Exam 3

Promotion Mix

the specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships

4 Promotion Tools

• Advertising

• Sales Promotion

• Personal Selling

• Public Relations

Advertising

any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor

ex: digital, broadcast, print, outdoor forms

Sales Promotion

short-term incentives to encourage the purchase or sale of a product or service

ex: online/in-store discounts, coupons, displays, demonstrations

Personal Selling

personal customer interactions by the firm’s sales force to engage customers, generate sales, and build customer relationships

ex: sales presentations, trade shows, incentive programs

Public Relations

activities designed to engage the company’s various publics and build good relations with them

ex: news updates, stories, sponsorships, events, webpages

How Marketing Communications has Changed (3)

• shift from mass marketing to focused marketing

• more informed consumers

• advances in digital technology/communications

Content Marketing

creating, inspiring, and sharing brand messages and conversations with and among consumers across a fluid mix of paid, owned, earned, and shared communication channels/media

4 Types of Media

• paid- channels paid for by the marketer (includes traditional media and online media)

• owned- channels owned and controlled by the company (websites, blogs, events)

• earned- PR media channels not directly paid for or controlled by the marketer (come about through viewer interest)

• shared- media shared by consumers, companies, and other parties (like social media)

Integrated Marketing Communications (IMC)

carefully integrating and coordinating the company’s communications channels to deliver a clear, consistent, and compelling brand/company message (blends all 4 promotional tools)

Advertising Characteristics

• reaches large masses of buyers at a low cost per exposure

• increases brand legitimacy

• impersonal

• costly

Personal Selling Characteristics

• involves personal interaction

• fosters customer relationships

• buyer feels compelled to respond

• requires long-term commitment (inefficient)

Sales Promotion Characteristics

• engage customers and provide incentives

• reward quick response

• effects are short-lived

• may be unprofitable if they don’t attract new customers

Public Relations Characteristics

• more “real” or believable than ads

• seen as “news and events”

• effective when used with other mix elements

Promotion Mix Strategies

• push strategy- using sales force/trade promotion to push a product through channels (producer → retailers/wholesalers → consumers)

• pull strategy- targeting marketing at final consumers to induce them to buy, creating a demand vacuum that “pulls” the product through channels (producer → consumer → retailer → producer)

Developing an Advertising Program (4)

• setting advertising objectives

• setting advertising budget

• developing advertising strategy (message/media decisions)

• evaluating advertising effectiveness

Advertising Objective

• specific communication task to be accomplished with a specific target audience during a specific period of time

• purpose: to inform, persuade, or remind

Informative Advertising

• communicate customer value

• build brand/company image

• tell market about the product (uses, price, design, services, support)

• correct false impressions

Persuasive Advertising

• build brand preference (encourage switches) and community

• change perceptions of product value

• persuade immediate purchase and engagement

Comparative/Attack Advertising

type of persuasive advertising where a company directly or indirectly compares its brand with competitors (can create controversy)

Reminder Advertising

• maintain customer relationships

• remind of future product uses

• remind customers of purchase locations

• keep brand in customer’s mind during off-seasons

Advertising Budget (4 Methods)

dollars and other resources allocated to a product or company advertising

• affordable method

• percentage-of-sales method

• competitive-parity method

• objective-and-task method

Affordable Method

• setting the advertising budget at the level management thinks the company can afford

• usually results in underspending

Percentage-of-Sales Method

• setting the advertising budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price

• wrongly views sales as the cause of promotion and not the result

Competitive-Parity Method

• setting the advertising budget to match competitors’ outlays or the industry average

• this isn’t smart because companies differ greatly

Objective-and-Task Method

• developing an advertising budget by defining specific objectives, determining the tasks needed to achieve them, and estimating the costs of said tasks

• most logical budget-setting method

• difficult to match tasks to objectives

Advertising Strategy

• strategy by which the company accomplishes its advertising objectives

• consists of 2 elements:

  • creating advertising messages

  • selecting advertising media

Merging Advertising and Entertainment

brand integrations/brand entertainment- making the brand an inseparable part of some other form of entertainment/content

• ex: product placement

Native Advertising

advertising or other brand-produced online content that looks like the other natural content surrounding it on a web/social media platform

ex: Facebook or Instagram Stories ads, BuzzFeed sponsored posts

Creative Concept

• the compelling “big idea” that will bring an advertising message strategy to life in a distinctive and memorable way

• guides the choice of appeals in a specific campaign

3 Traits of Advertising Appeals

• meaningful

• believable

• distinctive

Message Execution Styles (9)

• slice of life- shows product in normal settings

• lifestyle- shows how product fits in with a lifestyle

• fantasy- creates fantasy and intrigue around the product

• mood/image- focuses on suggestions and emotion

• musical- engages viewers with music or dance

• personality symbol- creates a character to represent the product

• technical expertise- shows expertise in product development

• scientific evidence- date that a brand is superior to competitors

• testimonial evidence- likable/credible source endorses the product

Consumer-Generated Content

incorporates the voice of the customer into brand messages, generates greater customer engagement, and yields new creative ideas and fresh brand perspectives

Selecting Advertising Media (4 Steps)

• determining reach, frequency, impact, and engagement

• choosing among major media types

• selecting media vehicles

• choosing media timing

Determining Reach, Frequency, Impact, and Engagement

• reach- % of people in the target market exposed to the ad campaign

• frequency- how many times the average person is exposed to the ad

• media impact- qualitative value of message exposure

• engagement- prioritizing engagement/connection over exposure/reach

Major Media Types (7)

• digital- low cost, high exposure

• TV- mass marketing, high cost, fleeting exposure

• newspaper- local coverage, trustworthy, short-life

• mail- no direct competition, flexible, high cost per exposure

• magazines- high selectivity/credibility, long life, high cost

• radio- local acceptance, low cost, low attention

• outdoor- flexible, repeat exposure, low cost/selectivity

Media Multitaskers

people who absorb more than one medium at a time

Selecting Media Vehicles

• planners must balance media costs against media effectiveness

• consider audience quality, engagement, credibility

• ex: American Idol, People magazine, TikTok

Timing

• timing of advertising can be steady or seasonal

• many brands try to respond to current events

• brands require a steady flow of content to consistently engage consumers

Return on Advertising Investment

• net return on advertising investment divided by the costs of the advertising investment

• look at communication effects and sales/profit effects

Advertising Agency

a marketing services firm that assists companies in planning, preparing, implementing, and evaluation all or portions of their advertising programs

Inclusiveness in Advertising

full and accurate representation in advertising across gender, racial, ethnic, nationality, ability, age, religious, sexuality, and socioeconomic groups

PR Functions (6)

• press relations/agency- placing newsworthy information in media

• product/brand publicity- publicizing products and brands

• public affairs- building national or local community relationships

• lobbying- building relationships with legislators/officials to influence regulation

• investor relations- maintaining relationships with shareholders

• development- working with donors or members of nonprofits

PR Tools (6)

• news- can be natural or manufactures

• special events- conferences, speeches, tours, sponsorships

• written materials- reports, brochures, articles, newsletters

• videos- used as communication tool

• corporate identity materials- logos, stationary, signs, cars, uniforms

• public service activities- improve public goodwill

Salesperson

an individual who represents a company to customers by performing one or more of the following activities: prospecting, communicating, selling, servicing, information gathering, and relationship building

2 Roles of Salespeople

• represent the company to customers- communicate information about products/services

• represent customers to the company- learn customer needs and relay them to the firm

Ways to Bring Marketing and Sales Together (3)

• increase communication between them with joint meetings

• create joint objectives/reward systems for sales and marketing teams

• appoint a high-level executive to oversee both marketing and sales

Sales Force Management

analyzing, planning, implementing, and controlling sales force activities

Steps in Sales Force Management (6)

• design sales force strategy/structure

• recruit and select salespeople

• train salespeople

• compensate salespeople

• supervise salespeople

• evaluate salespeople

Territorial Sales Force Structure

a sales force organization that assigns each salesperson to an exclusive geographic territory in which that salesperson sells the company’s full line

• limits travel expenses

• builds local customer relationships

• holds salespeople accountable

Product Sales Force Structure

sales force organization where salespeople specialize in selling only a portion of the company’s products or lines (better for large and complex companies)

Customer Sales Force Structure

sales force organization where salespeople specialize in selling only to certain customers or industries

Complex Sales Force Structure

combining one or more types of structures when the company has many types of customers, products, and locations

Workload Approach

• a company groups accounts into different classes according to size, account status, or other factors

• it then determines the number of salespeople needed to call on each class of accounts the desired number of times

Types of Sales Forces (3)

• outside- travel to call on customers

• inside- conduct business from an office via phone, online interactions, or visits from buyers (more popular and cost effective)

• hybrid- cross between outside and inside reps (virtual and in person)

Team Selling

using teams of people from sales, marketing, engineering, finance, technical support, and even upper management to service large, complex accounts

Recruiting Salespeople

• big difference between an average and a top salesperson

• poor selection results in costly turnover

• turnover disrupts important customer relationships and sales team morale

Qualities of Good Salespeople (4)

• intrinsic motivation

• disciplined work style

• ability to close a sale

• ability to build relationships with customers

Reasons for Training Salespeople

• teaches them about different types of customers and their needs

• teaches them how to sell effectively

• teaches them about the company (objectives, organization, products, strategies of competitors)

Elements of Compensation (4)

• fixed amount (salary)

• variable amount (commission/bonuses)

• expenses

• fringe benefits

*compensation plan must match company goals

Tools for Supervising Salespeople

• call plans- shows which customers and prospects to call on

• time-and-duty analysis

Ways to Boost Sales Force Motivation (3)

• organizational climate- treating salespeople as valued contributors

• sales quotas- states the amount a salesperson should sell and how it should be distributed among company products

• positive incentives- sales meetings, sales contests, recognition/honors, cash awards, trips

Evaluating Salespeople

• sales reports

• call reports

• expense reports

• sales/profit performance data

• return on investment (through customer relationships, satisfaction, and retention)

Social Selling

using digital platforms and sales tools to engage customers, build stronger customer relationships, and augment sales performance (make sales forces more efficient and cost-effective)

Selling Process (7)

• prospecting and qualifying

• pre-approach

• approach

• presentation/demonstration

• handling objections

• closing

• follow-up

Prospecting

identifying qualified potential customers

Preapproach

• salesperson learns as much as possible about a prospective customer before making a sales call

• considers best channel, timing, and strategy

Approach

• salesperson meets the customer for the first time

• considers appearance, opening lines, and follow-up remarks

Presentation and Demonstration

• salesperson tells the “value story” to the buyer

• shows how the company’s offer solves the customer’s problems

• must have engaging and compelling delivery

Handling Objections

salesperson seeks out, clarifies, and overcomes any customer objections to buying

Closing

• salesperson asks the customer for an order

• recognition of closing signals

Follow-Up

salesperson follows up after the sale to ensure customer satisfaction and repeat business

Value Selling

demonstrating and delivering customer value and capturing a return on that value that is fair both for the customer and the company

“Buyer First” Principles (5)

• learn, than define- learn about buyers unique challenges/needs

• share readily- be transparent and empower buyers with insights

• solve, don’t sell- help customers achieve their goals

• deliver value- stay actively engages to ensure customer satisfaction

• earn trust- develop long-term relationships that act in the buyer’s best interest

Sales Promotion

short-term incentives to encourage the purchase or sales of a product/service (why you should buy now)

Sales Promotion Steps (5)

• define promotion objectives

• select the best tools

• design the sales promotion program

• implement the program

• evaluate the results

Types of Promotions (4)

• consumer promotions (for final buyers)

• trade promotions (for retailers/wholesalers)

• business promotions (for business customers)

• sales force promotions (for salespeople)

Frequency Marketing Programs

• give rewards to regular customers to keep them coming back

• ex: frequent flier programs

Consumer Promotions

tools used to boost short-term customer buying and engagement or enhance long-term customer relationships

ex: samples, coupons, refunds/rebates, premiums, sweepstakes

Price Packs

• offer consumers savings off the regular price of the product

• deal is marked directly on package

• ex: “two for the price of one”

Premiums

goods offered for free or at low cost as an incentive to buy a product

ex: toys in Happy Meals

Advertising Specialties

articles imprinted with an advertiser’s name, logo, or message that are given as gifts to consumers

ex: T-shirts, mugs, tumblers, tote bags

Point-of-Purchase (POP) Promotions

displays/demonstrations that take place at the point of sale

Event Marketing

creating a brand-marketing event or serving as a sole participating sponsor of events created by others

ex: festivals, reunions, marathons, concerts

Trade Promotions

sales promotion tools used to persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to consumers

ex: discounts, allowances, free goods, push money

Business Promotions

sales promotion tools used to generate business leads, stimulate purchases, reward business customers, and motivate salespeople

ex: conventions, trade shows

Sales Promotion Decisions

• size of incentive

• conditions for participation

• distribution of program

• length of promotion

Digital Marketing Process (4)

• understanding digital marketing

• preparing for a digital marketing campaign

• employing digital channels in an omni-channel strategy

• addressing public policy issues in digital marketing

Digital Marketing

the use of technology-intensive platforms such as the internet, mobile networks/devices, and social media to engage directly with carefully targeted consumers

Seller Advantages of Digital Marketing (5)

• more flexible/can change at any time

• low-to-no cost

• can be transported, shared, and changed quickly

• easy to personalize/adapt to current events

• greater geographic scope

Consumer Advantages of Digital Marketing (2)

• increased competition/price information lowers prices

• more brand engagement/community

Supplementary vs. Complementary Channels

• supplementary- digital marketing is a supplement to sales channels (ex: a company mainly sells at physical stores but has a website)

• complementary- digital marketing integrates with other channels to create a seamless omni-channel (online and physical presence work hand in hand)

Digital Marketing as a Complete Business Model

• firms that sell purely digital products and deliver value entirely through online platforms

• affiliated with direct to consumer brands

Digital Consumer Personas

• detailed, nuanced, and tangible representations of prototypical consumers to be targeted by the digital marketing campaign

• used to help digital marketers personalize content to consumers and plan products, campaigns, and prices

• each targeted segment has their own “persona”

Consumer Omni-Channel Navigation Behavior

• the consumer’s seamless use of multiple marketing channels, across stages of the consumer buying decision process

• hard to track consumers across different channels

• must customize marketing strategies to each channel

Addressing Consumer Omni-Channel Navigation

• research and understand the key patterns of consumer navigation

• embrace the concept of data fusion (integrating data from many sources) to build a comprehensive picture of user behavior

Digital Experimentation

used to assess everything from changes in pricing to the effectiveness of different product offerings, brand messages, or presentation formats

Online Marketing

marketing via the internet using company websites, online advertising/promotions, email, videos, influencer sites, blogs, etc

Marketing Websites

• websites that engage consumers to move them closer to a direct purchase or other marketing outcome

• must attract visitors, be easy to use, visually appealing, and useful

Brand Community Websites

• websites that present brand-related content that engages consumers and creates a customer community around a brand

• less focused on selling