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1-1McGraw-Hill/IrwinUnderstanding Business, 8e © 2008 The McGraw-Hill Companies, Inc., All Rights
Reserved.
Nickels McHugh McHughNickels McHugh McHugh
**Using Effective
PromotionalTechniques
16
CH
AP
TE
R*
* *
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Traditional Promotional MixTraditional Promotional Mix
Personal Selling
Sales Promotion
Public Relations
Advertising
Product
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Steps In A Steps In A Promotional CampaignPromotional Campaign
1.1. Identify the target marketIdentify the target market
2.2. Define the objectivesDefine the objectives
3.3. Determine the promotional budgetDetermine the promotional budget
4.4. Develop a unifying messageDevelop a unifying message
5.5. Implement the planImplement the plan
6.6. Evaluate effectivenessEvaluate effectiveness
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Objectives ofObjectives of Integrated MarketingIntegrated Marketing
• Build Brand EquityBuild Brand Equity
• Provide InformationProvide Information
• Manage Demand & Build SalesManage Demand & Build Sales
• Differentiate ProductsDifferentiate Products
• Influence Perceptions, Attitudes, & Influence Perceptions, Attitudes, & Buyer BehaviorBuyer Behavior
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AdvertisingAdvertising
• Advertising media: Newspaper, Advertising media: Newspaper, television, radio, magazines, television, radio, magazines, outdoor, direct mail, yellow-pages, outdoor, direct mail, yellow-pages, InternetInternet
• The growing use of InfomercialsThe growing use of Infomercials
• Moving to the InternetMoving to the Internet
• Global advertisingGlobal advertising
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Century’s Century’s Top Ad JinglesTop Ad Jingles
• ““You deserve a You deserve a break today”break today”
• ““Be all you can be”Be all you can be”
• ““Pepsi-Cola hits the Pepsi-Cola hits the spot”spot”
• ““Mm Mm good!”Mm Mm good!”
• ““See the USA in See the USA in your Chevrolet”your Chevrolet”
• ““I wish I were an Oscar I wish I were an Oscar Mayer wiener”Mayer wiener”
• ““A little dab’ll do yaA little dab’ll do ya””
• ““Double your pleasure, Double your pleasure, double your fun”double your fun”
• ““It’s the real thing”It’s the real thing”
• ““Winston tastes good Winston tastes good like a cigarette should”like a cigarette should”
Source: Source: Advertising Age
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Do Blatantly SexyDo Blatantly Sexy Ads Turn You Off?Ads Turn You Off?
4
5145
4
72
24
01020304050607080
Strongly/SomewhatAgree
Strongly/SomewhatDisagree
Don't Know
Per
cent
Men Women
Source: Source: USA Today
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Total DirectTotal DirectAdvertising ExpendituresAdvertising Expenditures
142.1 153164.1
231.4
263.7 271
0
50
100
150
200
250
300
1996 1997 1998 2002 2004 2005
Source: Source: The Direct Marketing Association, Advertising Age (accessed August 10, 2006)
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Money Spent to Money Spent to Place ProductsPlace Products
$2.0 $2.1$2.5
$3.4
$4.1
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
2001 2002 2003 2004 2005
In BillionsIn Billions
Source: Source: PQ Media
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Total AdvertisingTotal Advertising Expenditures By Media Expenditures By Media
$2,623
$2,652
$5,328
$6,499
$8,912
$9,527
$18,036
$0 $5,000 $10,000 $15,000 $20,000
Syndicated TV
Internet
Spot TV
Local Newspaper
Cable TV network
Magazine
Network TV
Source: Source: Advertising Age, 2005
Expenditures of 100 Leading National Advertisers
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Ad Spending GrowthAd Spending Growth
25.2%
13.7%
13.3%
11.0%
9.8%
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
Local Magazine
Sunday Magazine
Internet
Cable TV Network
Outdoor
Source: Source: Advertising Age, 2005
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Infomercials GrossingInfomercials Grossing Over 1 BillionOver 1 Billion
0 0.5 1 1.5 2 2.5
Proactiv
Bowflex
Total Gym
Soloflex
George Foreman Grill
Ron Popeil'sRotisserie & BBQ In Billions
Source: Source: Business 2.0, June 2005
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U.S. Online U.S. Online Ad SpendingAd Spending
0
1
2
3
4
5
6
7
8
9
1998 1999 2000 2001 2002 2003 2004 2005
Source: Source: Investors.com; Advertising Age, 2005
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Steps in the Steps in the Selling Process (B2C)Selling Process (B2C)
Start
Approach
Ask questions
Make presentation
Close sale
Follow up
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Steps in the SellingSteps in the Selling Process (B2B)Process (B2B)
1.1. Prospect and QualifyProspect and Qualify
2.2. PreapproachPreapproach
3.3. ApproachApproach
4.4. Make PresentationMake Presentation
5.5. Answer ObjectionsAnswer Objections
6.6. Close Sale Close Sale
7.7. Follow UpFollow Up
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Public RelationsPublic Relations
StepsSteps• Listen to the public.Listen to the public.
• Change policies and Change policies and procedures.procedures.
• Inform people that Inform people that you’re being you’re being responsive to their responsive to their needs.needs.
PublicityPublicity• FreeFree
• More Effective Than More Effective Than AdvertisingAdvertising
• BelievableBelievable
• No ControlNo Control
• No RepetitionNo Repetition
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Sales Promotion TechniquesSales Promotion Techniques
B2BB2B• Trade ShowsTrade Shows• PortfoliosPortfolios• DealsDeals• CatalogsCatalogs• ConventionsConventions
B2CB2C• CouponsCoupons• Cents-off PromotionsCents-off Promotions• SamplingSampling• PremiumsPremiums• SweepstakesSweepstakes• ContestsContests• BonusesBonuses• CatalogsCatalogs• DemonstrationsDemonstrations• Special EventsSpecial Events• LotteriesLotteries• In-store DisplaysIn-store Displays
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Tips onTips on Issuing CouponsIssuing Coupons
• Coupons can be used as a “Thank you for Coupons can be used as a “Thank you for buying” or a “Stop and try us.”buying” or a “Stop and try us.”
• The value must be enough to attract customers.The value must be enough to attract customers.
• Use coupon promotions sparingly. Use coupon promotions sparingly.
• Get professional help to get maximum Get professional help to get maximum exposure.exposure.
• Color-code your coupons for different groups Color-code your coupons for different groups that use them.that use them.
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Coupon StatisticsCoupon StatisticsAverage Face ValueAverage Face Value
• 93 cents (2004); 46 cents (1990)93 cents (2004); 46 cents (1990)
Amount saved in 2004Amount saved in 2004• $2.9 billion$2.9 billion
Number of coupons redeemed in America Number of coupons redeemed in America in 2004in 2004• 3 billion3 billion
Coupons rank 2Coupons rank 2ndnd as purchase motivators as purchase motivators (Largest: Free Samples)(Largest: Free Samples)
Source: St. Louis Post-Dispatch Everyday, July 2005
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Sales PromotionSales Promotion
• Internal & ExternalInternal & External
• SamplingSampling
• Word-Of-MouthWord-Of-Mouth
• Viral Marketing/SwagViral Marketing/Swag
• BloggingBlogging
• PodcastingPodcasting
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Putting it all TogetherPutting it all Together
• Convince wholesalers and Convince wholesalers and retailers to stock and sellretailers to stock and sell
• Producer uses advertising, Producer uses advertising, personal selling, sales personal selling, sales promotion to convince the promotion to convince the intermediariesintermediaries
• Idea is to push the product Idea is to push the product through the distribution through the distribution system to the storessystem to the stores
• Heavy advertisements and Heavy advertisements and sales promotion effortssales promotion efforts
• Directed at consumers so Directed at consumers so that they will request the that they will request the products from retailersproducts from retailers
• Products are pulled down Products are pulled down through the distribution through the distribution systemsystem
