Promotion mix Week-9 Lecture Hour 9/19/2015Dr. Yuvaraj 1.

Promotion mixWeek-9

Lecture Hour

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ConsumerProducer Agent Wholesaler Retailer

Producer

Producer

Producer

Wholesaler Retailer Consumer

Retailer Consumer

Consumereg Insurance

eg A pint of beer (UK)

eg Most supermarket goods

eg Imported goods

A revision-Consumer Channels

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Producer Industrialcustomereg High value, complex products

Producer Industrialdistributoreg Components via Radio Spares

Industrialcustomer

Producer Agent Industrialcustomer

Producer AgentIndustrialdistributor

Industrialcustomer

Industrial Channels

Supply chain management: Production

How many items to produce, materials lead times Transportation

Mode, e.g. road, rail, air etc. Facility

Location of factory, warehouse etc. Inventory

How much stock, materials, work-in-progress etc. Communication

Systems for orders, billing, stock control, payment etc.

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Tangible Products

Which is better?

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Services Distribution

Services are consumed at point of production:

Both provider and consumer are present People are part of the service

Consider: How to make service easily available to target

market How to maintain service quality if intermediaries

are used

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Knowledge Vs Performance

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Communication

Firms communicate both internally and externally

Customers, suppliers, staff, channels, shareholders, other stakeholders e.g:

Obtain approval for policies/activities Encourage favourable attitudes Want them to ‘buy’ e.g. products, services, plans

Need to understand current perceptions and attitudes for effective communication

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Communication Planning

Set objectives Identify target audienceDecide message and methodTimingEvaluation and controlBudget

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AIDA Hierarchy of Effects

Innovation - Adoption

Cognitive (Learn)

Attention

Awareness

Knowledge

Awareness

Affective

(Feel)

Interest

Desire

Liking

Preference

Conviction

Interest

Evaluation Behaviour

(Do)

Action

Purchase

Trial

Adoption

Communication Planning

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Need to be clearly definedDetermine what you say, to whom and how

Some common objectives: Inform eg new product, new price/generate enquiries Alter or correct perceptions/attitudes Increase frequency of use Remind (about existing product) Present special offers Educate on how to use a product Build an image/establish connections Build customer loyalty To provide reassurance

Objectives

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Objectives

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Identify who the intended recipients are Consider their current perceptions, attitudes and knowledge

Different messages and media may be required for different target groups

e.g. Communication about a new product Channels and employees, more product-specific,

technical information; manuals, information sheets Consumers, more benefits-oriented; adverts, point-of-

purchase displays

Target Audience

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Choosing a Message

What to say (content) Rational, emotional, moral appeal

How to say it (structure and format) Order of presentation, conclude or leave open-

ended Words, pictures, people Tone / style, e.g. comedy, irreverent, factual etc.

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Message

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Timing

Communications need to be co-ordinated with the rest of the marketing activity eg

Product availability May wish to co-incide with related events eg

Sportswear during Olympics Turkeys at Christmas

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Setting the Promotion Budget

A variety of methods: Same as last year (plus or minus x%) What is affordable Percentage of sales Parity with competitors Objective and task

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Evaluation & Control

A system must be put in place to assess the success (or not) of a campaign, e.g.

Recall / brand awareness / brand attitude studies

Coupon returns/clicks Sales comparisons Complaints

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Marketing Communications Mix

The marketing communications mix comprises:

AdvertisingSales promotionPublic relations & publicityPersonal sellingDirect marketing

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Includes:TVnewspapersmagazines & periodicals

cinema radiobillboards & posters Internetother media

eg buses, taxis, petrol pumps

Advertising

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TV large audience see product-in-use sound and vision relaxing environment cable, satellite and digital provide scope to segment

expensive consumers may find commercials irritating

PVRs can screen out

Media Choice

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Cinemasimilar advantages to TVsmaller audiencesegmentation possibilities

often more welcome than TV ads (signals start of the programme)

Less regulation than TV

Media Choice

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Newspapers use of illustrations long copy large audience, regular purchasers

segmentation possibilities short life spans

Media Choice

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Magazines can integrate editorial with advertising

segmentation possibilities

long life spans leisure reading high readership compared to circulation

can involve audience ‘desert areas’ eg inside front, back pages

GlossyMags

Inside!That Ali G interviewWhy McDonald’swent bustOn the Paris catwalk

Media Choice

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Commercial radio growing in popularity sound only, but intimacy segmentation possibilities small, often passive audience

Media Choice

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Billboards and Posters high opportunity to see low cost segmentation possible short and long term possibilities

subject to weather environmental criticism vandalism, ‘adbusters’

Media Choice

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Internet growth medium consumers actively seeking information

can be interactive sound, pictures and words

segmentation possibilities

on-line shopping ‘pop-ups’ irritate

Media Choice

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Media SelectionCharacteristics of target audience

Media usage behaviour, exposure

BudgetCreative constraints

Best presentation of the message eg visuals, colour

Timing Seasonality of offering; cost of media at different times

Reach and frequency How wide message needs to be spread, and how often

Media Choice

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Sales Promotion

Generally short term incentives to stimulate sales people to sell, customers to buy/use

Growing in popularity: Quick response Easier targeting Consumers increasing deal-orientation Often easier to evaluate Aims to break down brand loyalty

e.g. Encourage product trial, brand switching Encourage new product trial

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Target Audience

Sales promotions can be aimed at:

Consumers Demand pull, incentive to purchase e.g. money off coupons, gifts, competitions

Channels, intermediaries Supply push, incentive to promote the particular product, increase stocks etc.

e.g. Increase bonuses, price discounts, competitions and gifts, co-operative advertising, point-of-sale materials

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Potential Disadvantages

Frequent offers may ‘cheapen’ the brand image

Encourages consumer promiscuity Consumers wait for the special offer and stockpile

Often used to meet ‘year end’ targets Reduces subsequent sales

Subsidises those who would have purchased anyway

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Internet Transactions

Business

Consumer

Business Consumer

B2B

e.g. auto industry

C2B

e.g. Priceline

B2C

e.g. Amazon

C2C

e.g. eBay

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Publishing One-way provision of information

Interaction, e.g On-line customer service Games, promotions

Transaction On-line purchasing

Integration Automated management of supply chain

Levels of On-Line Marketing

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Product What products, customer service to offer

Price Same, cheaper or higher than off-line Delivery charges

Promotion Internet only or include traditional Marketing communications mix decisions Affiliate marketing

Place In-house or outsource distribution logistics

The On-Line 4Ps

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B2B and B2C Electronic Commerce

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E-Commerce Business Models

Online direct marketing

Electronic tendering system

Name-your-own-price

Find-the-best-price

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E-Commerce Business Models

Affiliate marketing

Note the Sony logo at the top of this Web page www.howstuffworks.com

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E-Commerce Business Models

Viral marketing

Group purchasing

Online auctions

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E-Commerce Business Models

Product customization

Deep discounters

Membership

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E-Commerce Business Models

Bartering

online

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Benefits of E-Commerce

Benefits to organizations Makes national and international markets more

accessible Lowering costs of processing, distributing, and

retrieving information

Benefits to customers Access a vast number of products and services

around the clock (24/7/365)

Benefits to Society Ability to easily and conveniently deliver

information, services and products to people in cities, rural areas and developing countries.

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Limitations of E-Commerce

Technological Limitations Lack of universally accepted security standards Insufficient telecommunications bandwidth Expensive accessibility

Non-technological Limitations Perception that EC is unsecure Unresolved legal issues Lacks a critical mass of sellers and buyers

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consumers are multitasking

Source: PiperJaffray

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And…consumers don’t like ADS

Source: PiperJaffray

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Eight Types of Web sites for Advertising

Portals: most popular; best for reach but not targeting

Search: second largest reach; high advertising value

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Eight types of sites (continued)

Commerce: high reach; not conducive to advertising

Entertainment: large reach; strong targetability

Mall of Hawai’i

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Eight types of sites (continued)

Community: emphasize being a part of something; good for specific advertising

Communications: not good for branding; low targetability

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Eight types of sites (continued)

News/weather/sports: poor targetability

Games: good for very specific types of advertising

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What it is not: Forcing people to buy things they do not want Having ‘the gift of the gab’ Cheating, conning and lying

The interpersonal arm of the promotional mix: Two-way Communicate with end customers, channels, intermediaries

Represent the company to customers Represent customers to the company

Increasing emphasis on the concept of relationship marketing

Personal Selling

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Prospecting Finding / developing new customers

Communicating Communicate company/product information to customers

SellingServicing

e.g. Consult on problems

Customer relationship management e.g. major accounts in business-to-business

Information gathering Gather marketing intelligence; customer needs

The Role of Sales

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The Selling Process

Prospecting and qualifying Pre-approach Approach Presentation and demonstration Overcoming objections Closing Follow-up and maintenance

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Salesforce Management

Structure / deployment e.g. Geographical, product, market

Compensation Usually fixed + variable (OTE) e.g. Revenue, profit, product mix

Recruitment, selection, training Motivating & managing Evaluating performance

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Sales Force

Pros Two-way communication with customer

Build relationships

Speedy feedback

Often essential Flexible focusing/targeting

Cons Expensive Requires managerial infrastructure

Focus on volume / revenue can lead to short term, less profitable, approach

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Questions?

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