advertising, sales promotion, public relations, personal selling, and direct marketing

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CHAPTER 10 ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

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ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETINGCHAPTER 10THE EFFECTS OF ADVERTISINGDiscuss the effects of advertising on market share and consumersTHE EFFECTS OF ADVERTISINGU.S. advertising was almost $300 billion in 2006 In 2005, 32 companies spent over $1 billion each The advertising industry is small—only 155,000 employed by the 12,000 advertising agencies Ad budgets of some firms are almost $4 billion annuallyTHE EFFECTS OF ADVERTISINGTop

TRANSCRIPT

Page 1: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

CHAPTER 10

ADVERTISING, SALES PROMOTION,

PUBLIC RELATIONS, PERSONAL SELLING,

AND DIRECT MARKETING

Page 2: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Discuss the effects of advertising on

market share and consumers

THE EFFECTS OF ADVERTISING

Page 3: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

THE EFFECTS OF ADVERTISING

U.S. advertising was almost $300 billion in 2006

In 2005, 32 companies spent over $1 billion each

The advertising industry is small—only 155,000 employed by the 12,000 advertising agencies

Ad budgets of some firms are almost $4 billion annually

Page 4: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

THE EFFECTS OF ADVERTISING

Top Ten Leaders by U.S.Advertising SpendingTop Ten Leaders by U.S.Advertising Spending

Page 5: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

ADVERTISING AND MARKET SHARE

New brands with a small market share spend proportionally more for advertising and sales

promotion than those with a large market share

1. Beyond a certain level of spending, diminishing returns set in.

2. New brands require higher spending to reach a minimum level of exposure needed to affect purchase

habits.

Page 6: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

THE EFFECTS OF ADVERTISING ON CONSUMERS

The average U.S. citizen is exposed to hundreds of ads each day.

Advertising may change a consumer’s negative attitude toward a product, or

reinforce a positive attitude.

Advertising can affect consumer ranking of a brand’s attributes.

Page 7: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

EFFECT OF ADVERTISING

Reinforce positive attitudes about brand.Reinforce positive attitudes about brand.

Transform Negative attitude toward a product into a positive one.Transform Negative attitude toward a product into a positive one.

Measure impact on purchase of products.Measure impact on purchase of products.

Maintain brand awareness & Increase market share.Maintain brand awareness & Increase market share.

Page 8: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

EFFECT OF ADVERTISING

Building Goodwill.Building Goodwill.

Introducing New Products.Introducing New Products.

Pre-selling a Product.Pre-selling a Product.

Increase consumers rank on brand attitude.

Page 9: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

REVIEW LEARNING OUTCOMEEFFECTS OF ADVERTISING

Page 10: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Identify the major types of advertising

MAJOR TYPES OF ADVERTISING

Page 11: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

MAJOR TYPES OF ADVERTISING

InstitutionalAdvertising

InstitutionalAdvertising

Enhances a company’s image rather than promotes a

particular product.

Enhances a company’s image rather than promotes a

particular product.

ProductAdvertising

ProductAdvertising

Advertize the benefits of a specific good or service.

Advertize the benefits of a specific good or service.

Page 12: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

MAJOR TYPES OF ADVERTISING

Corporate identityCorporate identity

PioneeringPioneering

CompetitiveCompetitive

ComparativeComparative

ProductAdvertising

ProductAdvertising

InstitutionalAdvertising

InstitutionalAdvertising

Advocacy advertisingAdvocacy

advertising

Page 13: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

PRODUCT ADVERTISING

PioneeringPioneeringPioneeringPioneering Stimulates primary demand for

new product or category Used in the PLC introductory

stage

CompetitiveCompetitiveCompetitiveCompetitive Influences demand for brand in

the growth phase of the PLC Often uses emotional appeal

ComparativeComparativeComparativeComparative

Compares two or more competing brands’ product attributes

Used if growth is sluggish, or if competition is strong

Page 14: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

REVIEW LEARNING OUTCOMETHE MAJOR TYPES OF ADVERTISING

Page 15: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Discuss the creative decisions in developing an

advertising campaign

CREATIVE DECISIONS IN ADVERTISING

Page 16: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

CREATIVE DECISIONS IN ADVERTISING

AdvertisingCampaign

AdvertisingCampaign

A series of related advertisements focusing

on a common theme, slogan, and set of

advertising appeals.

Page 17: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

CREATIVE DECISIONS IN ADVERTISING

Determine the advertising objectives

Make creative decisions Make media decisions

Evaluate the campaign

Page 18: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Define target audienceDefine target audience

Define desired percentage changeDefine desired percentage change

Define the time frame for change Define the time frame for change

SETTING OBJECTIVES: THE DAGMAR APPROACH

Page 19: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

CREATIVE DECISIONS

Develop and evaluateadvertising appeals

Develop and evaluateadvertising appeals

Execute the message

Execute the message

Evaluate thecampaign’s effectiveness

Evaluate thecampaign’s effectiveness

Identify product benefits

Identify product benefits

Page 20: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

“Sell the Sizzle, not the Steak”

Sell product’s benefits, not its attributes

A benefit should answer “What’s in it for me?”

Ask “So?” to determine if it is a benefit

IDENTIFY PRODUCT BENEFITS

Page 21: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

IDENTIFY PRODUCT BENEFITS

Attribute

Benefit

“Powerade’s new line has been reformulated to combine the scientific benefits of sports

drinks with B vitamins and to speed up

energy metabolism.”

“So, you’ll satisfy your thirst with a great-tasting drink that will power you throughout the

day.”

Page 22: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

ADVERTISING APPEALS

Profit

Health

Love or romance

Fear

Admiration

Convenience

Fun and pleasure

Vanity and egotism

Environmental Consciousness

Product saves, makes, or protects money

Appeals to body-conscious or health seekers

Used in selling cosmetics and perfumes

Social embarrassment, old age, losing health

Reason for use of celebrity spokespeople

Used for fast foods and microwave foods

Key to advertising vacations, beer, parks

Used for expensive or conspicuous items

Centers around environmental protection

Page 23: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Unique SellingProposition

Unique SellingProposition

A desirable, exclusive, and believable

advertising appeal selected as the theme

for a campaign.

UNIQUE SELLING PROPOSITION

Page 24: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

EXECUTING THE MESSAGE

Page 25: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

REVIEW LEARNING OUTCOMECREATIVE DECISIONS FOR AD CAMPAIGN

Setadvertisingobjectives

Identify benefits

Develop appeal

Evaluate campaign

results

Evaluatingresults helpsmarketersadjust objectivesfor futurecampaigns

Execute message

Page 26: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Describe media evaluation and

selection techniques

MEDIA DECISIONS IN ADVERTISING

Page 27: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

MEDIA DECISIONS IN ADVERTISING

NewspapersNewspapers

MagazinesMagazines

Yellow PagesYellow Pages

InternetInternet

RadioRadio

TelevisionTelevision

Outdoor MediaOutdoor Media

Direct MailDirect Mail

Trade ExhibitsTrade Exhibits

Cooperative AdvertisingCooperative Advertising

BrochuresBrochures

CouponsCoupons

CatalogsCatalogs

Special EventsSpecial Events

Monitored MediaMonitored Media Unmonitored MediaUnmonitored Media

Page 28: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

MAJOR ADVERTISING MEDIA

NewspapersNewspapers

MagazinesMagazines

RadioRadio

TelevisionTelevision

Outdoor MediaOutdoor Media

Yellow PagesYellow Pages

InternetInternet

Page 29: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

NEWSPAPERS

AdvantagesAdvantages

Geographic selectivity Short-term advertiser

commitments News value and

nearness High individual

market coverage Co-op and local tie-in

availability Short guide time

DisadvantagesDisadvantages

Limited demographic selectivity

Limited color May be expensive

Page 30: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

FREE NEWSPAPERS?

SOURCE: Joseph T. Hallinan, “Do New Free Dailies Mean Sun is Setting for Paid

Newspapers?,” Wall Street Journal, April 5, 2006, B1.

The new Baltimore Examiner is delivering 250,000 newspapers—at no charge and unsolicited!

Advertising brings in the revenue for this niche publication targeting households with income of $73,000 or more.

The ads are $2,900 for a full page, compared with $17,000 for its competition, the Baltimore Sun.

The Examiner is betting that low ad rates and the target market will be a valuable proposition to advertisers.

Page 31: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

CooperativeAdvertising

CooperativeAdvertising

COOPERATIVE ADVERTISING

An arrangement in which the manufacturer and the

retailer split the costs of advertising the

manufacturer’s brand.

Page 32: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

MAGAZINES

AdvantagesAdvantages DisadvantagesDisadvantages

Good reproduction

Demographic selectivity

Regional/local selectivity

Long advertising life

High pass-along rate

Long-term advertiser commitments

Slow audience build-up

Limited demonstration capabilities

Lack of urgency

Long lead time

Page 33: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

RADIO

AdvantagesAdvantages DisadvantagesDisadvantages

Low cost

Immediacy of message

Short notice scheduling

No seasonal audience change

Highly portable

Short-term advertiser commitments

Entertainment carryover

No visual treatment

Short advertising life

High frequency to generate comprehension and retention

Background distractions

Commercial clutter

Page 34: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

TELEVISION

AdvantagesAdvantages DisadvantagesDisadvantages Wide, diverse audience

Low cost per thousand

Creative opportunities for demonstration

Immediacy of messages

Entertainment carryover

Demographic selectivity with cable

Short life of message Consumer skepticism High campaign cost Little demographic

selectivity with stations

Long-term advertiser commitments

Long lead times for production

Commercial clutter

Page 35: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

35

TV ADVERTISING: IS LESS MORE?

The number of ads in TV shows is a longstanding complaint of viewers and advertisers.

The media is cluttered and consumers change channels or speed through commercials on a DVR.

Tests are being conducted to feature shorter commercial pods.

SOURCE: Suzanne Vranica, “TV-Ad Test to Show if Less is More,” Wall Street Journal, April 5,2006, B3.

Year

Commercial Minutesper Hour

13.5 14 14.5 15 15.5

2000

01

02

03

04

05

Page 36: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

OUTDOOR MEDIA

AdvantagesAdvantages DisadvantagesDisadvantages

Repetition

Moderate cost

Flexibility

Geographic selectivity

Short message

Lack of demographic selectivity

High “noise” level

Page 37: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

INTERNET

AdvantagesAdvantages DisadvantagesDisadvantages

Fast growing

Ability to reach narrow target audience

Short lead time

Moderate cost

Difficult to measure ad effectiveness and ROI

Ad exposure relies on “click through” from banner ads

Not all consumers have access to Internet

Page 38: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

ALTERNATIVE MEDIA

Ads in MoviesAds in Movies

Interactive KiosksInteractive Kiosks

Computer Screen Savers

Computer Screen Savers

Shopping CartsShopping Carts

DVDsDVDs

AdvertainmentsAdvertainments

Cell Phone AdsCell Phone Ads

Subway Tunnel AdsSubway Tunnel Ads

Floor AdsFloor Ads

Video Game AdsVideo Game Ads

Page 39: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

VIDEOGAME ADVERTISING

SOURCE: Robert A. Guth and Nick Wingfield, “Microsoft’s ‘Massive’ Move into Game Ads,”

Wall Street Journal, April 26,2006, B1.

Microsoft plans to acquire Massive inc., a start-up that places ads in video games.

Ads are inserted into the game environment.

Video games could become a large new medium for advertising.

Page 40: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

DIRECTORY ASSISTANCE ADVERTISING

SOURCE: Rebecca Buckman, “Your Listing, and a Word From Our Sponsor,”

Wall Street Journal, April 20,2006, B1.

Companies are offering free telephone directory assistance—but there’s an advertisement first.

The audio ads are narrowly targeted, and are 10 to 12 seconds.

The growth of such free services could represent another change in the telecom industry.

Dial 1-800-FREE411 or 1-800-411-METRO

Page 41: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

QUALITATIVE FACTORS IN MEDIA SELECTION

Attention to the commercial and the program

Program liking

Lack of distractions

Other audience behaviors

Page 42: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

MEDIA SCHEDULING

ContinuousMedia Schedule

Flighted Media Schedule

PulsingMedia Schedule

SeasonalMedia Schedule

Advertising is run steadily throughout the period.

Advertising is run heavily every other month or every two

weeks.

Advertising combines continuous scheduling with

flighting.

Advertising is run only when the product is likely to be used.

Page 43: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

MEDIA SCHEDULING ON THE WEB

Competition for Web advertising spots is driving up prices.

Some Web advertisers now run campaigns based on time of day. Examples:

McDonald’s: breakfast meals during morning hours Xerox: copier ads during the workday

Budweiser: beer ads on Friday afternoons

Scheduling Web ads during prime times is a more efficient use of ad dollars and more targeted.

SOURCE: David Kesmodel, “More Marketers Place Web Ads by Time of Day,” Wall Street Journal, June 23, 2006,

B1.

Page 44: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

REVIEW LEARNING OUTCOMEMEDIA EVALUATION AND SELECTION

Type: NewspaperMagazineRadioTelevisionOutdoorInternetAlternative

Considerations:

Mix How much of each?Cost per contact How much per person?Reach How many people?Frequency How often?Audience selectivity How targeted is audience?

Scheduling: continuous

flighted

pulsing

seasonal

Winter Spring Summer Fall

Page 45: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Define and state the objectives of sales promotion

SALES PROMOTION

Page 46: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

SALES PROMOTION

SalesPromotion

SalesPromotion

Marketing communication

activities, other than advertising, personal

selling, and public relations, in which a short-term incentive

motivates a purchase.

Page 47: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Advertising

SALES PROMOTION

Reason to buy

Sales Promotion Incentive to buy

Page 48: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

SALES PROMOTION

ConsumerSales

Promotion

ConsumerSales

Promotion

Trade Sales

Promotion

Trade Sales

Promotion

Consumer market

Marketing channel

Drive immediate purchase

Influence behavior Goal

Page 49: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Type of BuyerType of Buyer

Loyal Customers

Competitor’sCustomers

Brand Switchers

Price Buyers

Desired ResultsDesired Results

•Reinforce behavior•Increase consumption•Change purchase timing

•Break loyalty•Persuade to switch

•Persuade to buy your brand more often

•Appeal with low prices

•Supply added value

Sales PromotionSales PromotionExamples Examples

•Loyalty marketing•Bonus packs

•Sampling•Sweepstakes, contests, premiums

•Price-lowering promotion

•Trade deals

•Coupons, price-offpackages, refunds

•Trade deals

OBJECTIVES OF SALES PROMOTION

Page 50: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

REVIEW LEARNING OUTCOMETHE OBJECTIVES OF SALES PROMOTION

Page 51: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Discuss the most common forms of consumer

sales promotion

TOOLS FOR CONSUMER SALES PROMOTION

Page 52: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Coupons and RebatesCoupons and Rebates

PremiumsPremiums

Loyalty Marketing ProgramsLoyalty Marketing Programs

Contests & SweepstakesContests & Sweepstakes

SamplingSampling

Point-of-Purchase PromotionPoint-of-Purchase Promotion

TOOLS FOR CONSUMER SALES PROMOTION

Page 53: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

TOOLS FOR CONSUMER SALES PROMOTION

CouponCoupon

RebateRebate

PremiumPremium

A certificate that entitles consumers to an immediate

price reduction.

A certificate that entitles consumers to an immediate

price reduction.

A cash refund given for the purchase of a product during

a specific period.

A cash refund given for the purchase of a product during

a specific period.

An extra item offered to the consumer, usually in exchange

for some proof of purchase.

An extra item offered to the consumer, usually in exchange

for some proof of purchase.

Page 54: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

LoyaltyMarketingProgram

LoyaltyMarketingProgram

A promotional program designed to build long-term, mutually

beneficial relationships between a company and key customers.

A promotional program designed to build long-term, mutually

beneficial relationships between a company and key customers.

FrequentBuyer

Program

FrequentBuyer

Program

A loyalty program in which loyal consumers are rewarded for

making multiple purchases.

A loyalty program in which loyal consumers are rewarded for

making multiple purchases.

TOOLS FOR CONSUMER SALES PROMOTION

Page 55: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

ContestsContests Promotions that require skill or ability to compete for prizes.Promotions that require skill

or ability to compete for prizes.

SweepstakesSweepstakesPromotions that depend on

chance or luck, with free participation.

Promotions that depend on chance or luck, with

free participation.

TOOLS FOR CONSUMER SALES PROMOTION

Page 56: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

TOOLS FOR CONSUMER SALES PROMOTION

SamplingSamplingA promotional program that

allows the consumer the opportunity to try a product

or service for free.

A promotional program that allows the consumer the

opportunity to try a product or service for free.

Page 57: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

METHODS OF SAMPLING

Page 58: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Build traffic

Advertise the product

Persuade impulse buying

POINT-OF-PURCHASE PROMOTION

Page 59: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

ONLINE SALES PROMOTION

Free merchandise

Sweepstakes

Free shipping with purchases

Coupons

Effective Types of Online Sales PromotionEffective Types of Online Sales Promotion

Page 60: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

REVIEW LEARNING OUTCOMECONSUMER SALES PROMOTION

Coupons and rebates

Premiums

Loyalty marketing programs

Contests

Sampling

P-O-P

Online

Page 61: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

List the most common forms of trade sales promotion

TOOLS FOR TRADE SALES PROMOTION

Page 62: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

TRADE SALES PROMOTION

Trade AllowancesTrade Allowances

Push MoneyPush Money

TrainingTraining

Free MerchandiseFree Merchandise

Store DemonstrationStore Demonstration

Conventions & Trade ShowsConventions & Trade Shows

Page 63: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

TradeAllowance

TradeAllowance

A price reduction offered by

manufacturers to intermediaries, such as wholesalers and

retailers.

TRADE ALLOWANCE

Page 64: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Push MoneyPush MoneyMoney offered to

channel intermediaries to

encourage them to “push” products--that is, to encourage other

members of the channel to sell the

products.

PUSH MONEY

Page 65: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

BENEFITS OF TRADE PROMOTIONS

Help manufacturers gain new distribution

Obtain wholesaler and retailer support forconsumer sales promotions

Build or reduce dealer inventories

Improve trade relations

Page 66: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

REVIEW LEARNING OUTCOMEFORMS OF TRADE SALES PROMOTION

Page 67: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Discuss the role of public relations

in the promotional mix

PUBLIC RELATIONS

Page 68: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Public RelationsPublic Relations

PUBLIC RELATIONS

The element in the promotional mix that:

evaluates public attitudes identifies issues of public

concern executes programs to gain

public acceptance

Page 69: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Press relations Press relations

Product publicityProduct publicity

Corporate communicationCorporate communication

Public affairsPublic affairs

LobbyingLobbying

Employee and investor relationsEmployee and investor relations

Crisis managementCrisis management

FUNCTIONS OF PUBLIC RELATIONS

Page 70: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Product placementProduct placement

Consumer educationConsumer education

Event sponsorshipEvent sponsorship

Issue sponsorshipIssue sponsorship

Internet Web sitesInternet Web sites

New product publicityNew product publicity

PUBLIC RELATIONS TOOLS

Page 71: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

EXAMPLE OF CONSUMER EDUCATION

SOURCE: Diya Gullapalli, “Your Kid’s Teacher: The Bank,”

Wall Street Journal, April 8-9, 2006, B1.

Corporations are teaching public school students about personal finance.

People under age 25 are a fast-growing group for credit card debt increases and bankruptcy.

Is it appropriate to use educational materials with a corporate identity?

How should financial literacy be taught?

Page 72: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

CrisisManagement

CrisisManagement

MANAGING UNFAVORABLE PUBLICITY

Page 73: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

REVIEW LEARNING OUTCOMETHE ROLE OF PUBLIC RELATIONS

Page 74: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Describe personal selling

PERSONAL SELLING

Page 75: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

PERSONAL SELLING

Personal Selling is more important if...

Customers are concentrated.

Customers are concentrated.

Product is technically complex.

Product is technically complex.

There are few customers.There are few customers.

Product is custom made.Product is custom made.

Product has a high value.Product has a high value.

Customers are geographically dispersed.

Customers are geographically dispersed.

Product is simple to understand.

Product is simple to understand.

There are many customers.There are many customers.

Product is standardized.Product is standardized.

Product has a low value.Product has a low value.

Advertising & Sales Promotion are more important if...

Page 76: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

REVIEW LEARNING OUTCOMEPERSONAL SELLING

Detailed explanation or demonstration

Variable sales message

Directed to qualified prospects

Controllable adjustable selling costs

More effective than other promotion in obtaining sale and gaining customer satisfaction

PersonalSelling

Advantages

PersonalSelling

Advantages

Page 77: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Discuss the key differences between relationship selling

and traditional selling

RELATIONSHIP SELLING

Page 78: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Relationship(Consultative)

Selling

Relationship(Consultative)

Selling

RELATIONSHIP SELLING

A sales practice that involves building, maintaining, and

enhancing interactions with customers in order

to develop long-term satisfaction through mutually beneficial

partnerships.

Page 79: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

TRADITIONAL SELLING AND RELATIONSHIP SELLING

Sell advice, assistance, counsel Sell products

TraditionalTraditionalPersonal SellingPersonal Selling

Focus on closing sales

Limited sales planning

Discuss product

Assess “product-specific” needs

“Lone wolf” approach

Pricing/product focus

Short-term sales follow-up

Focus on customer’s bottom line

Sales planning is top priority

Build problem-solving environment

Conduct discovery in scope of operations

Team approach

Profit impact and strategic benefit focus

Long-term sales follow-up

Relationship SellingRelationship Selling

Page 80: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

REVIEW LEARNING OUTCOME RELATIONSHIP SELLING VS. TRADITIONAL SELLING

InitialSales

RepeatSales

SuccessiveSales

Traditional Sales

Relationship Sales

SalesIncreasesResultFromCreatingValue

Page 81: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

List the steps in the selling process

STEPS IN THE SELLING PROCESS

Page 82: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Generate LeadsGenerate Leads

Qualify LeadsQualify Leads

Probe Customer NeedsProbe Customer Needs

Develop SolutionsDevelop Solutions

Handle ObjectionsHandle Objections

Close the SaleClose the Sale

Follow UpFollow Up

STEPS IN THE SELLING PROCESS

Page 83: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Key Selling StepsTraditional

Selling

Relationship

Selling

Generate Leads High Low

Qualify Leads Low High

Probe Needs Low High

Develop Solutions Low High

Handle Objections High Low

Close the sale High Low

Follow-up Low High

TIME SPENT IN KEY STEPS OF SELLING PROCESS

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AdvertisingAdvertising PublicityPublicityDirect Mail/

Telemarketing

Direct Mail/Telemarketin

g

Cold CallingCold Calling Internet Web Site

Internet Web Site ReferralsReferrals

Trade Shows/Conventions

Trade Shows/ConventionsNetworkingNetworking Company

RecordsCompany Records

GENERATING LEADS

Page 85: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Cold CallingCold Calling

COLD CALLING

A form of lead generation in which the salesperson

approaches potential buyers without any prior

knowledge of the prospects’ needs or

financial status.

Page 86: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Recognized needRecognized need

Buying powerBuying power

Receptivity andaccessibility

Receptivity andaccessibility

QUALIFYING LEADS

Page 87: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

NeedsAssessment

NeedsAssessment

NEEDS ASSESSMENT

A determination of the customer’s specific

needs and wants and the range of options a

customer has for satisfying them.

Page 88: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Product or serviceProduct or service

CustomersCustomers

CompetitionCompetition

IndustryIndustry

Salesperson must knoweverything

about...

Salesperson must knoweverything

about...

THE CONSULTATIVE SALESPERSON

Page 89: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

DEVELOPING AND PROPOSING SOLUTIONS

Sales ProposalSales Proposal

Sales PresentationSales Presentation

Page 90: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Be well prepared

Use eye contact

Ask open-ended questions

Be poised

Use hand gestures and voice inflection

Focus on the customer needs

Incorporate visual elements

Know how to operate the A/V equipment

Make sure the equipment works

PRACTICE, PRACTICE, PRACTICE!

POWERFUL PRESENTATIONS

Page 91: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

View objections as requests for information

Anticipate specific objections

Investigate the objection with the customer

Be aware of competitors’ products

Stay calm

Use the objection to close the sale

HANDLING OBJECTIONS

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CLOSING THE SALE

NegotiateNegotiate

Keep an open mindKeep an open mind

Look for customer signals

Look for customer signals

Tailor to each marketTailor to each market

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REVIEW LEARNING OUTCOMESTEPS IN THE SELLING PROCESS

Page 94: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Describe the functions of sales management

SALES MANAGEMENT

Page 95: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Evaluate sales forceEvaluate sales force

Compensate and motivate sales forceCompensate and motivate sales force

Recruit and train sales forceRecruit and train sales force

Determine sales force structureDetermine sales force structure

Define sales goals and sales processDefine sales goals and sales process

SALES MANAGEMENT RESPONSIBILITIES

Page 96: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

ClearClear

PrecisePrecise

MeasurableMeasurable

Time SpecificTime Specific

DEFINING SALES GOALS

Sales VolumeMarket ShareProfit Level

Page 97: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

QuotaQuotaA statement of the

individual salesperson’s sales objectives, usually based on sales volume alone but sometimes

including key accounts, new accounts, repeat

sales, and specific products.

QUOTA

Page 98: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

SALES FORCE STRUCTURE

Individual client or account

Individual client or account

Market or industryMarket or industry

Marketing functionMarketing function

Product lineProduct line

Geographic regionGeographic region

Page 99: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

CHARACTER OF TOP SALES PERFORMERS

Strong, healthy self esteem

Can bounce back from rejection

Sense of urgency and competitiveness

Persuasive

Self-confident

Sociable

Willing to take risks

Understand complex concepts

Creative in developing solutions

Possess empathy

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Training includes...

Training includes...

Nonselling dutiesNonselling duties

Industry and customer characteristics

Industry and customer characteristics

Product knowledgeProduct knowledge

Selling techniquesSelling techniques

Company policies and practice

Company policies and practice

TRAINING THE SALES FORCE

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COMPENSATING THE SALES FORCE

CommissionCommission

SalarySalary

CombinationPlans

CombinationPlans

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StraightCommission

StraightCommission

The salesperson is paid some percentage when

a sale is made.

The salesperson is paid some percentage when

a sale is made.

StraightSalary

StraightSalary

The salesperson receives a salary regardless of

sales productivity.

The salesperson receives a salary regardless of

sales productivity.

COMPENSATING THE SALES FORCE

Page 103: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

MOTIVATING THE SALES FORCE

Ceremonies Plaques

Vacations Merchandise Pay raises

Cash bonuses Stock options

Tuition assistance Product discounts

Rewards and incentives include:

Page 104: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

KEY PERSONALITY TRAITS OF SALES LEADERS

Effective Sales Leaders are…

Are confident Are confident

Possess ego drivePossess ego drive

Possess ego strengthPossess ego strength

Take risksTake risks

Are innovativeAre innovative

Have a sense of urgencyHave a sense of urgency

Are empatheticAre empathetic

Page 105: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

EVALUATING THE SALES FORCE

Contribution to profitContribution to profit

Calls per orderCalls per order

Sales or profits per callSales or profits per call

Call percentage achieving goalsCall percentage achieving goals

Sales volumeSales volume

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WOMEN IN CAR SALES

SOURCE: Jennifer Saranow, “Car Dealers Recruit Saleswomen at the Mall,”

Wall Street Journal, April 12, 2006, B1.

For its Florida and Texas dealerships, Asbury Automotive Group is actively recruiting saleswomen– at shopping malls.

11% of the automotive sales force is female. In contrast, 50% of retail-industry employees are women.

Women influence 81% of new auto purchases, and women may even be better at selling cars than men.

Page 107: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

THE IMPACT OF TECHNOLOGY ON PERSONAL SELLING

Cell phonesCell phones

LaptopsLaptops

PagersPagers

E-MailE-Mail

Electronic organizersElectronic organizers

InternetInternet

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REVIEW LEARNING OUTCOME FUNCTIONS OF SALES MANAGEMENT

Page 109: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Direct marketing(direct-response marketing)

DIRECT MARKETING

Page 110: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Direct MarketingDirect Marketing

DIRECT MARKETING

Techniques used to get consumers to

make a purchase from their home, office, or

another nonretail setting.

Page 111: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

TYPES OF DIRECT MARKETING

Catalogs and Mail OrderCatalogs and Mail Order

TelemarketingTelemarketing

Direct MailDirect Mail

Page 112: ADVERTISING, SALES PROMOTION, PUBLIC RELATIONS, PERSONAL SELLING, AND DIRECT MARKETING

Q & A SESSION THANK YOU…