Marketing - Promotions

Promotions

  • One of the 4 P's of marketing.

  • Focuses on communicating with customers.

  • Emphasizes understanding the target market's communication needs rather than focusing on technology or social media.

Elements of the Promotions Mix

  • Nine options available for communicating with the target market:

    • Advertising

    • Sales promotion

    • Personal selling

    • Publicity

    • Public relations

    • Product placement

    • Event sponsorship

    • Direct marketing

    • Social media

  • The selection of these elements and their emphasis is crucial.

Integrated Marketing Communications Program

  • After selecting elements from the promotions mix for use in the marketing plan, they are referred to as the Integrated Marketing Communications program.

  • The goal of promotions is not always just to generate revenue; it can also be used for:

    • Positioning

    • Institutional advertising

    • Reinforcement advertising

    • Pioneering advertising

Communication Models

  • Several communication models exist with the most important step being feedback.

  • Feedback is essential to know if the message was delivered, who received it, and how it was perceived.

  • Acknowledges that different people perceive the same message differently.

Objectives of an Integrated Marketing Communications Program

  • Consistency: Ensure all elements deliver the same message.

  • Coordination: Time the delivery of communications correctly, following a sequence.

    • Example sequence:

      • Publicity first (more believable).

      • Advertising to support publicity.

      • Personal selling.

      • Sales promotions to reinforce sales.

  • Comprehensive Communication: Use all necessary elements to communicate effectively with the target market.

Product Placement

  • Involves getting the company name or product name seen on television shows or in movies.

  • Examples:

    • Cereal boxes visible in Jerry's apartment in Seinfeld reruns.

    • James Bond movies showcasing specific car models.

  • Psychological impact on consumers, especially younger people, when they see celebrities using certain products.

Event Marketing/Event Sponsorship

  • Involves sponsoring an event and associating the company's name and product with it.

  • Example: Being an official sponsor of the U.S. Olympic team.

  • Sponsorship should align with the target market's interests.

Direct Marketing

  • Using technology to reach specific customers directly.

  • Options:

    • Direct Mail:

      • Has seen a resurgence due to better targeting and personalization.

      • Can be used to introduce a company and follow up with a phone call.

    • Telemarketing:

      • Outbound: Company calls the customer.

        • Less effective for consumer markets due to "do not call" lists.

        • Still effective for business/industrial customers, often used to set appointments.

      • Inbound: Customer calls the company (Gold standard).

        • Customers have pre-qualified themselves.

        • Includes customers visiting a website to look at products or buy something.

Advertising

  • Defined as any paid-for, controlled form of non-personal communication with an identifiable sponsor.

  • Key aspects:

    • Paid for: No such thing as "free advertising."

    • Controlled: The company controls the content and delivery of the ad.

    • Non-personal: Message delivered through technology without personal interaction.

    • Identifiable sponsor: The company is clearly identified in the ad.

  • Feedback in advertising is not immediate and requires marketing research.

Categories of Advertisements

  • Product Specific: Focuses on a specific product or service offered by a company.

  • Institutional: Focuses on the company itself without mentioning any specific products.

  • National: Seen anywhere in the country.

  • Local: Geographically isolated to a specific territory.

    • Can use zip code additions in national publications to create local ads.

Goals/Objectives of Advertising

  • Generating sales.

  • Introducing a new product.

  • Educating customers.

  • Positioning.

  • Institutional advertising.

  • Publicity/public relations.

  • Demonstrating involvement with events and sponsorships.

Advertising Campaigns

  • Different but related ads with the same or similar theme.

  • Can run for a specific period or continue for years.

  • Utilize various media (print, transit, television, radio, social media).

Cost of Advertising

  • Components:

    • Research.

    • Development.

    • Testing.

    • Delivery (air time, space in publication).

    • Cost of a mistake.

  • While the total cost can be high, the cost per unit contact with a customer may not be as expensive compared to personal selling.

  • Example:

    • A million-dollar ad seen by a million customers equates to a $1 cost per contact.

  • Personal Selling:

    • The American Sales Sales Management Association has some studies that say the contact for a sales contact with a salesperson could run anywhere between 400 - $800 to send a sales rep out to see a customer.

Sales Promotions

  • Any short-term activity other than advertising and personal selling that motivates a customer to purchase or repurchase a product.

  • Examples:

    • Coupons.

    • Sweepstakes and contests.

    • Sampling.

  • Targeted at:

    • End-user customers (consumer and industrial).

    • The company's own sales force to incentivize them to sell specific products.

      • Example: Increase commission rates temporarily for specific products.

    • The trade (distribution channels) with manufacturers offering promotions to wholesalers and wholesalers offering promotions to retailers.

National vs. Local Advertising (Revisited)

  • National advertising tells the customer what to buy.

  • Local advertising tells the customer what to buy and where to buy it.

  • Example:

    • National ad: "Buy General Electric washing machines."

    • Local ad: "Buy General Electric washing machines at Bob It'll supply and store on Nichols Road in Stony Brook."

Captain Crunch Reintroduction

  • Example of a large promotion involving a contest with maps inside cereal boxes to win bicycles.

Personal Selling

  • Different types:

    • Over the counter: Retail selling in a store.

    • Field sales: Sales representative visits the customer's location.

      • Popular in industrial marketing and for large consumer sales.

    • Telemarketing.

      • Contract sales/Manufacturers' reps: Independent salespeople who represent companies and earn commission only when they make a sale.

Manufacturers' Reps

  • Typically represent over 30% of all industrial selling in the United States.

  • Highly skilled salespeople.

  • Carry products from multiple non-competing companies.

  • Get paid a higher commission rate but receive no benefits or salary.

  • Beneficial for companies to introduce new products without incurring significant costs if the product doesn't sell.

Marketing vs. Sales

  • Marketing is more important because it's responsible for the profitability of the entire product line.

  • Sales is only responsible for sales expenses and activities.

  • Marketing develops the products, market segmentation etc.

Publicity

  • The lecture cuts off before finishing discussing Publicity