MKTG 504 - Promotion and Communication

“Are you looking for a 25’’ color TV for $275? Here it is.”

Dr. Dennis PittaUniversity of Baltimore

PROMOTION

Promotion = Communicationwhich INFORM potential consumersand PERSUADE them of theWANT SATISFYING benefits of products and services.

THE COMMUNICATION PROCESS

Involves:Sender ( the advertiser)MessageMediumAudience

and maybeFeedback

Marketing Communications

Should start with an audience - the consumer!

PROMOTION MIX- DESCRIPTION - - NAME -

Paid Nonpersonal Advertising

Paid Personal Personal Selling

Nonpaid Nonpersonal Publicity

Nonpaid Personal Word of Mouth_______________________________________________Plus

Everything Else Sales Promotion

DESCRIPTION NAME

PAID NONPERSONAL ADVERTISING

PAID PERSONAL PERSONALSELLING

NONPAID NONPERSONAL PUBLICITY

NONPAID PERSONAL Word of MouthEverything else SALES

PROMOTION

PROMOTION MIX CHARACTERISTICS

EXPENSE PEREXPOSURE

EFFECTIVENESSPER EXPOSURE

AdvertisingLOW LOW

Personal Selling V. HIGH HIGH

Publicity V. LOW MOD. HIGH

Word of Mouth V. LOW V. HIGH

Sales Promotion MODERATE HIGH

ADVERTISING

Any PAID form of NONPERSONALpresentation and promotion of

ideas,goods, and/or services by anIDENTIFIED SPONSER.

Examples: Let Your Fingers Do the Walking; McDonalds’...

PERSONAL SELLING

DIRECT INTERACTION between parties - an oral presentation in conversation with one individual acting as a ‘selling agent’.

Example: Avon Representatives, Checkout person, you in an interview.

PUBLICITY

Any form of commercially significant news about an organization, good, service, idea that is published by a mass medium and that is NOT paid for by a sponsor.

Examples: Ebert (without Siskel), gourmet critics...

PUBLIC RELATIONS:

PublicityInstitutional Advertising

PUBLICITY: Traditional Media

RadioTVNewspaperMagazinesOrganization NewslettersEvents (e.g., Holiday celebrations...)...

PUBLICITY: NEW MEDIA

Internet Home PagesInternet Press Release Sources

WORD OF MOUTH (ADVERTISING)

Any form of interaction between individuals in which, neither party represents a ‘seller’.

Examples: a restaurant recommendation from a friend, a colleague’s evaluation of a movie, a neighbor’s statements about a university.

SALES PROMOTION

Sales Promotion = The promotional technique which emphasizes: Coupons, Rebates, Premiums, Contests, Sweepstakes, Trading Stamps, Free Gifts, Samples, Point of Purchase Promotions, Trade Shows.....

Sales Promotion is The Group of Activities Which Aim At:

STIMULATING CONSUMER PURCHASES

ENHANCING DEALER EFFECTIVENESS

INCREASING SALESPERSON EFFECTIVENESS

Choose the MIX of PROMOTIONAL methods to achieve communication objectives.

ADVERTISING

Major Decisions:

HOW MUCH TO SPEND?ADVERTISE TO WHOM?WHAT TO SAY?WHEN (AND WHERE) TO SAY IT?HOW TO DETERMINE ITS EFFECTS?

BUDGETING FOR ADVERTISING

FIVE METHODSALL YOU CAN AFFORD*% OF SALES*UNITS OF SALES*COMPETITIVE PARITY*

OBJECTIVE AND TASK METHOD**** = STUPID *** = GREAT

OBJECTIVE AND TASK METHOD OF BUDGETING

SET OBJECTIVES ANDDETERMINE THE ADVERTISING TASKS ( THE HIERARCHY OFEFFECTS) NECESSARY TO ACHIEVE

THEM

EXAMPLE OF ADVERTISING HIERACHY OF EFFECTS

ACTIONCONVICTIONCOMPREHENSIONAWARENESSEXPOSURE

EXAMPLE OF ADVERTISING OBJECTIVES

ACTION + 1% (the goal)

CONVICTION + 11%COMPREHENSION + 22%AWARENESS + 56%EXPOSURE + 100%

EXAMPLE OF ADVERTISING OBJECTIVES used for budgeting

ACTION + 1%CONVICTION + 11%COMPREHENSION + 22%AWARENESS + 56%

$55, 000 EXPOSURE + 100%

ADVERTISING TO WHOM?

CHOOSING A TARGET AUDIENCE IS CRITICAL.

MEDIA AFFECT THE ABILITY TO REACH MARKET.

TV: MUCH WASTED EXPOSURE. MAGAZINES: MORE SPECIFIC COVERAGE -

LESS WASTE.DIRECT MAIL: MOST SPECIFIC - LEAST WASTE

WHAT TO SAY?

MESSAGE RESEARCH IS A SCIENCE

START WITH THE AUDIENCE

USE: REPETITION, NOVELTY, CONTRAST, HUMOR

MESSAGE RESEARCH REQUIRES TESTING.

WHEN AND WHERE TO SAY IT?

MEDIA RESEARCH INVOLVES WHEN AND WHERE THE TARGET AUDIENCE EXPOSES ITSELF TO YOUR MESSAGE.

SOME MAGAZINES, TV PROGRAMS ARE BETTER FOR REACHING WOMEN OR MEN, YOUNG OR OLD.

WITH WHAT EFFECTS?

MEASURING ADVERTISING EFFECTIVENESS

PRETEST

PORTFOLIO TEST (AWARENESS, RECALL)

LAB TESTS

AFTER APPEARING IN THE MEDIA (POST TEST)

PERSONAL SELLING: Sales Tasks

ORDER GETTING TASKS: Focus on converting prospects to customers or in getting customers to buy products they have not purchased before.

ORDER TAKING TASKS: Focus on building repeat sales of products that customers have purchased previously.

SALES SUPPORT TASKS: Facilitate order getting and

order taking.

THE PERSONAL SELLING PROCESS

PROSPECTINGPREPARING THE PREAPPROACHAPPROACHPRESENTATIONHANDLING OBJECTIONSCLOSING THE SALEPOST SALE FOLLOW-UP

PROSPECTING

The process of searching for, identifying, and qualifying potential customers.

Leads => qualified prospectsIF they can benefit from the product, IF they can afford it, IF they can make the buying decision.

SOURCES OF LEADS

INTERNAL: COMPANY RECORDS, PERSONNEL

EXTERNAL: TRADE JOURNALS, PRESENT CUSTOMERS, TRADE SHOWS.

PREPARING THE PREAPPROACH

Gathering specific information about the

prospect which will help in tailoring the

sales presentation to the prospects’ situation.

APPROACH

The manner chosen to gain access to the

prospect, establish rapport, and get the

prospect’s attention and interest.

PRESENTATION

There are various approaches:Stimulus-Response SellingBarrier SellingFormulized Selling*Need-Satisfaction Selling =>

recognizes that the main reason people buy comes from within the person, not from outside stimuli.

HANDLING OBJECTIONS

Encouraging prospects to voice objections

provides FEEDBACK and helps the salesperson deal with objections in a positive fashion.

CLOSING THE SALE

The CLOSE involves asking the prospect for

an order. Closing is an art, and may take

many forms.

Types of Closing Techniques

Standing Room Only Close (It’s the Last One)

Extra Inducement CloseEmotional CloseSilent CloseAlternative Decision Close (Either/Or)

POST SALE FOLLOW-UP

Important since it helps ensure:customer satisfactiongoodwillmay lead to repeat business

SALES FORCE ISSUES

ORGANIZING THE SALE FORCETERRITORIAL SPECIALIZATION

PRODUCT SPECIALIZATION TASK SPECIALIZATION

TASK MARKET SPECIALIZATIONRECRUITING AND SELECTING THE

SALES FORCE

TRAINING AND DEVELOPMENT OF THE SALES FORCE

COMPENSATING THE SALES FORCESTRAIGHT SALARYSTRAIGHT COMMISSIONCOMBINATION PLANS

MOTIVATING THE SALES FORCE

That depends on their strengths.

Two vital measures are:1) the effectiveness of a single exposure and2) the cost of a single exposure

When do you use each element?

ADVERTISING

Any PAID form of NONPERSONALpresentation and promotion of

ideas,goods, and/or services by anIDENTIFIED SPONSER.

Examples: Let Your Fingers Do the Walking; McDonalds’...

Let’s look at ADVERTISING

A 30 second commercial aired on the SuperBowl might cost $500,000.

If 50,000,000 people see it, it costs, $.01 or one penny per person exposed (LOW)

How many people run out and buy the product? 5000? That is 1 in 1000 or .1% of viewers (LOW SUCCESS RATE)

PERSONAL SELLING

DIRECT INTERACTION between parties - an oral presentation in conversation with one individual acting as a ‘selling agent’.

Example: Avon Representatives, Checkout person, you in an interview.

Let’s look at PERSONAL SELLING

A single sales call by a salesperson costs $750 (VERY HIGH EXPENSE PER EXPOSURE)

If he or she sells one customer in 4 that is a 25% success rate (HIGH SUCCESS RATE)

PUBLICITY

Any form of commercially significant news about an organization, good, service, idea that is published by a mass medium and that is NOT paid for by a sponsor.

Examples: Ebert (without Siskel), gourmet critics...

Let’s look at PUBLICITY

A favorable restaurant review by a restaurant critic costs nothing but consistent good food (VERY LOW)

If 10% of the readers come to your restaurant because of the review (MODERATELY HIGH SUCCESS RATE)

WORD OF MOUTH (ADVERTISING)

Any form of interaction between individuals in which, neither party represents a ‘seller’.

Examples: a restaurant recommendation from a friend, a colleague’s evaluation of a movie, a neighbor’s statements about a university.

Let’s look at WORD OF MOUTH advertising

A favorable restaurant comment by a friend costs nothing but consistent good food (VERY LOW)

If 50% of the friends come to your restaurant because of the comments (VERY HIGH SUCCESS RATE)

SALES PROMOTION

Sales Promotion = The promotional technique which emphasizes: Coupons, Rebates, Premiums, Contests, Sweepstakes, Trading Stamps, Free Gifts, Samples, Point of Purchase Promotions, Trade Shows.....

So...

Choose the MIX of PROMOTIONAL methods to achieve communication objectives.