13-1 Chapter 13 Themes for Class Discussion Integrated Promotion Decisions Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

13-1

Chapter 13 Themes Chapter 13 Themes

for Class Discussionfor Class Discussion

Integrated Promotion Integrated Promotion DecisionsDecisions

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

13-2

The best product at The best product at the right price in the the right price in the

right channel may not right channel may not sell if customers don’t sell if customers don’t

know it exists. know it exists.

What are the tools to What are the tools to develop this final develop this final element of the element of the marketing mix?marketing mix?

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Exhibit 13.2Exhibit 13.2

Decision Sequence for Developing Decision Sequence for Developing Promotion MixPromotion Mix

Define the audience to be targetedDefine the audience to be targeted(1)(1)

Set the promotional objectivesSet the promotional objectives(2)(2)

Set the promotion budgetSet the promotion budget(3)(3)

Design the promotional mixDesign the promotional mix(4)(4)

Evaluate the resultsEvaluate the results(5)(5)

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How do we decide How do we decide whom is to be whom is to be

targeted?targeted?

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What do useful What do useful objectives objectives

of any kind look like? of any kind look like? Promotional Promotional objectives? objectives?

What should they What should they specify?specify?

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What are the merits What are the merits and drawbacks of and drawbacks of

various approaches for various approaches for budget setting?budget setting?

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Which elements of the Which elements of the promotion mix are promotion mix are

primary? When? Which primary? When? Which often play supporting often play supporting

roles?roles?

13-8Exhibit 13.3Exhibit 13.3

Strategic Circumstances and the Relative Importance Strategic Circumstances and the Relative Importance of Personal Selling as a Promotional Toolof Personal Selling as a Promotional Tool

Source: Adapted from David W. Cravens, Strategic Marketing (Burr Ridge, IL: Richard D. Irwin, 1987), p. 508.

Advertisingrelatively important

Personal Sellingrelatively important

Small

High

large

Much

High

Push

Negotiated

Few

Large

Low

Small

Little

Low

Pull

Preset

Many

Number of customers

Buyers’ information needs

Size and importance of purchase

Postpurchase service required

Product complexity

Distribution strategy

Pricing policy

Resources available for promotion

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How should one How should one decide which elements decide which elements of the promotion mix of the promotion mix

should be used?should be used?

13-10Exhibit 13.4Exhibit 13.4

Comparing the Merits of the Promotion Mix Elements (Part 1)Comparing the Merits of the Promotion Mix Elements (Part 1)

Promotion mixPromotion mix ElementElement

Amount of Amount of Information to be Information to be CommunicatedCommunicated

CredibilityCredibility Control Control over the over the MessageMessage

Cost to Cost to reach one reach one customercustomer

Strategic Strategic suitabilitysuitability

AdvertisingAdvertising Varies: littleVaries: little

information in a radio information in a radio or a TV ad, to lots on or a TV ad, to lots on a websitea website

LowLow GoodGood LowLow Well-suited to Well-suited to a a Pull Pull StrategyStrategy

Personal SellingPersonal Selling Lots of informationLots of information Depends on Depends on the credibility the credibility of the company of the company and the and the personality and personality and sales skills of sales skills of the the salespersonsalesperson

Poor, but Poor, but training training helpshelps

Very high in Very high in developed developed countries, countries, can be low can be low elsewhereelsewhere

Well-suited to Well-suited to a a Push Push StrategyStrategy

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Exhibit 13.4Exhibit 13.4

Comparing the Merits of the Promotion Mix Elements (Part 2)Comparing the Merits of the Promotion Mix Elements (Part 2)

Promotion Promotion mixmix Element Element

Amount of Amount of Information to Information to be be CommunicatedCommunicated

CredibilityCredibility Control Control over the over the MessageMessage

Cost to Cost to reach one reach one customercustomer

Strategic Strategic suitabilitysuitability

Sales Sales PromotionPromotion

Virtually no Virtually no informationinformation

Not Not ApplicableApplicable

GoodGood Low and Low and Self-Self-liquidating: liquidating: generally generally pays for pays for itself as the itself as the product is product is purchasedpurchased

Consumer Consumer promotion promotion supports a supports a pull pull strategystrategy. Trade . Trade supports a supports a push push strategystrategy

Public Public RelationsRelations

Lots of Lots of informationinformation

HighHigh PoorPoor Very low or Very low or nilnil

Supports both Supports both pull pull and and push push strategiesstrategies

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So, if advertising is planned, So, if advertising is planned, what decisions must be what decisions must be made? made?

• Set advertising objectives (SMART)Set advertising objectives (SMART)

• Choose media Choose media

• Develop creative strategy and Develop creative strategy and messages messages

• Measure effectiveness: pre or postMeasure effectiveness: pre or post

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Media ChoicesMedia Choices

MediumMedium ClutterClutterInfoInfoContentContent

AbilityAbilityto Targetto Target

Ad Ad LifespanLifespan

ProductionProductionCostCost CPMCPM

NewspaperNewspaper

MagazineMagazine

TVTV

RadioRadio

OutdoorOutdoor

Direct MailDirect Mail

Banner AdsBanner Ads

E-mailE-mail

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What’s involved in planning What’s involved in planning the personal selling portion the personal selling portion of a marketing plan?of a marketing plan?

• Clarify sales task: objectives, Clarify sales task: objectives, activities, and length of sales cycleactivities, and length of sales cycle

• Design sales force architecture, Design sales force architecture, account management policies, and account management policies, and systemssystems

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What’s a sales cycle? What’s a sales cycle? Why does it matter in Why does it matter in

an early stage an early stage company?company?

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Three Strategic Questions in Three Strategic Questions in Sales Force DesignSales Force Design

• Build a sales force or hire outside Build a sales force or hire outside agents?agents?

• How to organize:How to organize:– Geographically?Geographically?– By product or product line?By product or product line?– By customer type?By customer type?– By selling function?By selling function?

• How to use technology to enhance sales How to use technology to enhance sales and customer service performance?and customer service performance?

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Q1: Should we use Q1: Should we use our own sales force our own sales force

or use outside or use outside agents? When and agents? When and

why?why?

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Q2: In designing the sales Q2: In designing the sales force architecture, should force architecture, should

it be organized it be organized geographically, around geographically, around

products, around products, around customers, or around customers, or around

selling functions? selling functions?

When and why?When and why?

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Q3: What Q3: What technology technology

applications can applications can enhance personal enhance personal

selling? selling?

What are their What are their merits? merits?

What are the risks?What are the risks?

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The People Side of Sales The People Side of Sales Management: Some AdviceManagement: Some Advice

• Incentives and rewards (financial and Incentives and rewards (financial and otherwise) matter greatly in personal otherwise) matter greatly in personal sellingselling

• Selecting and training the right Selecting and training the right people makes a world of difference. In people makes a world of difference. In many companies, the top-producing many companies, the top-producing sales people are paid more than some sales people are paid more than some top managers -- and they’re worth it!top managers -- and they’re worth it!

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The People Side of Sales The People Side of Sales Management: Some AdviceManagement: Some Advice

• ““What gets measured gets What gets measured gets done.” Good sales management done.” Good sales management systems measure sales, costs systems measure sales, costs and margins, and behaviorand margins, and behavior

• In start-ups, the top In start-ups, the top management team management team often is and often is and should beshould be the primary sales force the primary sales force

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What about sales promotion? What about sales promotion? Two key questionsTwo key questions

• Specify objectives (SMART)Specify objectives (SMART)– Most consumer and trade promotion Most consumer and trade promotion

is directly measurableis directly measurable

• Consumer or trade promotion, or Consumer or trade promotion, or both?both?

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What about public What about public relations? What does it relations? What does it

take to get free take to get free publicity? What is it publicity? What is it

most useful for?most useful for?