Promotional PlanningB2B BA 303 C 16-18Session Lindell Phillip Chew University of Missouri- St. Louis, College of Business Administration
DEFINITION • Promotion isa persuasive communications mix. It is a deliberate • attempt to communicate information which presents a company and its • products to prospective customers in a manner persuasive enough to • induce the kind of acceptance, reaction, or response desired. • THIS IS A CONTROLLED AND INTEGRATED PROGRAM OF COMMUNICATION METHODS AND MATERIALS.
THE PROMOTIONAL (COMMUNICATIONS) PLANNING PROCESS LPC1@UMSL.EDU
FUNCTIONS • The basic purpose of promotion is to present a business and its products and services to prospective customers, to communicate the need/want satisfying attributes of those products/services, to facilitate sales, and to contribute positively to the long ran performance of the business. • HOW TO SELL PRESENT CUSTOMERS ADD1T1ONAL UNITS. • GET NON CUSTOMERS TO BECOME CUSTOMERS.
FIRST REVIEW YOUR MARKETING PLAN & ITS OBJECTIVE AND THEN PURSUE THE STEPS of the PROMOTIONAL (COMMUNICATIONS) PLANNING PROCESS
Our corporate objective is to increase earnings per share from $6.71 per share to $7.71 per share • OUR MARKETING OBJECTIVE IS TO INCREASE MARKET SHARE FROM 23% TO 25%, ALSO IN ONE YEAR
STEPS SITUATIONAL ANALYSISESTABLISHING PROM0TIONAL OBJECTIVES JUSTIFICATONS DETERMINING BUDGET PLANNING, MANAGING, BLENDING THE COMMUNICATIONS EVALUATION MEASURING EFFECTIVENESS FOLLOW ON AND FUTURE PLANNING
STEPS SITUATIONAL ANALYSISMARKET TARGETS DEFINITION Current Market Additional or Potential Customer FranchisesCOMPETITION ENVIRONMENTAL FACTORS Internal (policies, profit inhibitors, financial and personnel resources) External (legal/ethical, business/economic conditions,cultural/social)
STEPS SITUATIONAL ANALYSISCRITICAL QUESTIONS Are you familiar with the strengths & weaknesses of various promotional efforts? Is outside technical/financial assistance available to enhance promotional efforts?
TYPES OF PROMOTION (EXPLICIT TOOLS)
TYPES OF PROMOTION(EXPLICIT TOOLS) • ADVERTISING • PERSONAL SELLING • SALES PROMOTION • PUBLIC RELATIONS / PUBLICITY
Any Paid Form of Nonpersonal Presentation by an Identified Sponsor. Short-term Incentives to Encourage Trial or Purchase. Sales Promotion Protect and/or Promote Company’s Image/products. Public Relations Personal Presentations. Direct Communications With Individuals to Obtain an Immediate Response. Direct Marketing The Marketing Communications Mix Advertising Personal Selling
TYPES OF PROMOTION(EXPLICIT TOOLS) • PLEASE NOTE THAT RESELLER SUPPORT OBJECTIVES AND PROGRAMS MAY ALSO BE ADDED PURPOSE TO…….. IMPROVE SUPPLEMENT CONTROL PERFORMANCE
TYPES OF PROMOTION(EXPLICIT TOOLS) • ADVERTISING paid, nonpersonal communication regarding goods, services, organizations, people, places, and ideas that is transmitted through various media by business firms, government and other nonprofit organizations, and individuals who are identified in the advertising message as the sponsor.
TYPES OF PROMOTION(EXPLICIT TOOLS) • PERSONAL SELLING involves oral communication with one or more prospective buyers by paid representatives for the purpose of making sales.
TYPES OF PROMOTION(EXPLICIT TOOLS) • SALES PROMOTION • Involves…paid….marketing communication activities • (other than advertising, publicity, or personal selling) that are intended to stimulate consumer purchases and dealer effectiveness.
TYPES OF PROMOTION(EXPLICIT TOOLS) • PUBLIC RELATIONS / PUBLICITY • . Publicity is nonpersonal public relations that is transmitted Public relations includes any communication to foster a favorable image for goods, services, organizations, people, places, and ideas. It may be personal or nonpersonal, paid or nonpaid, and sponsor controlled or not controlled through media but not paid for by an identified sponsor.
RECEIVER(s) Message Media Encoding Decoding Noise Feedback Response Elements in the Communication Process SENDER (source)
Decide on Explicit Communications Mix Advertising Public, Pervasive, Expressive, Impersonal Sales Promotion Communication, Incentive, Invitation Public Relations & Publicity Credibility, Surprise, Dramatization Personal Selling Personal Confrontation, Cultivation, Response Direct Marketing Nonpublic, Customized, Up-to-Date, Interactive
Product Life-Cycle Stage Push vs. Pull Strategy Buyer/ Readiness Stage Type of Product/ Market Factors in Developing Promotion Mix Strategies
Push Versus Pull Strategy Interme- diaries End users Marketing activities Marketing activities Demand Marketing activities Interme- diaries End users Demand Demand Producer Push Strategy Producer Pull Strategy
PROMOTION PLANNINGSTEPOBJECTIVE SETTING The objectives of promotion may be categorized as stimulating demand and enhancing company image. • The sequential short-term, intermediate, and long-term promotion goals for a firm to pursue. Primary demand is an objective when seeking consumer interest for a product category. Selective demand is a later objective that seeks consumer interest for a particular brand of a product.
PROMOTION PLANNINGSTEPBUDGETING USE OBJECTIVE & TASK • Under the objective-and-task method, a firm sets promotion goals, determines the activities needed to satisfy them, and then establishes the proper budget. Most large companies use some form of objective-and-task technique. • During promotional budgeting, a firm should keep the concept of the marginal return in mind. This is the amount of sales each increment of promotion spending will generate. It is usually highest for • new products.
Step 5. Establish the Budget Affordable % Of Sales Competitive Parity Objective & Task
PROMOTION PLANNINGSTEPPLANNING, MANAGING, BLENDING THE COMMUNICATIONS • THE PROMOTION MIX
PROMOTION PLANNINGSTEPPLANNING, MANAGING, BLENDING THE COMMUNICATIONSSELECTING MEDIA • Media are selected on the basis of these criteria: • Advertising media costs. • Reach • Frequency. • Gross Rating Points • Waste • Message permanence. • Persuasive impact • Clutter • Lead time
PROMOTION PLANNINGSTEPPLANNING, MANAGING, BLENDING THE COMMUNICATIONSSELECTING MEDIA • Advertising media costs • Outlays for media time and space. • Total costs are computed first. • Per-reader or viewer costs are computed second.
PROMOTION PLANNINGSTEPPLANNING, MANAGING, BLENDING THE COMMUNICATIONSSELECTING MEDIA • Reach—the number of viewers, readers, or listeners in an audience. • . For TV and radio, reach is the total number of people who are exposed to an ad. • . For print media, reach has two components: circulation (the number of copies sold or distributed) and passalong rate (the number of times each copy is read by another reader).
PROMOTION PLANNINGSTEPPLANNING, MANAGING, BLENDING THE COMMUNICATIONSSELECTING MEDIA • Waste—the part of an audience not in a firm’s target market. • Narrowcasting, which presents messages to limited and well-defined audiences, can reduce audience waste.
PROMOTION PLANNINGSTEPPLANNING, MANAGING, BLENDING THE COMMUNICATIONSSELECTING MEDIA • Frequency—how often a medium can be used. • Repetition, repetition, repetition • James Smith 1890’s
PROMOTION PLANNINGSTEPPLANNING, MANAGING, BLENDING THE COMMUNICATIONSSELECTING MEDIA • GROSS RATING POINTS (GRP’S) GRP’S = REACH X FREQUENCY
PROMOTION PLANNINGSTEPPLANNING, MANAGING, BLENDING THE COMMUNICATIONSSELECTING MEDIA • Message permanence—the number of exposures one ad generates and how long it remains available to the audience. • Persuasive impact—the ability of a medium to stimulate consumers.
PROMOTION PLANNINGSTEPPLANNING, MANAGING, BLENDING THE COMMUNICATIONSSELECTING MEDIA • Clutter—the number of ads found in a single program, issue, etc. of a medium. • Lead time—the period required by a medium for placing an ad.
PROMOTION PLANNINGSTEPPLANNING, MANAGING, BLENDING THE COMMUNICATIONSSELECTING MEDIA • In recent years, there have been many media innovations, such as online computer services, regional editions, special one-sponsor issues, specialized Yellow Pages, TV ads in supermarkets, infomercials, etc.
PROMOTION PLANNINGSTEPPLANNING, MANAGING, BLENDING THE COMMUNICATIONSSELECTING MEDIA • As of 2004, the typical U.S. consumer will have access to 44 local radio stations, 200 TV channels, 2,400 Internet radio stations, 18,000 magazine titles, and 20 million Internet sites.
PROMOTION PLANNINGSTEPTHE PROMOTION MIX • The promotion mix is a firm’s overall and specific communication program, including its use of advertising, public relations (publicity), personal selling, and/or sales promotion. • With an integrated marketing communications program, each type of promotion has a distinct function and complements the other types.
PROMOTION PLANNINGSTEPTHE PROMOTION MIX • The promotion mix is a firm’s overall and specific communication program, • A promotion mix varies by type of company, the product life cycle, access to media, and channel member support.
PROMOTION PLANNINGSTEPTHE PROMOTION MIX • ADVERTISING • PERSONAL SELLING • SALES PROMOTION • PUBLIC RELATIONS / PUBLICITY • RESELLER SUPPORT PROGRAMS
CONSIDERING COOPERATIVE EFFORTS • With cooperative advertising, two or more firms share some advertising costs. • 1. A vertical cooperative ad is an advertising agreement between firms at different levels of the distribution channel. • 2. A horizontal cooperative ad is an advertising agreement among independent firms at the same stage. • 3. Good agreements clearly state each party’s costs, functions, and responsibilities; the ads covered; and the basis for termination.We will apply SCHNUCKS to both.
PROMOTION PLANNINGSTEPBUDGET • A budget delineates expenditures by explicit tool and medium • Considerations in budgeting may include alternative media costs, the number of placements needed, cost increases of media, the status of the economy, channel member tasks, production costs, and budget allocation for domestic versus international ads.
PROMOTION PLANNINGSTEPEVALUATION MEASURING EFFECTIVENESS • EVALUATING… SUCCESS OR FAILURE • COMMUNICATION (PROMOTIONAL) success or failure depends on how well the company achieves promotion objectives, which may range from creating awareness to expanding sales. Example: R x F= GRP’s
PROMOTION PLANNINGSTEPFOLLOW ON & FUTURE PLANNING • FEEDBACK & ADJUST
Summarize STEPS SITUATIONAL ANALYSISESTABLISHING PROM0TIONAL OBJECTIVES JUSTIFICATONS
Summarize STEPS DETERMINING BUDGET PLANNING, MANAGING, BLENDING THE COMMUNICATIONS
Summarize STEPS EVALUATION MEASURING EFFECTIVENESS FOLLOW ON AND FUTURE PLANNING
Next Steps • OPPORTUNITY IS NOW HERE! • JUST DO IT!!!!!! • LPC1@umsl.edu
Promotional PlanningSession Lindell Phillip Chew University of Missouri- St. Louis, College of Business Administration