Chapter 8 - Promotion Strategy

Chapter 1 The Marketing Concept: The Role of Marketing in Organisations

Chapter 8

Promotion Strategy

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1. What is Promotion?Activities that communicate the merits of the product & persuade one to buy it

Promotion mix, include Advertising; Personal Selling; Sales Promotion; and Public Relations

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1.0 Advertising: Non-personal presentation & promotion of ideas, goodsDissemination of mkg info thru the various media (TV, radio, internet)To increase & maintain effective demand & help the sale of goods & services

Purpose of Advertising Introduce a new product to the market - create awareness Help to increase sales of existing products (reminder advertising)Educate the public on the special feature, characteristic & importance of productsCreate or enhance company goodwill & maintain or increase public acceptance

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1.0 Advertising: Characteristics of Advertising Public Presentation Confers legitimacy of the product

Persuasiveness Scale of advertisement reflects the sellers size & popularity

Amplified expressiveness Opportunity to dramatise the company &its products

Impersonality Less compelling than salesperson (Less persuasive: 1way comm)

Able to build up LT image, wide coverage at low cost per exposure

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2. Personal Selling: Personal presentation by the firms sales force for the purpose of making sales & building customer relationships

Face-to-face with customer, a source of direct mkt feedback on the firms product

Characteristics of Personal Selling Personal Confrontation - Allows immediate adjustment Cultivation - Allow cultivation of long term relationships Response - Potential customer under some obligation to respond Cost - Most expensive contact tool Able to build up buyers preference, conviction & action

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2. Personal Selling: Personal selling is effective when a product: Complex & technical in nature (Eg.computer system) High value (eg. Aircraft, cars..) Requires demonstration (eg. Cosmetics, filter, utensils) Tailor made to the customers requirement (eg. Insurance policy)

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3. Sales Promotion: Short-term incentives to encourage purchase or sales of a product or services

Rapid Growth of Sales Promotion Targeted toward consumer, business & trade promotions Several factors contributed to the rapid growth: Pressures to increase sales; Competition & competing brand; Advertising efficiency declines, due to rising costs &legal restraints; Consumers are more deal-oriented, retailers are more demanding

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3.0 Sales Promotion (cont): Selecting Sales-Promotion Tools Consumer-Promotion Tools Samples A small amount of products for trial

Coupons Certificate that gives buyers a saving when they purchase a product Stimulate sales of a mature brand/promote early trial of new brand

RefundOffer to refund part of the purchase price of a product Send a proof of purchase to the manufacturer, then get a refund

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3.0 Sales Promotion (cont): Price Packs Reduced price that is marked by the producer directly on the label Can be single packages or two related products banded together

Premiums Goods offered either free or at low cost as an incentive to buy Eg. Collect points, free products (in/out-pack)

Patronage rewards Cash or other award for the regular use of a certain product Eg. Airlines, 10 buys 1 free

Contests, Sweeptakes, & games Give consumers chance to win prizes, cash,... Eg. Sweepstakes & game - missing letters...

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3.0 Sales Promotion (cont):Trade-Promotion Tools Persuade one to carry & promote a brand, give shelf space Discount A straight reduction in price on purchase during a stated period of time

Allowance Money paid for an agreement to feature the manufacturers product.

Eg. Free goods, push money, & specialty advertising items..

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4.0 Public Relations:Build good relations with various publics by getting favorable publicity, good image, & handling rumours.

Press Relations Place info in news media to attract attention

Product Publicity Publicising specific products

Public Affairs Build & maintain national or local community relations

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4.0 Public Relations:Lobbying Build relations with govrnmt officials to influence legislation

Investor Relations Keep relations with shareholders in financial community

Tools News; speeches; special events (fireworks show), audiovisualCorporate identity materials E.g. biz card, uniforms, company cars, stationery Public service activities

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