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Unit 9 Promotional Mix Strategies: Communication Process
Unit 9 Promotional Mix Strategies: Communication Process
UNIT 9
PROMOTIONAL MIX STRATEGIES
• Communication process
• Elements of promotional mix
• Determining the promotion mix
• Push versus pull strategy
• Promotional mix decisions
COMMUNICATION PROCESS
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DEFINITION
Communication?
COMMUNICATION PROCESS
Feedback
Noise
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COMMUNICATION PROCESS
COMMUNICATION PROCESS
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COMMUNICATION PROCESS
OBJECTIVES OF COMMUNICATION
not Awareness
Product
Information Forget
(promotional stimulus)
Aware about the product
Don’t
Information understand
Understanding the product
Trust Doubt
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ELEMENTS OF
PROMOTIONAL MIX
PROMOTIONAL MIX
Advertising
Personal selling
Sales promotion
Public relations
Direct marketing
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PROMOTIONAL MIX
➢ Advertising
Any paid form of nonpersonal presentation and promotion of
ideas, goods or services by an identified sponsor
➢ Personal selling
Presentation by the firm’s salesforce for the purpose of making
sales and building customer relationships
➢ Sales promotion
Short term offers made by manufacturer to increase the sales.
➢ Public relation
Building good relations with the company’s various publics by
obtaining favourable publicity.
➢ Direct marketing
Direct contact with customer
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DETERMINING THE
PROMOTION MIX
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FACTORS AFFECTING
PROMOTION MIX
❖ Target market
❖ Buyer readiness Promotion ❖ Nature of product
stages mix ❖ Availability of funds
❖Product life cycle decisions
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PULL STRATEGY
Demand Demand
Retailers and
Producer Consumers
Wholesalers
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PUSH STRATEGIES
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PULL STRATEGIES
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PROMOTIONAL MIX
DECISIONS
DEFINITION - ADVERTISING
Advertising?
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PURPOSE OF ADVERTISING
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TYPES OF ADVERTISING
❖ Institutional or corporate advertising – promoting a
concept, an idea or the goodwill of an industry,
company, organisation.
❖ Product advertising - deals with the nonpersonal selling
of a particular good or service.
❖ Informative advertising - develop initial demand for a
good/service. Its seeks to announce the availability of a
product/service.
❖ Persuasive advertising - attempts to develop demand
for a product/service and stimulate the sales. Reminder
– reinforce previous promotional activity
❖ Reminder advertising - strives to reinforce previous
promotional activity by keeping the name of the goods,
service, organisation, before the public
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ADVERTISING DECISIONS
Objectives setting
-Communication objectives
-Sales objectives
Message decisions
ADVERTISING MANAGEMENT
PROCESS
Identify and analyse • identification of target audience and understand its characteristics
the target audience
Measure advertising ▪ This evaluate both the communication effects and the sales effort
effectiveness of the advertising regularly
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POSSIBLE ADVERTISING
OBJECTIVES
Informative advertising Persuasive advertising
• Telling the market about a • Building brand preference
new product • Encouraging switching to
• Suggesting new uses for a your brand
product • Changing customer’s
• Informing the market of a perception of product
price change attributes
• Explaining how the product • Persuading customer to
works purchase now
• Describing available • Persuading customer to
services receive a sales call
• Correcting false
impressions
• Reducing consumers fears
• Building a company image
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POSSIBLE ADVERTISING
OBJECTIVES
Reminder advertising
• Reminding consumer that
the product may be
needed in the near future
• Reminding consumer
where to buy it
• Keeping it in customer’s
mind during off-seasons
• Maintaining its top-of-mind
awareness
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ESTABLISH THE
ADVERTISING BUDGET
➢ Five main methods for setting advertising
budget
Affordable method
Percentage-of-sale method
Competitive-parity method
Historical method
Objective-and-task method
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ESTABLISH THE
ADVERTISING BUDGET
➢ Affordable method
Setting the advertising budget at the level
management thinks the company can afford
Appropriate for small business
Total revenue deduct operating expenses ̃ capital
outlays, then devote some portion of the remaining
funds to advertising
The company cannot spend more on advertising
than it has
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ESTABLISH THE
ADVERTISING BUDGET
➢ Percentage-of-sale method
Setting the advertising budget at a certain percentage of
current or forecasted sales or as a percentage of the unit sales
price
Simple
Help management to think about the relationship between
advertising spending, selling price, and profit per unit
It wrongly views sales as the cause of advertising rather than
as the result
This method does not provide any basis for choosing a specific
percentage, except what has been done in the past or what
competitors are doing
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ESTABLISH THE
ADVERTISING BUDGET
➢ Competitive-parity method
Setting the promotion budget to match competitors’
outlays
Strongly monitor competitors’ advertising
The firm pursue this method think:
Competitors’ budget represent the collective wisdom of
the industry
Spending what competitors spend helps prevent
advertising wars
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ESTABLISH THE
ADVERTISING BUDGET
➢ Historical method
Setting the advertising budget based on the
historical advertising expenses.
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ESTABLISH THE
ADVERTISING BUDGET
➢ Objective-and-task method
Developing advertising budget by defining specific objectives,
determining the tasks that must be performed to achieve these
objectives, and estimating the costs of performing these tasks.
The sum of these costs is the proposed advertising budget
This method force management to spell out its assumptions
about the relationship between cost spent and advertising
results.
The most difficult method
It is hard to figure out which specific will achive specific
objectives
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ESTABLISH THE
ADVERTISING BUDGET
➢ Other factors affecting the budget
Stage in the product life cycle: more budget for new
product, lower for mature product
Market share: Building market share or taking share
from competitors requires larger advertising
spending then maintaining current share
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CREATING THE
ADVERTISING MESSAGE
➢ Message strategy
The purpose of advertising is to get consumers to think about
or react to the product or company in certain way
Identifying customer benefits – develop compelling creative
concept or “big idea” that will bring the message strategy to life
in a distinctive and memorable way
Advertising appeals should have three characteristics:
Meaningful: pointing out benefits that make the product more
desirable or interesting to consumers
Believable: consumers must believe that the product or service will
deliver the promised benefits
Distinctive: They should tell how the product is better than the
competing brands
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MESSAGE EXECUTION
Execution styles Details
Slice of life Shows one or more “typical” people using the product in a normal setting
Mood or image Builds a mood or image around the product, such as beauty, love or serenity. No
claim is made about the product except through suggestion
Musical Shows one or more people or catoon characters singing about the product
Personality symbol Creates a character that represents the product. The character might be animated
or real
Technical expertise Shows the company’s expertise in marking the product
Scientific evidence Presents survey or scientific evidence that the brand is better or better liked than
one or more other brands
Testimonial evidence Features a highly believable or likable source endorsing the product. It could be
or endorsement ordinary people saying how much they like a given product or a celebrity
presenting the product
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SELECT THE
ADVERTISING MEDIA
➢ Major steps in media selection
Deciding on reach, frequency, and impact
Choosing among major media types
Selecting specifc media vehicles
Deciding on media timing
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ADVANTAGES AND
LIMITATIONS OF MEDIA TYPE
Flexibility
Short life Newspaper Good local market coverage
(Poor) reproduction quality Broad acceptability
Small pass-along audience High believability
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ADVANTAGES AND
LIMITATIONS OF MEDIA TYPE
High geographic and
demographic selectivity
Long ad purchase lead time Credibility and prestige
High cost Magazines
High quality reproduction
No guarantee of position long life and good pass-along
readership
Flexibility
Outdoor High repeat exposure
Little audience selectivity Low cost
Creative limitations Low message competition
Good positional selectivity
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ADVANTAGES AND
LIMITATIONS OF MEDIA TYPE
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MEASURE THE
ADVERTISING EFFECTIVENESS
➢ Measuring communication effects
To evaluate whether the ad is communicating well
Can be done before and after an ad is printed or broadcast -
how they like the ad, message recall, or product awareness..
➢ Measuring sales efforts
Sales effect is hard as sales are affected by many factors
beside advertising
Comparing past sales with past advertising expenditures
Another way is through experiments – vary the amount of
spend for advertising
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Sales promotion?
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➢ Consumers
To build trial of a new product/service, stimulate
larger purchase or attract switchers
➢ Middleman
To encourage stocking, to induce retailers to
increase inventory levels, encourage off-season
purchases, or open up new accounts
➢ Sales foces
To increase sales, or encourage the support of a
new product
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CONSUMER PROMOTION
Consumer Details
promotion tools
Sample A small amount of a product offered to consumers for trial. They are offered free or
charged small amount to offset its cost. Delivered door-to-door, sent by mail, handed
out in a store, attached to another product…
Coupon Certificate that gives buyers a saving when they purchase a specified product.
Cash refund offer Offer to refund part of the purchase price of a product “proof of purchase” to the
(rebate) manufacturer
Price pack Offer consumers saving off the regular price of a product. Reduced price that is
marked by the producer directly on the label or package
Premium Good offered either free or at low cost as an incentive to buy a product
Advertising Are useful articles imprinted with an adertiser’s name that are given as gifts to
specialty consumers. E.g. pens, calendars, key rings…
Patronage reward Are cash or other awards offered for the regular use of a certain firm’s products. E.g.
airline offer awarding points for km traveled…
Contests, Promotion events that give consumers the chance to win something – such as cash,
sweepstakes, trip or goods – by luck or through extra effort.
games
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TRADE/BUSINESS PROMOTION
➢ Many tools used for consumer promotions (contests, premiums, displays)
can be used as trade promotion
❖ Conventions and trade shows
These are used to generate business leads, stimulate consumers.
These are used to reach many prospects that are not reached through
the normal sales force.
❖ Free merchandise:
Extra amount of product are offered
❖ Advertising supports
Organization can help middlemen to set up displays, provide
promotional material or advertise in the media.
❖ Training program
Organization can provide training for the middlemen’s staff
❖ Discount:
A straitght reduction in price on purchases during a stated period of
time. It can be seasonal discount or quantity discount
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Public relations?
FUNCTIONS OF PUBLIC
RELATIONS
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Direct marketing?
Direct communications
with carefully targeted individual
consumers to obtain an
immediate response
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ADVANTAGES OF
DIRECT MARKETING
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TELEMARKETING
Telemarketing
▪Using telephone to sell directly to
consumers
▪Outbound telephone marketing:
telemarketer makes outgoing call to
customers
▪Inbound telephone marketing: customers, in
response to advertisement, call to the
telemarketer.
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DIRECT RESPONSE/TELEVISION
MARKETING
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ON-LINE SHOPPING
On-line shopping
▪E-commerce allows interactive on-line
computer purchase, they link consumers
with sellers electronically.
▪Using appropriate database
management, marketer can target specific
audiences
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