Marketing Ch. 11

What is promotion?

External communication; marketer is sending a message to those outside of the company instead of employees. Typically involves pursuasive communication like influencing a customer to make a decision.

Public Relations

The practice of managing the spread of information between an individual or an organization and the public.

Sales Promotion

a short-term, external promotion designed to influence immediate purchase.

Direct Marketing

a promotional effort wherein the seller communicates with the potential customer using media such as direct mail or telemarketing with the goal of receiving a direct response from the customer (as opposed to selling in a retail location).

Advertising

external communication that is paid for by the seller and promotes a product to potential customers.

Personal Selling

frontline interaction between a company representative and a potential buyer designed to influence a purchase decision.

Sales Promotions Types

Free samples, Coupons, Price promotions, Frequent user programs, gift premium, and contest

Free samples (sales promotion)

A free sample lets potential customers try a product without financial risk. By removing the barrier of an unknown purchase, samples decrease risk perception and encourage first-time trial — especially useful when introducing a new product or flavor.

Coupons (sales promotion)

Coupons offer a direct price reduction redeemable at point of purchase. They encourage trial of new products and can win back lapsed customers. Research shows that 92% of consumers regularly seek coupons before purchasing, making them one of the most widely-used sales promotion tools.

Price promotion (sales promotion)

A price promotion (or temporary sale) reduces the price for a limited time to stimulate purchases. Because they are time-limited, price promotions create urgency. However, running price promotions constantly erodes the product's reference price in the consumer's mind, making the regular price feel too high.

Frequent user programs (sales promotion)

Frequent-user (or loyalty) programs reward customers for repeat purchases. By tying rewards to accumulated spending or visits, they encourage customers to choose the same brand consistently rather than switching. They also give marketers valuable purchase data about their most loyal customers

Gift Programs (sales promotion)

A gift premium is a free item offered alongside a purchase. It motivates the purchase itself while simultaneously introducing the customer to another product in the brand's lineup. The perceived value of the gift raises the attractiveness of the overall purchase without requiring a price cut on the main product.

Contests (sales promotion)

Contests drive purchase (or another desired action) by offering the chance to win a prize. Because entering often requires a purchase or proof of purchase, they directly link promotional participation to buying behavior. Contests can also motivate secondary behaviors like social sharing or user-generated content.

Benefits of sales promotions

Balances demand against available inventory or capacity

effectiveness is measurable - tracking the effectiveness is very easy

Promotional cost vary with volume

Reduces risk of initial trial

Public relations functions

Promote goodwill and build trust

lobby for the good of the company

promote positive brand image

manage publicity

maintain investor relations

Public relations tools and tactics

creating press kits

drafting and distributing press releases

speaking at an event as a company representative

sponsering events

giving back to the community

creating publications/newsletters

building relationships with the media

communicating with the public during a crisis

providing pr consultation/image management for company leadership

Benefits of public relations

Public relations facilitates messaging through third-party sources such as newspaper articles or television news stories that are viewed as more credible than advertising directly paid for by the company itself.

Stages of personal selling

1. Prospecting - Looking for potential customers, vetting potential customers.

2. Pre-approach - Researching the prospect, determining the best mode of action.

3. Approach - Contacting prospect, gaining his or her attention, setting up a meeting.

4. Presentation - Presenting information and benefits to the prospect, addressing any objections.

5. Close - Obtaining the sale.

6. Follow-up - Ensuring purchase satisfaction.

Benefits of Personal Selling

The ability to completely customize it for each customer and each purchase situation, address objections directly and immediately.

Downside - Potential expose.

Overall personal selling works best for products with a high enough selling price and profit margin to cover the cost of the sales employees.

Benefits of Direct Marketing

Allows a marketer to reach and communicate directly with customers. There is also usually a way for the consumer to respond to the direct marketing, such as an opportunity to communicate back to the company and purchase. Increase efficiency of promotional dollars spent.

Advertising Functions

Inform, Persuade, Remind & Reinforce

Inform

Advertising can let the customer know that the product exists, which is especially useful in the introduction stage of the product life cycle. Advertising can also inform customers about a product’s attributes or benefits. The function of informing helps market a product in the need for recognition, information search, and evaluation of alternatives stages of the buyer behavior process.

Persuade

Advertising can also have a persuasive element. This is especially helpful in the evaluation of alternatives stage of the buyer behavior process where customers are aware of the product but have not made a purchase decision.

Remind & Reinforce

Advertising can serve to simply remind customers that the product exists. This works well when there is high brand awareness of the product among the target market.

Advertising media

Billsboards, magazines, newspapers, radio, television, and internet

Television (national)

• Upside Largest reach; low CPM; high credibility and emotional impact

  Downside High absolute cost to produce and air

  Best for Mass marketing, building nationwide brand awareness

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Radio

UpsideShort production time; listener-based targeting; low cost

DownsideShort lifespan; audio only, no visual component

Best forLocal targeting, time-sensitive promotions

Print

• Upside Local geographic targeting; community trust and support

  Downside Declining readership; relatively expensive CPM

  Best for Local advertising, event announcements

Out of home (outdoor)

Upside Low CPM; repeat exposure from daily commuters

Downside High production cost; limited targeting capability

Best for Mass marketing within a specific geographic area

Internet / Digital

Upside Highly customizable, scalable, and measurable

Downside Short lifespan; not all target markets are active online

Best for Targeting search engine and social media users

Television (Local)

Upside Local targeting; credibility; emotional storytelling

Downside Difficult for complex messages; higher relative CPM than national

Best for Local-area marketing, event promotion

How much has mobile ad spending increased?

Within the digital marketing category, mobile marketing has seen huge growth, and it continues to increase. By 2027, it is projected that mobile ad spending will surpass $650 billion

What ad spending decreased?

Newspaper ad spending.

Reach

The number of people who are exposed to an ad, either by viewing a visual ad or hearing an audio ad.

Impression

One exposure of a person to an ad; it is an ad being emitted or displayed once.

Frequency

The average number of times the members of a defined market were exposed to an ad.

Effective frequency

The minimum number of times that a person needs to be exponsed to an ad for it to make a difference, or for the costomer to take an action and respond to the commercial.

Cost per thousand impressions (CPM)

An industry standard and an easy way to compare the cost of two types of advertising. Calculated as (Advertising cost divided by Impressions generation) x 1,000

Waste Coverage

The term for advertising that reaches people who are not part of the target market and are not potential customers.

the SUCCESs Model

A way to help ideas and messages stand out and stick in peoples minds

Simple - Keep the message simple. Choose one takeaway or one attribute to promote. That's it. Don't overload the consumer with a million reasons why they should purchase. Give them ONE message.

Unexpected - The unexpected stands out. Create an element in the ad that is surprising or even catches people off guard.

Concrete - Put tangible to the intangible to make it concrete. Give examples to bring what you're saying to life. Show things visibly.

Credible - Use claims that are credible. Instead of saying, "We do great work," find a way to show people how you do great work.

• Who are your well-known clients?

• Whom did you help?

• What recognition or certifications have you received?

• What statistics can you use?

Emotional - Attach emotions to what you're describing in the promotional message.

• Inspiration / Passion

• Fear

• Humor

• Happiness

These are some practical ways to add emotions into promotional messages:

• Music: From scary movies to triumphant battle scenes in films, music helps elicit an emotional response; find background music that portrays the emotion you want and integrate it into the ad.

• Images: Use vivid imagery that represents the emotion you want.

• Lighting and Colors: Use lighting to reinforce a mood.

Stories - People remember stories. There is a reason that parables and allegories are so effective: people connect with them. If you want people to remember a message, portray it with a story.

How to set up an advertising campaign: the seven questions to ask

1. Purpose (WHY) - Clarify the specific purpose behind the campaign: to inform, to persuade, or to remind.

2. Goals (WHAT) - Set goals and objectives before the campaign in order to measure whether or not those objectives have been met.

3. Medium & Vehicle (WHERE) - Ask: WHERE should we run the ad?

   • Research and find where the target market group is. Get CPM estimates for that target market group for the different advertising media being considered in order to compare ad costs. In a nutshell, choose the advertised media that the target market consumes.

   • Keep in mind that some advertising media work better for mass marketing and some advertising media are much more targeted. The product type and size of target market are factors to use when choosing advertising media.

   • Where ads are run should align with the brand identity. For example, a luxury car brand might not want to advertise on a reality show geared toward extreme couponing.

4. Content & Format (WHAT) - Decide on a central theme to use across all advertising. The ad content first of all relays the purpose of the ad, which is to inform, persuade, or remind. Keep the purpose of the ad clear and concise. Beyond that, a marketer can use elements of the SUCCESs model to create an ad that stands out from the clutter. When deciding on these elements, a marketer should remember to choose a format that appeals to the target market and that aligns with the brand identity.

5. Timing (WHEN) - Decide what time of year, month, week, and maybe even time of day to run the ad. This answer will depend on the type of product, purpose of ad, and target market.If advertising a seasonal product, the ad campaign will center around the corresponding time. For broadcast media, a marketer should look at when the target market is watching television or listening to the radio. By looking at such behavior patterns, a marketer can customize an ad campaign to target that segment.

6. Length & Frequency (HOW OFTEN) - Decide on the length of the campaign and how many ads to run.For a general-use product or to maintain top of mind awareness, a marketer may want to run continuous advertising. For short ad campaigns, a marketer should look at the amount of advertising it would take to get the target market group to a high enough frequency to make a difference in purchasing.

7. Check & Measure Response - Check to see what goals and objectives have been met. Don't forget to incrementally test and to shift the strategy in response to data and feedback. When a campaign ends, look back through all of the numbers to see how well the target market group responded to the campaign and determine how to improve the ad strategy for the next campaign.

THE AIDA MODEL

theorizes that consumers first become aware of a product and move through the following stages until they take action and purchase.

Attention - This is the Awareness step in the consumption process, and it lines up with AIDA’s first stage, Attention: the consumer becomes aware of a product, sometimes through promotion.

Interest - This step lines up with AIDA’s Interest stage: the consumer wants to learn about the product, its attributes, and its benefits.

Desire - This step lines up with AIDA’s Desire stage: the consumer develops a positive view of a particular brand while weighing the alternatives.

Action - This step lines up with AIDA’s final stage, Action: the consumer wishes to purchase the brand, looks at options, and purchases.

Promotional mix

The combination of tools that marketers use when creating or refining promotions