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					Promotional Concepts
   and Strategies
      Chapter 17
               Goals
• Explain the role of promotion in
  business and marketing
• Identify the various types of
  promotion
• Distinguish between public relations
  and publicity
• Write a news release
               Goals
• Describe the concept of the
  promotional mix
• Define sales promotion
• Explain the use of promotional tie-in,
  trade sales promotions, and loyalty
  marketing programs
 Promotion and
Promotional Mix
          Promotion
• Persuasive communication
• Inform people about the products
  and services
• Enhance public image and reputation
• Persuade people that their products
  are valuable
     Product Promotion
• Convince prospects to select its
  products or services instead of a
  competitors
• Explain major features and benefits,
  where sold, advertise sales, answer
  questions, introduce new offering
• Foster good relations with current
  customers
  Institutional Promotion
• Used to create a favorable image for
  the company
• Advocate for change
• Provide news, product and general
  information, answer questions
• Foster favorable image
Answer #1 now

HOW CAN A BUSINESS EVALUATE
THE EFFECTIVENESS OF THEIR
PROMOTIONAL STRATEGIES?
      Types of Promotion
1.   Personal Selling
2.   Advertising
3.   Direct Marketing
4.   Sales Promotion
5.   Public Relations
       Personal Selling
• Sales Representatives with direct
  contact with customers
• Costly
• Meetings, telemarketing, any
  correspondence
• May take place after
           Advertising
• Form of non-personal promotion
• Promote ideas, goods, services in a
  variety of outlets
• Magazines, newspapers, TV,
• One-way communication to the
  customer
Answer #2 now

WRITE A PARAGRAPH ABOUT A
TIME WHERE A PARTICULAR AD
CONVINCED YOU TO BUY A
PRODUCT. GIVE DETAILS ABOUT
THE AD AND WHY IT APPEALED TO
YOU.
         Direct Marketing
•   Advertising to a targeted group
•   Prospects and customers
•   Printed and direct mail
•   Generate sales or leads
•   One way communication
       Sales Promotion
• All marketing activities other
  personal selling, advertising, public
  relations
• Used to simulate purchasing and
  sales
• Increase sales, inform about new
  products and create a positive image
       Public Relations
• Influence a target audience
• Create a favorable image for
  company, products, or policies
• Cultivate media relations
Answer #3 now

THINK OF A COMPANY AND TRY TO
FIND FOUR OR FIVE WAYS THAT
THAT COMPANY USES PUBLIC
RELATIONS TO ENHANCE ITS
CORPORATE IMAGE.
  Writing News Releases
• An announcement sent to media
  outlets
• Developments about products,
  services, or anything
             Publicity
• Bringing news or noteworthy
  information to the public’s attention
• Develop a positive perception
• People like to business with
  reputable companies
• Image building by sponsoring events,
  donating for public use
       Publicity is Free
• A one minute story on the news is
  free
• An ad may be very expensive
• News outlets are seen as objective
• May be incorporated into a larger
  story
         Disadvantages
• Message is tough to control
• Media decides how to release the
  content
• Negative stories are just as likely to
  reported
      Negative Publicity
• Adverse publicity due to a particular
  reason
• Can devastate an image
• Can come from any type of event
• Dissatisfied customer or employee
Answer #4 now

THINK OF EXAMPLES OF GOOD
PUBLICITY. WHAT ARE SOME WAYS
A COMPETITOR CAN REACT TO
ANOTHER COMPANIES SUCCESSFUL
PROMOTION ACTIVITIES?
       Promotional Mix
• Combination of strategies and cost-
  effective allocation of resources
• Use more than one type of
  promotion to achieve goals
• Business will follow a series of steps
  to establish the right mix
       Promotional Mix
• Ideally the strategies will
  complement each other
• Elements must be coordinated
• In store displays reinforce a national
  campaign
• Sales personnel made aware of
  campaigns
      Promotional Budget
•   May include allocating resources
•   Coordinating campaigns
•   Supervising outside resources
•   Measuring results
•   May be a percentage of sales
•   Dictated by revenue
           Push Policy
• Manufacturer pushes product to the
  retailer
• Retailer convinced to stock product
  being promoted
• Relies on personal selling and sales
  promotion
• Trade shows
           Pull Policy
• Promotion directed to the
  consumers
• Create consumer interest and
  demand
• Consumers will encourage retailers
  to stock product
• Advertising geared at consumers
Answer #5 now

COMPARE THE COMMUNICATION
PROCESS IN ADVERTISING TO THE
COMMUNICATION PROCESS IN
PERSONAL SELLING.
Types of Promotion
       Sales Promotion
• Incentives that encourage customers
  to buy products or services
• Buy a new product
• Increase purchases
• Reward loyalty
Answer #6 now

GIVE FOUR EXAMPLES OF
DIFFERENT PROMOTIONS THAT
YOU FREQUENTLY ENCOUNTER
      Trade Promotions
• Sales promotion activities designed
  to get support for a product from
  manufacturers
• More money on promoting to
  business rather than to customers
        Trade Promotions
•   Promotional Allowances
•   Cooperative Advertising
•   Slotting Allowances
•   Sales Force Promotions
•   Trade Shows and Conventions
 Promotional Allowances
• Cash payments or discounts given by
  manufacturers to retailers for
  performing activities to encourage
  sales
• Encourage retailers to stock a large
  quantity
• Cash incentive gives retailer a
  motivation
 Cooperative Advertising
• Manufacturer pays part of the cost
  for advertising the product locally
     Slotting Allowance
• Premium paid by a manufacturer to a
  retailer to help cover the costs of
  putting the products on the shelves
• Buying the best space in the store
• May pay for retailer discounts, store
  advertising, and display costs
  Sales Force Promotion
• Awards given to dealers or
  employees who exceed a sales quota
• Quota can be for a period of time or
  a particular line of products
• May include cash or merchandise or
  travel
Trade Shows/Conventions
• Showcase a line of products
• Consumer Electronic Show
• Company may invest millions in
  display booths
• Introduce new products, meet
  customers, partners in the
  distribution chain
  Consumer Promotions
• Sales strategies that encourage
  customers or prospects to buy a
  product or service
• Support advertising, personal selling,
  and promotional efforts
    Consumer Promotions
•   Coupons           • Promotional tie
•   Premiums            ins
•   Deals             • Product
•   Incentives          placement
•   Product Samples   • Loyalty programs
•   Sponsorship       • Point of Puchase
            Coupons
• Cash discounts on goods and services
• Used to introduce new products,
  enhance sales, encourage retailers to
  stock and display
• Can be placed inside packages, in
  media, online
• Stores send coupons to be paid back
           Premiums
• Low-cost items given to consumers
  at a discount or free
• Increase sales by building product
  loyalty and finding new customers
• May persuade some to switch
• Added value
     Types of Premiums
• Factory Pack
• Free gift placed inside
• Toy inside cereal box
• Traffic Builders
• Low cost items given for attending an
  event
• Pens, coffee mugs, etc
    Types of Premiums
• Coupon Plans
• Offers a variety of rewards for
  multiple purchases
• Sending the manufacturer soup can
  labels
Answer #6 now

THINK OF A CONSUMER PREMIUM
THAT YOU OR YOUR FAMILY USES
AND DESCRIBE IT IN A PARAGRAPH.
               Deals
• Short term price reduction marked
  directly on the packaging
• Tying two similar products together
• Shampoo and conditioner together
           Incentives
• Higher priced products earned or
  given away through contests,
  sweepstakes, rebates
• Create customer excitement and
  increase sales
• Enter a code to win prizes
      Product Samples
• Free trial sized products given away
• Door to door, mail, retail stores,
  trade shows
• Detergents, toothpaste, shampoos…
• Promoting new products
• Drug Manufacturers to Doctors
         Sponsorship
• Company pays for the right to
  promote itself and an event
• Games, person, auto racing
• Deal must be withstand public and
  media scrutiny
• Tough to measure efectivness
Answer #7 now

WHERE ARE SOME LOCATIONS
WHERE A SPONSOR MIGHT BE
FOUND? GIVE THREE EXAMPLES
    Promotional Tie-ins
• AKA – cross promotion and cross-
  selling
• Sales promotional arrangements
  between one or more retailers
• Mutually beneficial results
• Combine promotion to create more
  sales
• Click through’s on the internet
     Product Placement
• Placing a name brand product in a
  movie, tv show, sporting event
• Money may be used to defer costs of
  production
• Gain recognition and increase
  exposure
      Loyalty Marketing
• Frequent buyer programs
• Reward customer for continued
  business
• Customers are so satisfied they
  continue to patronize
• Frequent flyer programs
      Point-of-Purchase
• Displays designed by manufacturers
  to hold and display products
• Stimulate sales and serve as in-store
  advertising
• More on this in Chapter 18
Answer #8 now

WHY DO BUSINESSES USE
DIFFERENT TYPES OF SALES
PROMOTIONS INSTEAD OF RELYING
ON JUST ONE?

				
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