the organization. • Fear-Based Advertising defined as: • A proven set of marketing strategies and tactics used to motivate target audiences to take massive action quickly. • Desired outcomes are achieved quickly through persuasive techniques that tap into powerful emotions. • The objective is to focus attention on the painful consequences of inaction contrasted with the hope of a desired future. • These marketing techniques are best used when credible threats are combined with uncertainty and doubt. • FUD = Fear, uncertainty, and doubt • Fear-based advertising s upon a potential customer’s fear of missing out, to stimulate them into purchasing a product before they’re ready to do so. • Fear is also used as a way to suggest that, if you don’t purchase the product, all sorts of bad things will happen to you. You won’t make a million in 30 days, you won’t be able to quit your day job, people won’t like you, etc. • Begin with three-powerful words: "In my experience..." For instance, "In my experience, I wouldn't be here today without the help of (fill in the blank) drug, car, doctor, etc." • Then take message frequency and pair it with something relevant, and you have fear-based advertising. • TARGETING - finding and reaching the maximum number of qualified prospects at the lowest possible cost - in part by leveraging proven high-tech marketing systems that enable you to measure and manipulate every aspect of your online marketing campaigns in seconds at the click of a button; and, • POSITIONING - persuading the maximum number of your prospects to buy from you by using high-touch sales techniques that tap into the most powerful motivating emotions - FEAR and HOPE. • Think about the following: A major decisions that we've made in our lives, they are a result of fear. Don't get an A in chemistry = don't go to a good college = don't make any money = end up homeless = end up alone = end up in Potter's Field.

22. Ethical Issues Associated with Fear-Based Advertising • Tapping into our fear is a huge marketing tool. Why? Because we humans respond to bad news, situations, stories, etc. The fear factor causes us to act. It’s basically the “fight or flight” response. Some of you may be questioning my message today. That’s OK. I won’t scare you into believing what I’m saying, but do this little homework assignment – think about some of the major decisions you’ve made in your lives. They are likely to be a result of fear. So the next time you are watching the news or listening to a speech or advertisement, think about the message: Is it happy and exciting? Or, is it kindascarin’ you?   • Fear is the strongest human motivator. • Parents use fear to get their childto act or react to situations from when they were an infant. Here are a few of favorites: • "Don't play with (interject any long, slim object) or you will poke your eye out." It must work, because I have never met anyone who has actually ever poked his or her eye out. • "If you pull a face like that it will stick like that." Yep, we all know a few people this has happened to. • "If you fall out of that tree and break your legs don't come running." Makes sense. • "Don't sit so close to television or you'll go blind." I still don't sit close to the television. • Effective use of fear in advertising when provide: • high levels of a meaningful threat or important problem • high levels of efficacy or the belief that an individual’s change of behavior will reduce the threat or problem. That is, fear appeals work when you make the customer very afraid and then show him or her how to reduce the fear by doing what you recommend. • Fear-based advertising is unethical when: • engendering perceptions or attitudes that are negative or unethical • overly dramatic and graphic, • lacks social responsibility, • exploitative, • stimulates unneeded demand, and • involves inappropriate manipulative techniques

23. Sexism/Stereotyping in Advertising • Why it is important to study: • It is important because it not only focuses on the use of sexual appeals in advertising, • How ethical it is to do so • Three areas of focus • (1) if sex actually sells and if so, when and where is it being used in advertising, • (2) the use of men and women in ads of a sexual nature, • (3) the role that ethics plays in the use of sexual appeals in advertising. • Define beefcake ad and cheesecake ad • Consider the following research: Jones, Stanaland, and Gelb (1998) conducted an experiment to see how men and women responded to beefcake and cheesecake ads. A beefcake ad is an ad that has a sexy male model as the center of the ad. A cheesecake ad is an ad that has a sexy female model as the center of the ad. The study found that women had higher recognition scores for the ad showing a nonsexy male model than for the beefcake ad, and men had higher recall scores for the ad showing a nonsexy female than for the cheesecake ad. The study also found that women had lower recognition scores than men for the beefcake ad, and women viewing the cheesecake ad had higher recognition scores than women viewing the beefcake ad. Also, men had lower recall than women for the cheesecake ad. • What can Advertisers do to ease public concerns: • (1) targeting commercials as carefully as possible to avoid unnecessary conflict and to minimize the viewing of sexual appeals by people who might be disconcerted by them, • (2) heightening their own awareness of the impact of their sexual appeals on the public at large as well as on their target market, • (3) testing the effects of their commercials, not only on their target, but also on other members of the public who might see their commercials, and • (4) considering the effects of their commercials in prompting individuals, whether in their target or not, to take actions that have negative consequences

24. Ethical Issues Associated with Promotion to Children • Children are an important marketing target for certain products. • Why are children vulnerable: • Because their knowledge about products, the media, and selling strategies is usually not as well developed as that of adults • Children are not aware of marketing tactics and messages. For example, studies linking relationships between tobacco and alcohol marketing with youth consumption resulted in increased public pressure directly leading to the regulation of marketing for those products. • The use of the Internet to market to children also raises ethical issues. Sometimes a few unscrupulous marketers design sites so that children are able to bypass adult supervision or control; sometimes they present objectionable materials to underage consumers or pressure them to buy items or provide credit card numbers. When this happens, it is likely that social pressure and subsequent regulation will result. • In the United States, marketing to children is closely controlled. Federal regulations place limits on the types of marketing that can be directed to children, and marketing activities are monitored by the Better Business Bureau, the Federal Trade Commission, consumer and parental groups, and the broadcast networks. These guidelines provide clear direction to marketers. • ETHICAL ISSUES IN MARKETING TO MINORITIES • Concerns: • Ethical issues arise when marketing tactics are designed specifically to exploit or manipulate a minority market segment. • Offensive practices may take the form of negative or stereotypical representations of minorities, associating the consumption of harmful or questionable products with a particular minority segment, and demeaning portrayals of a race or group. • Ethical questions may also arise when high-pressure selling is directed at a group, when higher prices are charged for products sold to minorities, or even when stores provide poorer service in neighborhoods with a high population of minority customers. Such practices will likely result in a bad public image and lost sales for the marketer. • When targeting minorities: • Firms must evaluate whether the targeted population is susceptible to appeals because of their minority status. • The firm must assess marketing efforts to determine whether ethical behavior would cause them to change their marketing practices.

25. Ethical Issues Associated with Sales Promotion Sweepstakes, Samples, Rebates, and Premiums • avoidance of false and misleading advertising • rejection of high-pressure manipulations, or misleading sales tactics • avoidance of sales promotions that use deception or manipulations. (AMA Code of Ethics)

26. Use of Stealth Marketing • In stealth marketing people are paid to use or pitch products in public settings without disclosing the fact that they are being paid to do so. • FTC states that "the failure to disclose the relationship between the marketer and the consumer would be deceptive unless the relationships were otherwise clear from the context." • Four areas of concern: • 1) it's deceptive, • 2) it's intrusive, • 3) it can take advantage of the kindness of strangers (like the camera phone example), and • 4) it can turn family and friends into corporate spokespeople, eroding bonds of trust.

27. Ethical Issues Associated with Use of Customer Information Obtained on the Internet • PrivacyInformation collected from customers should be confidential and used only for expressed purposes. All data, especially confidential customer data, should be safeguarded against unauthorized access. The expressed wishes of others should be respected with regard to the receipt of unsolicited e-mail messages.OwnershipInformation obtained from the Internet sources should be properly authorized and documented. Information ownership should be safeguarded and respected. Marketers should respect the integrity and ownership of computer and network systems.AccessMarketers should treat access to accounts, passwords, and other information as confidential, and only examine or disclose content when authorized by a responsible party. The integrity of others’ information systems should be respected with regard to placement of information, advertising or messages • Issue: Should social networking sites allow outside parties to have access to user information?

28. Ways Businesses Use Socially Responsible Promotions • Socially responsible companies are increasing their charitable contributions and committing to making the world, or their community, a better place. • What is CSR? CSR is short for corporate social responsibility, a concept whereby businesses and organizations perform a social good or take responsibility for the impact of their activities. • Examples: • A company investing in responsible drinking and not just in promoting their alcoholic beverages. • Tyson Foods launched a campaign in Austin in which it agreed to donate 100 pounds of chicken to the Capital Area Food Bank of Texas for every comment posted on its blog. They received 658 comments in two hours and loaded up two trucks filled with chicken for the hungry • Haagen-Dazs: • Honeybees are disappearing at an alarming rate — and that’s bad news for the global food chain. Haagen-Dazs decided to create a microsite to raise awareness about the issue: “Honey bees are responsible for pollinating one-third of all the foods we eat, including many of the ingredients that define our all-natural ice creams, sorbets, frozen yogurt and bars.” • Again, smartly tying it back to the company’s core mission. The company is donating a portion of proceeds from its Haagen-Dazs honeybee brand to research on the topic, and it launched a modest Twitcause campaign through the #HelpHoneyBeeshashtag, raising $7,000 in two days last November (“Bee Buzz generated: 643,748 tweets”).

29. Technology Use in Promotion Has Changed the Way Marketers Communicate with Customers • The Internet will become a major force in how organizations communicate with a variety of constituents, customers, clients, and other interested parties. • The primary goal of marketing communication is to reach a defined audience to affect its behavior by informing, persuading, and reminding. Marketing communication acquires new customers for brands by building awareness and encouraging trial. Marketing communication also maintains a brand's current customer base by reinforcing their purchase behavior by providing additional information about the brand's benefits. A secondary goal of marketing communication is building and reinforcing relationships with customers, prospects, retailers, and other important stakeholders. • Successful marketing communication relies on a combination of options called the promotional mix. These options include advertising, sales promotion, public relations, direct marketing, and personal selling. The Internet has also become a powerful tool for reaching certain important audiences. • By communicating with customers, prospects, and others one-on-one, firms can build databases that help them meet specific needs of individuals, thus building a loyal customer base.

30. Use of Technology in Promotion Has Changed the Way Marketers Communicate with Customers • The Internet provides technology which transforms the customer communication process into a real time interaction which takes place in the customer’s home, or cubicle at work. • Blogging: • Blogging has created a new way for companies to manage their image, connect with consumers, and generate interest in and desire for their products. Direct channel of communication between the company and the consumers allowing for personalized feedback. • Blogging is a form of a direct and personalized communication model. • Corporate blogs are sponsored by a company with one or more brands and is maintained by a company employee. • Non-corporate blogs are independent and not associated with the marketing efforts of any particular company or brand. •  E-mails: • Send out promotional information to target market e-mail addresses • Banner Ads: • Banner ads, pop-ups and interstitials should still be viewed as brand promoting and not necessarily sales drivers, technology provides the ability to track how many of a website's visitors click the banner, investigate a product, request more information, and ultimately make a purchase. • Company website: • Web sites provide a new way of transmitting information, entertainment, and advertising, and have generated a new dimension in marketing: electronic commerce • Social Media (Facebook) •  Text messaging •  Instant messaging • Search engine ads • Links from one webpage to another webpage

31. Ways That the Use of Technology Positively Impacts the Promotion Function • Cost saving: Cost of Internet promotion is very less as compare to any other promotion media. • Instant reach: Flow of communication through internet is fast and instant and so reach audience instantly • Longer Impact: Content once putted on internet can be there forever so it’s not a time bound investment like hoarding, newspaper or television but a long lasting medium of message. • Saves Time: Internet marketing helps saving time as with the help of this one can send message to large number of audience in very less time.

32. Ways That The Use Of Technology Negatively Impacts The Promotion Function • Limited Reach: message promoted through internet can be reached only to the people who use computer and understand technology if one firms target market is typically old age people who don’t understand how to deal with computer this medium can't work there. • Lack of Personal Touch: As on internet marketer or sales [person can not be in personal touch with customer as they can be in direct selling or other promotional techniques, impact of tool can be less. • Authenticity: People many time don's consider information on net as authentic information and don't believe it. • Disadvantages to the consumer: • Direct marketing and Unwanted e-mails or spam with viruses attached • Direct email is a popular and common form of e-promotions, although slowly becoming the most hated my many consumers. Organisations can send e-leaflets to hundreds and thousands of respondents, hoping a small percentage will reply. The problem is that for every 100 emails sent the response rate will be 1-2!. Direct emailing is also known as SPAM which stands for Sending Persistent Annoying eMail. (SPAM). • A computer virus possibly attached to the ad • Overload of information with too many ads coming across the web site or web page constantly • A waste of advertising dollars with the company “hoping” that the consumer is seeing the ad, when research shows that we are seeing less than half of what is being advertised • Without parental control, children seeing and receiving negative ads and negative advertising messages • Bluetooth technology and companies texting ads to the cell phones (mobile media) can encroach on consumer privacy

33. Ways That Businesses Use the Internet As a Promotional Tool • Internet has now been used effectively by marketers since 1994, any organization without a strategy to utilize the Internet for marketing is probably making a big mistake. • Promotion is the transfer of information with the goal of persuading, informing, or reminding. • The promotional mix is personal selling, advertising, sales promotion, and publicity • There are many ways to use technology in the promotion function such as viral marketing (encourages others to carry your marketing message via e-mail, using their own network of relationships -- and preferably their own resources), banner ads on the internet, and Google, AdSense, pay-per-click links, paid ads in targeted e-mails, opt-in e-mail • Publicity • Sales reps • Technology is mainly used for the informing function of the promotional mix but can be used for other aspects such as personal selling. • Banner ads and AdSense are used in the advertising function of promotion. • Personal selling could be achieved through private chatrooms with employees. • Ads on frequently visited websites such as Facebook link to the company website • Television commercials motivating the viewers to purchase the product • Customers are encouraged to Bookmark the company’s site • There are only three kinds of commercial Internet activity: • You can use the Internet to provide news or information, • to sell goods or services directly online, • or as a promotional device for an offline business. • You can't use the Internet to: • Ship physical goods, cook food, or build a house, but you can certainly use it as an advertising medium, and possibly as a direct sales channel, for a business that does one of these things.

34. Technology Has Enhanced Opportunities To Contact Customers With Promotional Messages • Opportunities to contact customers exist through: • Text messaging • Bluetooth technology • E-mail target market • Instant messaging • Social media • Banner ads

35. Ways That Technology Has Facilitated the Use Of Sales Promotions • Sales promotions – short-term incentives that encourage customers to buy products or services. • Consumer promotions – sales strategies that encourage customers and prospects to buy a product or service. • Coupons – are certificates that entitle customers to cash discounts on goods or services. Companies are encouraging customers to download and print online coupons. • Groupon – started in 2008 offering deal-of-the-day coupons online for certain stores if enough customers in one city signed up to use them. • Premiums – or giveaways are low-cost items given to consumers at a discount or for free. • Deals – price packs offer short-term price reductions that are marked directly on the label or package, such as a retailer selling T-shirts for $10.50 each or $6.00 each for two or more. An insurance company such as Allstate might offer a price reduction based on a “bundle” package to include car and homeowners insurance. • Incentives – are generally for higher priced products, awards, or gift cards that are earned and given away through contests, sweepstakes, special offers, and rebates. Incentives are used to create excitement and increase sales. • Contests are games or activities that require the participant to demonstrate a skill. • Sweepstakes are games of chance. • Special offers and rebates – customers go online and register to make a purchase or receive a discount from a marketer. • Product samples – a free trail size of a product sent through the mail, delivered door-to-door, or given away at retail stores and trade shows. • Sponsorship – sponsors negotiate the right to use their logos and names on retail products to enhance their corporate image, (such as NASCAR car racing team). • Promotional tie-ins • Cross-promotion • Cross-selling • Product placement – consumer promotion that involves the verbal mention or appearance of a brand-name product in a television series, movie, or sporting event. Product placement has increased on television shows because technology allows viewers to fast forward through paid commercials. • Online Loyalty Marketing Programs – (frequent buyer, frequent shopper, or reward programs are now online). • The Internet search engine Yahoo! Awards points to users who buy from certain retailers or visit certain Web sites. • Companies use email to notify loyal customers of exclusive sales. The customer maybe directed to special online-only discounts or given a chance to try new products first. • Point-of-Purchase Displays – designed primarily by the manufacturer to hold and display their products. Usually placed in high traffic areas and promote impulse purchases. • Kiosks – stand alone structures. Web-based or display-screen kiosks disseminate information to the customers

36. Specific Applications Of Technology In Promotion • Promotion is the transfer of information with the goal of persuading, informing, or reminding. • There are many ways to us technology in the promotion function such as viral marketing, banner ads on the internet, and Google Adsense. • Technology is mainly used for the informing function of the promotional mix but can be used for other aspects such as personal selling. • Banner ads and AdSense  on the internet are used in the advertising function of promotion. • Personal selling could be achieved through private chatrooms with employees online consultants • Ads on frequently visited websites such as Facebook link to the company website • Television commercials motivating the viewers to purchase the product • Web Page • Advertising on cellular phones • SMS - Commonly Known a text message • Promote using online advertisements: Facebook, Twitter, e-mail reminders, Google, side bar ads • Online team Memorabilia stores. • Electronic ticket sales • IPod apps  • Interactive websites with personal chatrooms, and informational videos on the business. • Reader-boards • Facebook page • Commercials TV/ radio • Interactive banners on websites • Bluetooth technology • Personalized text messages sent to the phone of an individual who walks within a certain radius of a store determined through use of GPS tracking available on most new phones. For example, say an individual walks within 50 feet of a Starbucks, they would be sent a messaging urging them to visit the store and possibly offer a coupon to entice them to enter. • Public relations practitioners realize the value that web sites offer in establishing and maintaining relationships with important publics. For example, company and product information can be posted on the company's site for news reporters researching stories and for current and potential customers seeking information. Political candidates have web sites that provide information about their background and their political experience.

37. The Need For Truthfulness in Promotional Messages and Claims • “Truthfulness simply refers to the act of giving true information or facts (in exact manner) about something. • Need for truthfulness in promotional messages and claims: • The society to which advertisement is targeted or addressed has right to truthful information. • Truthful information is useful to consumers because such will help them buy or use a product or service satisfactorily after spending money to purchase it. • Such information will improve the consumer’s purchase or use experience. • Such information will help to measure the consumer’s satisfaction with the purchase and use experience. • The more truthful information the advertising supplies, the better market and sale it makes from the public. • The fact is that truthful advertising could enhance high patronage of goods so advertised and such could enhance re-sale and repeat sale. • Truthful advertising can make a dynamic contribution to rising levels of economic activity, help creates more jobs for an expanding labor force

38. The Use Of Misleading Or Inaccurate Statements In Promotion Is Regulated Federal Agency: (FTC Federal Trade Commission) has regulatory power to step in and end any potentially misleading or deceptive claims • Under the Federal Trade Commission Act: • Advertising must be truthful and non-deceptive; • Advertisers must have evidence to back up their claims; and • Advertisements cannot be unfair. • Additional laws apply to ads for specialized products like consumer leases, credit, 900 telephone numbers, and products sold through mail order or telephone sales. And every state has consumer protection laws that govern ads running in that state. What makes an advertisement deceptive? • According to the FTC's Deception Policy Statement, an ad is deceptive if it contains a statement - or omits information - that: • Is likely to mislead consumers acting reasonably under the circumstances; and • Is "material" - that is, important to a consumer's decision to buy or use the product. What makes an advertisement unfair? • According to the Federal Trade Commission Act and the FTC's Unfairness Policy Statement, an ad or business practice is unfair if: • it causes or is likely to cause substantial consumer injury which a consumer could not reasonably avoid; and • it is not outweighed by the benefit to consumers. • State Agencies: Another way consumers are protected is by state laws on deceptive trade practices. Some state laws define these practices as showing goods or services with the intention of not actually selling them as advertised. Several states have established CONSUMER PROTECTION offices as part of the state attorney general offices.

39. Laws That Protect Customers From Unwanted Promotions • Federal Communications Commission (FCC) adopted rules that prohibit sending unwanted commercial email messages to wireless devices without prior permission. • This ban took effect in March 2005. • The Federal Trade Commission (FTC) adopted detailed rules that restrict sending unwanted commercial email messages to computers

40. Laws That Protect Children From Promotional Messages • FTC works with the Children's Advertising Review Unit (CARU) • In 1974, the National Advertising Review Council (NARC) established theChildren’s Advertising Review Unit (CARU) as a self-regulatory program to promote responsible children’s advertising. CARU is administered by the Council of Better Business Bureaus (CBBB) and funded by members of the children’s advertising industry. • CARU’s self- regulatory program sets high standards for the industry to assure that advertising directed to children is not deceptive, unfair or inappropriate for itsintended audience. The standards take into account the special vulnerabilities of children, e.g., their inexperience, immaturity, susceptibility to being misled or unduly influenced, and their lack of cognitive skills needed to evaluate the credibility of advertising. • CARU monitors and reviews advertising directed to children, initiates and receives complaints about advertising practices, and determines whether suchpractices violate the program’s standards. When it finds violations, it seeks changes through the voluntary cooperation of advertisers and Website operators • The Federal Communications Commission (FCC) has adopted rules and guidelines to carry out the CTA’s (Children's Television Act of 1990) educational programming mandate. • The FCC’s rules • Limit the amount of commercial matter that may be aired in certain children’s television programming to 10.5 minutes per hour on weekends and 12 minutes per hour on weekdays. • These requirements apply to television broadcasters, cable operators, and satellite providers. • These limitations are prorated for programs that are shorter than one hour in duration. • The programming at issue for the commercial time limits is programming originally produced and aired primarily for an audience of children 12 years old and younger.

41. The Regulation Of Telemarketing • Telemarketing involves situations in which companies call consumers to sell their goods or services, or consumers call companies to make purchases in response to mailings or other forms of advertising. Telemarketing also includes sales solicitations via fax, the Internet and mail, if the consumer is encouraged to respond via the telephone, fax or Internet. • Although a large number of legitimate businesses use telemarketing to reach consumers, this method of conducting business can be easily abused by con artists looking to take advantage of unsuspecting individuals. Telemarketing fraud robs consumers of approximately $40 billion every year. • Fraudulent telemarketers ignore the law and continue to defraud people until they are caught. Regulation of: • National Do Not Call Registry: • Registering your phone number with this registry is free. You can register online at www.donotcall.gov or call 1-888-382-1222, TTY 1-866-290-4236, from the phone number you wish to register. Your number will stay registered for five years or until the number is disconnected or you remove the listing. • Telemarketers have to purchase the do-not-call list from the FTC, and they have to delete from their calling lists the phone numbers from the registry. Violators of the do-not-call provisions could be subject to penalties of $11,000 per call. • Having your number on the federal do-no-call list will not stop all unwanted solicitations. There are several exemptions to the law. For instance, if there is a "preexisting business relationship," a telemarketer can call a consumer for a period of up to 18 months after the consumer's last transaction with the seller. Also, if the call is for the purpose of conducting a survey, or is a political solicitation, or is a solicitation for a charitable organization, the Do Not Call Registry is not applicable. • Under the FTC's rules, consumers who don't want to register for the National Do Not Call Registry can still tell telemarketers that they don't wish to receive solicitations. Businesses are required to maintain lists of consumers who have made a do-not-call request, and it is a violation to call a consumer who has asked to be placed on the company's do-not-call list. This company-specific request takes precedence over the "preexisting business relationship" exemption. In other words, even if you have made a recent purchase from a company, if you tell the company you do not want to be solicited by phone, the company is required to comply with that request. Similarly, you can use the company-specific option to ask a paid fundraiser for a charitable organization to stop soliciting you by phone. • Telemarketing Laws: • The Federal Trade Commission (FTC) has adopted strict rules that offer protection against telemarketing fraud. These rules require that certain information be given to consumers and prohibit telemarketers from engaging is certain actions: • A telemarketer may not call you if you have previously asked not to be called. • A telemarketer may only call between 8:00 a.m. and 9:00 p.m. • Before starting a sales pitch, the telemarketer must tell you that the call is a sales call, the name of the seller and what is being sold. If it is a prize promotion, the telemarketer must tell you that no purchase or payment is necessary to enter the contest or win the prize. • Telemarketers may not misrepresent any information. All facts must accurately represent the goods or services, investment opportunity or prize. • Before you pay for anything, the telemarketer must tell you the total cost of the goods, any restrictions on getting or using them, and whether the sale is final. In a prize promotion, you must be told the odds of winning and that no purchase or payment is necessary to win. The telemarketer must also inform you of any restrictions or conditions for receiving the prize. • It is illegal for a telemarketer to withdraw money from your checking account without your written, verifiable, authorization. • A telemarketer cannot lie to get you to pay. • Where to complain about unwanted calls: • You can file complaints about unwanted telephone calls with the FTC at www.donotcall.gov, with the FCC at www.fcc.gov, and with the Consumer Protection Unit of your residing state’s Attorney General's Office.

42. The Regulation Of Data Privacy • The Federal Trade Commission (the government agency charged with protecting the privacy of individuals in the United States) can only take action against you if you voluntarily post a privacy statement and then deliberately violate it. • (COPPA) Children’s Online Privacy Protection Rule • Congress enacted the Children’s Online Privacy Protection Act (COPPA), in 1998. COPPA contains a requirement that the Federal Trade Commission (FTC or Commission) issue and enforce a rule concerning children’s online privacy, which the Commission did in 1999. The Children’s Online Privacy Protection Rule became effective on April 21, 2000. • The primary goal of COPPA and the Rule is to place parents in control over what information is collected from their young children online. The Rule was designed to protect children under age 13 • HIPAA The Health Insurance Portability and Accountability Act (HIPAA) also contains a substantial Privacy Rule that affects organizations that process medical records on individual citizens. HIPAA's "covered entities" include: • Health care providers • Health care clearinghouses • Health care plans • The HIPAA Privacy Rule requires covered entities to inform patients about their privacy rights, train employees on the handling of private information, adopt and implement appropriate privacy practices and provide appropriate security for patient records. For more information on HIPAA, see the Department of Health and Human Services' HIPAA Web site. • GLBA • The most recent addition to privacy law in the United States is the Gramm-Leach-Bliley Act of 1999 (GLBA). Aimed at financial institutions, this law contains a number of specific actions that regulate how covered organizations may handle private financial information, the safeguards they must put in place to protect that information and prohibitions against their gaining such information under false pretenses. • If you're thinking to yourself, "That's fine, I don't work for a bank, hospital or children's Web site, so these laws don't apply to me," stop and think again. The FTC has interpreted GLBA with an incredibly wide definition of the term "financial institution." Some examples of industries covered by GLBA include: • Banking • Securities trading • Insurance companies • Lenders • Tax preparers • Credit counselors and financial advisors • Real estate settlement services • Debt collection services

43. Actions That Can Be Taken By The Federal Trade Commission To Correct Misleading Advertising Must first establish that advertising is false or misleading: • To establish that an advertisement is false, or misleading a plaintiff ( customer) or (your competitors) must prove five things: • a false statement of fact has been made about the advertiser's own or another person's goods, services, or commercial activity; • the statement either deceives or has the potential to deceive a substantial portion of its targeted audience; • the deception is also likely to affect the purchasing decisions of its audience; • the advertising involves goods or services in interstate commerce; and • the deception has either resulted in or is likely to result in injury to the plaintiff. The most heavily weighed factor is the advertisement's potential to injure a customer. The injury is usually attributed to money the consumer lost through a purchase that would not have been made had the advertisement not been misleading. False statements can be defined in two ways: those that are false on their face and those that are implicitly false. • How does the FTC determine if an ad is deceptive? • A typical inquiry follows these steps: • The FTC looks at the ad from the point of view of the "reasonable consumer" - the typical person looking at the ad. Rather than focusing on certain words, the FTC looks at the ad in context - words, phrases, and pictures - to determine what it conveys to consumers. • The FTC looks at both "express" and "implied" claims. An express claim is literally made in the ad. For example, "ABC Mouthwash prevents colds" is an express claim that the product will prevent colds. An implied claim is one made indirectly or by inference. "ABC Mouthwash kills the germs that cause colds" contains an implied claim that the product will prevent colds. Although the ad doesn't literally say that the product prevents colds, it would be reasonable for a consumer to conclude from the statement "kills the germs that cause colds" that the product will prevent colds. Under the law, advertisers must have proof to back up express and implied claims that consumers take from an ad. • The FTC looks at what the ad does not say - that is, if the failure to include information leaves consumers with a misimpression about the product. For example, if a company advertised a collection of books, the ad would be deceptive if it did not disclose that consumers actually would receive abridged versions of the books. • The FTC looks at whether the claim would be "material" - that is, important to a consumer's decision to buy or use the product. Examples of material claims are representations about a product's performance, features, safety, price, or effectiveness. • The FTC looks at whether the advertiser has sufficient evidence to support the claims in the ad. The law requires that advertisers have proof before the ad runs. • Remedies: • Injunctive Relief Injunctive relief is granted by the courts upon the satisfaction of two requirements. First, a plaintiff must demonstrate a "likelihood of deception or confusion on the part of the buying public caused by a product's false or misleading description or advertising" (Alpo). Second, a plaintiff must demonstrate that an "irreparable harm" has been inflicted, even if such harm is a decrease in sales that cannot be completely attributed to a defendant's false advertising. It is virtually impossible to prove that sales can or will be damaged; therefore, the plaintiff only has to establish that there exists a causal relationship between a decline in its sales and a competitor's false advertising. Furthermore, if a competitor specifically names the plaintiff's product in a false or misleading advertisement, the harm will be presumed (McNeilab, Inc. v. American Home Products Corp., 848 F.2d 34 [2nd. Cir. 1988]). • Corrective Advertising Corrective advertising can be ruled in two different ways. First, and most commonly, the court can require a defendant to launch a corrective advertising campaign and to make an affirmative, correcting statement in that campaign. For example, in Alpo, the court required Purina to distribute a corrective release to all of those who had received the initial, false information. • Second, the courts can award a plaintiff monetary damages so that the plaintiff can conduct a corrective advertising campaign to counter the defendant's false advertisements. For example, in U-Haul International v. Jartran, Inc., 793 F.2d 1034 (9th Cir. 1986), the plaintiff, U-Haul International, was awarded $13.6 million— the cost of its corrective advertising campaign. • Damages To collect damages, the plaintiff generally has to show either that some consumers were actually deceived or that the defendant used the false advertising in bad faith. Four types of damages are awarded for false advertising: profits the plaintiff loses when sales are diverted to the false advertiser; profits lost by the plaintiff on sales made at prices reduced as a demonstrated result of the false advertising; the cost of any advertising that actually and reasonably responds to the defendant's offending advertisements; and quantifiable harm to the plaintiff's good will to the extent that complete and corrective advertising has not repaired that harm (Alpo). • FTC can impose fines

44. Reasons For The Regulation Of Products Used In Advertising • Protect children • Protect consumers from false or misleading information (for example, are cosmetics drugs? What about dietary supplements? Is it organic?) • Health risks involved (tobacco, alcohol, over-the-counter drugs, prescription drugs) • Protects against harm to animals

45. The Legality Of Products Used In Advertising Can Vary From Country To Country • Laws Vary Country to Country • You will need to take into account the law in every country where you are marketing. To do this, it is critical to have a team of local legal experts. Lawyers licensed in the U.S. are only authorized to provide legal advice to clients on the laws of the state in which they are admitted to practice. Have your U.S. counsel take the lead and start with a set of U.S.-compliant official rules. • Don't Forget About Cultural Issues • Bring in local experts to make sure your promotion's advertising or the prizes you are giving away don't violate any cultural norms. • Be Flexible About the Promotion Structure • For example, recent legal rulings in Canada have called into question the ability to structure a skill contest with a purchase requirement, while Hong Kong and Italy place limits on cash prizes. There are typically easy work-arounds, such as providing an alternate prize or method of entry. • Be Prepared to Administer the Promotion Differently • Certain countries will require that you advertise and administer the promotion in very specific ways. For example, some jurisdictions require publication in newspapers, while others require that the advertising and rules be in the language of the local jurisdiction. Drawings may need to be held locally and witnessed by specific individuals, and winners notified by very specific methods. Lastly, some promotions may need to be registered in foreign countries. • Privacy • Privacy law varies from country to country and, believe it or not, U.S. laws relating to the collection and use of personally identifiable information are quite lax as compared to the European versions. Therefore, the collection, storage, transfer and use of personally identifiable information require special consideration. • Don't Rely on One “Representative” Country • Don't assume that because one country in a particular region permits the practice that it will be OK in all jurisdictions in those regions. This is particularly true of Asian countries, where there certainly will be differences in the law from one country to the next. Subtle country-specific interpretations of the law can make a big difference. • Budget Time and Money to Get It Done Right • This last issue is perhaps the most important of all. Coordinating the legalities in multiple jurisdictions is certainly a bit more time consuming and expensive than the U.S. Be ready to add at least a week or two to your time line if your promotion involves more than just one or two international countries. Be prepared to pay an additional US$1,000 to US$3,000 per country for legal fees.