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16-1
Introduction to Business
Dr. H. Ronald Moser Cumberland
University
Using Effective
Promotions
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
Chapter 16
16-3
PROFILEANDREW MASON
Groupon
• Groupon grew faster than any e-company in history, from $740 million in 2010 to $4 billion in
2011.
• Google offered $6 billion in December 2010, but Mason
rejected the offer.
• Groupon Now offers a variety of discounts via smart phone.
• Promotion Mix -- The combination of promotional tools an organization uses; the
traditional mix includes:
PROMOTION IN AN ORGANIZATION
16-4
PROMOTION AND THE PROMOTION MIX
• Here we are asking
the question:
• What is the best way to
communication with our target
market?
• Integrated Marketing Communication (IMC) -- Combines the promotional tools into one
comprehensive and unified strategy. IMC is used to:
- Create a positive brand image.
- Meet the needs of consumers.
- Meet the strategic marketing and promotional goals of the firm.
INTEGRATED MARKETING COMMUNICATION (IMC)
16-5
PROMOTION ANDTHE PROMOTION MIX
1. Identify a target market.
2. Define objectives.
3. Determine a promotional budget.
4. Develop a unifying message.
5. Implement the plan.
6. Evaluate the plan.
STEPS IN A PROMOTIONAL CAMPAIGN
16-6
PROMOTION ANDTHE PROMOTION MIX
• Advertising -- Paid, non-personal communication through various media by
organizations and individuals who are in some way
indentified in the message.
• Major goals of advertising:
- Inform.
- Persuade.
- Remind.
ADVERTISING IN THE FIRM
16-7
ADVERTISING: INFORMING, PERSUADING AND REMINDING
• Total advertising expenditures exceed $241
billion yearly.
• Consumers benefit because production costs of TV
programs, radio programs, newspapers and magazines are paid for by advertisers.
• Marketers choose ad media that will reach the target
market.
IMPACT OF ADVERTISING
16-8
ADVERTISING: INFORMING, PERSUADING AND REMINDING
ESTIMATED U.S. ADVERTISING SPENDING BY MEDIUM, 2010 (IN BILLIONS OF DOLLARA)
16-9
ADVERTISING: INFORMING, PERSUADING AND REMINDING
Rank MediaProjected 2010
Spending
1 Direct Mail $52.3
2 Broadcast TV 36.8
3 Newspaper 23.4
4 Cable TV 27
5 Radio 15.9
6 Yellow Pages 11.9
7 Consumer Magazine 9.1
8 Internet 25.3
Other 39.7
Total 241.4
Television Advertising
• TV advertising is still one of the dominant media.
• Digital Video Recorders (DVRs) challenge TV advertising because viewers can skip the ads
on TV.
POPULAR ADVERTISING MEDIA
16-10
ADVERTISING: INFORMING, PERSUADING AND REMINDING
• Product Placement -- Advertisers pay to put their
products into TV shows and movies where the
audience will see them.
• Infomercial -- A full length TV program devoted exclusively to promoting goods and services.
• Online ads are attempts to get potential customers to a website to learn about a product.
INFOMERCIALS AND ONLINE ADVERTISING
• Interactive Promotion -- Allows marketers to open a dialogue
between buyers and sellers and let them work together to create
a beneficial exchange.
16-11
ADVERTISING: INFORMING, PERSUADING AND REMINDING
Infomercials and Online Advertising
16-12
ADVERTISING: INFORMING, PERSUADING AND REMINDING
InfomercialsINFOMERCIAL HALL OF FAME
The Biggest Hits Over the Past 40 Years
• Veg-O-Matic
• Ginsu Knives
• The Clapper
• Thigh Master
• George Foreman Grill
• Bowflex
16-13
ADVERTISING: INFORMING, PERSUADING AND REMINDING
Online ExperienceHow to Avoid Losing Customers Over a Bad
Web Site1. Brand messaging is key.
2. Site must be easy to navigate.
3. Make sure calls to action are effective.
4. Users want fast, readable sites.
5. Users with disabilities should be able to navigate.
16-14
ADVERTISING: INFORMING, PERSUADING AND REMINDING
Social Media Complements Other Promotion(Social Media in Business)
• National Trust for Historic Preservation believes that investing in social media helps the Trust reach certain goals, such as building awareness for preservation.
• Kassie Rempel of SimplySoles sends out hand written thank-you notes and increases social media accessibility. Both can help marketers relate to customers on a personal level.
• National Trust for Historic Preservation believes that investing in social media helps the Trust reach certain goals, such as building awareness for preservation.
• Kassie Rempel of SimplySoles sends out hand written thank-you notes and increases social media accessibility. Both can help marketers relate to customers on a personal level.
SOCIAL MEDIA COMPLEMENTS OTHER PROMOTION
(Social Media in Business)
16-15
• Requires marketers to develop a single product and promotional strategy to implement worldwide.
• Problems can arise in global markets with using one advertising campaign
in all countries - especially bad translations.
Global Advertising
16-16
ADVERTISING: INFORMING, PERSUADING AND REMINDING
• Personal Selling -- The face-to-face presentation and promotion of a product, including the
salesperson’s search for new prospects and follow-up service.
PERSONAL SELLING
• Salespeople need to listen to customer needs, help reach a solution and do everything possible to make the transaction as
simple as possible.
16-17
PERSONAL SELLING: PROVIDING PERSONAL ATTENTION
Steps in the Selling Process
16-18
PERSONAL SELLING: PROVIDING PERSONAL ATTENTION
1. Prospect and qualify
2. Pre-approach
3. Approach
4. Make a presentation
5. Answer objections
6. Close the sale
7. Follow up
• Trial Close -- A statement or question that moves the process toward the purchase.
Steps in the Selling Process
• Prospecting -- Researching potential buyers and choosing those most likely to buy.
PROSPECTING AND QUALIFYING IN B2B SELLING
• Qualifying -- Making sure customers have a need for a product, the authority to buy and the willingness to listen
to a sales message.
• Prospect -- A customer who meets the qualifying criteria.
16-19
PERSONAL SELLING: PROVIDING PERSONAL ATTENTION
STEPS IN THE B2C SELLING PROCESS
16-20
PERSONAL SELLING: PROVIDING PERSONAL ATTENTION
• Public Relations (PR) – Evaluates public attitudes, changes policies and procedures in
response to the public, and executes a program of action and information to earn public
understanding and acceptance.
• 3 steps of a good PR program:
USING PUBLIC RELATIONS IN PROMOTION
16-21
PUBLIC RELATIONS: BUILDING RELATIONSHIPS
1. Listen to the public.
2. Change policies and procedures.
3. Inform people you’re responsive to their needs.
Publicity: The Talking Arm of PR
• Publicity -- Any information about an individual, product or organization that’s distributed to the public through the media and is not paid for or
controlled by the seller.
• Advantages of Publicity:
• Free.
• Reaches people who would not look at an advertisement.
• More believable than advertising.
PUBLICITY
16-22
PUBLIC RELATIONS: BUILDING RELATIONSHIPS
Publicity: The Talking Arm of PR
• No control over whether the media will use a story or when they may release it.
• It can be good or bad.
• Once a story has been run, it isn’t likely to run again.
DISADVANTAGES OF PUBLICITY
16-23
PUBLIC RELATIONS: BUILDING RELATIONSHIPS
• Sales Promotion -- The promotional tool that stimulates consumer purchasing and dealer
interest by means of short-term activities. Sales promotion can take place both internally (within
the company) and externally (outside the company).
SALES PROMOTIONS
• Categories of Sales Promotions:
1. B2B Sales Promotions. Maybe a trade show.
2. Consumer Sales Promotions. Maybe
and in-store display.16-24
SALES PROMOTION: GIVING BUYERS INCENTIVES
• Coupons.
• Demonstrations.
• Sampling.
• Sweepstakes.
• In-store Displays.
• Contests.
• Don’t forget those free cokes at Whitts Scott.
SOME KEY CONSUMER PROMOTIONS
16-25
SALES PROMOTION: GIVING BUYERS INCENTIVES
• Word-of-Mouth Promotion -- People tell others about products they have purchased.
• Word-of-Mouth is important for products like:
- Restaurants.
- Daycare and Eldercare.
- Car Repair Shops.
- Hair Stylists.
- Hotels.
USING WORD-of-MOUTH PROMOTION
16-26
WORD OF MOUTH AND OTHER PROMOTIONAL TOOLS
Viral Marketing
• Viral Marketing -- Paying customers to say good things on the Internet or setting up multiple
selling schemes whereby consumers get commissions.
• People who promote through viral marketing often receive SWAG which can include free
tickets, shirts, and other merchandise.
EMERGING PROMOTIONAL TOOLS
16-27
WORD OF MOUTH AND OTHER PROMOTIONAL TOOLS
• Blog -- Short for web log; an online diary that looks like a webpage but is easier to create and update by posting text, photos, videos,
or links.
Blogs, Podcasting, and E-Mail Promotions
16-28
WORD OF MOUTH AND OTHER PROMOTIONAL TOOLS
• Podcasting -- A way to distribute audio and video programs via the
Internet.
• Email promotion increase brand awareness among commercial
suppliers.
16-29
WORD OF MOUTH AND OTHER PROMOTIONAL TOOLS
Mobile Media
• Marketers make use of cell phones to text customers about
product offers and other company information.
• We’ve seen that companies can now determine where you are and send you messages about
restaurants and other service in your vicinity.
• Push Strategy -- Producers use advertising, personal selling, sales promotion, and other tools
to get their products stocked on shelves.
16-30
MANAGING THE PROMOTION MIX: PUTTING IT ALL TOGETHER
• Pull Strategy -- Directs heavy advertising and sales promotions efforts towards consumers and
gets the public to request their products from retailers. Companies that make use of a pull
strategy target their promotional efforts towards consumers.
• Pick Strategy -- Refers to consumers who pick out their products from online
outlets.
3-31
The End!