SGMA 217 Chapter 15

Promotion Mix

The combination of promotional methods a business uses to reach a target market.

Components of the Promotion Mix

Advertising, personal selling, sales promotion, and public relations.

Advertising

A very important component of the promotion mix, often chosen for its scale, targeting, choice, and accessibility.

Categories of Advertising Media

Seven major categories with distinct differences in reach, targeting, cost, and other factors.

Personal Selling

The most adaptable promotional method, allowing modification of the message to suit individual buyers.

Cost of Personal Selling

It can be the most expensive method of promotion due to individual or small group interactions.

Personal-Selling Process

Typically includes six steps: prospecting, approaching the prospect, making the presentation, answering objections, closing the sale, and following up.

Sales Promotion

Direct incentives for customers to purchase or try a product.

Examples of Sales Promotion Methods

Coupons, samples, premiums, frequent-use incentives, point-of-purchase displays, and contests.

Public Relations (PR)

A broad set of communication activities used to build favorable relationships with the public.

Goals of Public Relations

To gain media publicity through press releases, press conferences, and event sponsorships.

Advantages of PR

Can generate valuable free publicity.

Disadvantages of PR

Companies cannot control the amount or content of media exposure.

Promotional Campaign

A plan for combining the four components of the promotion mix to achieve marketing goals.

Factors Influencing Promotional Campaigns

Company's promotional objectives, nature of the target market, characteristics of the product, and organization's resources.

Distribution

A critical part of marketing strategy, often overlooked.

Types of Distribution Channels

Direct, producer to retailer to customer, producer to wholesaler to retailer to customer, and producer to agent to wholesaler to retailer to customer.

Marketing Intermediaries

Provide efficiency, assortment of goods, break bulk, valuable marketing information, and an instant sales infrastructure.

Wholesalers

Intermediaries that sell products to other businesses.

Importance of Retailers

The final link between producers and customers, critical for distribution strategy.

Retail Distribution Challenge

Finding retail partners that fit the company's products, customers, and brand.

Integrated marketing communications

Coordinating all aspects of the promotion mix to send clear and consistent messages to customers.

Prospecting

A part of the personal-selling process where you research potential buyers and choose the most likely customers or prospects.

Press release

A publicity tool that is generally a one-page document of about 300-500 words that the organization provides to the media to promote its company or a product.

Press conference

A publicity tool where media members are invited by a company to hear news or product announcements.

Retailers

Businesses that specialize in selling products to the end user.

Direct channel

A distribution channel where the producer sells directly to the consumer, with no marketing intermediaries in between (sometimes referred to as customer-direct).

Producer to retailer to customer channel

A distribution channel where the producer sells to a retail store, which then sells to consumers.

Producer to wholesaler to retailer to customer channel

A distribution channel where goods are first sold to wholesalers, and then to retailers.

Producer to agent to wholesaler to retailer to customer channel

A distribution channel similar to the producer to wholesaler to retailer channel, but with the addition of sales agents who help connect buyers and sellers.

Agent

An independent sales professional who brings buyers and sellers together.

Distribution intensity

The level of market coverage for a product, usually measured by the number of outlets where it is available—in intensive distribution all available outlets are used, in selective distribution only select outlets and locations are used, and in exclusive distribution outlets are very limited.

Non-store retailing

Selling that does not take place in conventional store facilities; customers purchase products without visiting a store.

Direct selling

The marketing of products to customers through face-to-face sales presentations at home or in the workplace; related to personal selling.

Direct marketing

The use of the telephone, the internet, and non-personal media to communicate product and organizational information to customers, who can then purchase products via mail, telephone, or the internet.

Inventory

The supply of goods that a company holds for use in production or for sale to customers.

Inventory management

Involves deciding how much of each type of inventory to keep on hand and the ordering, receiving, storing, and tracking of it.

Warehousing

The function of physical distribution that involves receiving and storing goods, then preparing them for shipment.

Transportation

The function of physical distribution that involves the shipment of products through the distribution channel to the customer.