TIM3221

INTERNET MARKETING

LEC 05:
PROMOTION
Learning Outcomes
After the end of Lecture 5, you will be able to:

• Define promotion and describe how it contributes to

customer value.
• Discuss how promotion methods and objectives and
applying to online products.
• Relate promotion Over Product Life Cycle.

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Promotion
Promotion refers to how marketing communications
are used to inform potential buyers and other
stakeholders about an organisation and its products in
order to influence their attitudes and behaviours
towards the organisation and its products.

The main promotion job is to tell potential customers

that the right PRODUCT is available at the right
PLACE and at the right PRICE.

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Broader View of Promotion
•Advertising;

•Sales promotion;

•Personal selling;

•Public relations; and

•Direct marketing.

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Promotion Methods
•Different promotion methods have different
strengths and limitations.

•Integration of several methods is usually

adopted.

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Promotion Methods (con’t)

Target Market

Product Place Promotion Price

Personal
Mass selling Sales
selling promotion

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Mass Selling
•Communicating with huge numbers of potential buyers at
the same time.
•Cheap when big target market.
•Less flexible than personal selling.
•Example: Advertising and publicity.

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 Mass Selling (con’t)

Advertising Publicity

•Paid form.
•Unpaid form for media
•Non-personal
costs.
presentation.
•Non-personal presentation.
•TV, radio,
•Publicity people are paid.
newspapers,
•Example: Gets
magazines,
celebrities in
signs and
TV talk show.
the Internet.

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Personal Selling

•Face-to-face
communication.
•Flexible.
•Costly.

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Sales Promotion

•Promotion activities other than mass and

personal selling.
•Aim at end-users, middlemen and
organisation’s employees.
•Quick implementation and immediate results.

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 Advertising Personal Sales
VS VS
Selling Promotion

is not the is the

is higher
highest highest
spending
spending as spending
than
what many method.
advertising
people think. but not so
to sales
promotion.

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Promotion Objective
■ to encourage end-users to buy a specific product.

Reinforcing Changing
attitudes attitudes

To Buy

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Basic Promotion Objectives
A set of promotion objectives must clearly defined
the:
Who & Why to?

Persuade

Promotion
Objectives
Inform Remind

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 Informing

■ Product information is the basic thing for end-users

to know about the product before buying.

■ For a new product, it will be more effective to inform

and show the product directly to the end-users.

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Persuading

■ Product information is not enough if many similar

products are available.
■ Persuading end-users to buy is crucial now.
■ A set of favourable reasons should be developed to
convince end-users to choose the product.

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Reminding
■ Reminding is crucial if
target market already has
positive attitude towards
the product.
■ For example:

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Will it Blend?
■ Blendtec , a supplier of commercial blenders to
Starbucks and others, produced a video in which
the CEO blended unusual products such as a
garden rake and a golf club.
– The video, uploaded to YouTube, received 3.9
million views in an 8-month period.
– The Will It Blend? Campaign illustrates the
potential value of viral marketing and
connecting with consumers online.
■ Do you think that such campaigns can build
awareness?

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Integrated Marketing Communication (IMC)

 IMC is a cross-functional process for planning,

executing, and monitoring brand
communications.
 The goal is to profitably acquire, retain, and grow
customers.
 IMC strategy requires a thorough understanding
of target markets, the brand, its competition,
and other internal and external factors.

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MARKETING COMMUNICATION TOOLS

 MarCom consists of both planned and unplanned

messages between firms and customers and
among customers.
 E-marketers can enhance MarCom by using
innovative technologies, such as text and
multimedia messages, databases, blogs, digital
receiving devices, etc.
 Internet MarCom may include advertising, sales
promotion, marketing public relations (MPR),
direct marketing, and personal selling.

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IMC Goals and Strategies
■ The AIDA and “think, feel, do” (hierarchy of
effects) models help guide selection of online
and offline MarCom tools to meet their goals.
– The models recognize that consumers first
become aware of a product before they
develop feelings and purchase it.
■ The models can help marketers select
appropriate communication objectives and
strategies, such as:
– Build brand equity.
■ Brand equity is the intangible value of a brand, measured
in dollars.
– Elicit a direct response.

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Product Adoption Process

Awareness Interest Evaluation

Trial

Confirmation

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Product Decision

Awareness Interest Desire Action

Think Feel Do

Cognitive Attitude Behaviour

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E-Marketing Tactics

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Internet Advertising
■ Advertising is non-personal, usually
persuasive, communication about
products or ideas paid for by an
identified sponsor.
■ All paid space on a website or in an e-
mail is considered advertising.

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Trends in Internet Advertising
 Online advertising reached $23.5 billion in 2008,
$22.7 billion in 2009.
 In 2009, 14.3% of ad dollars were spent online.
 Most spending came from:
 Retail
 Financial services
 Automotive
 Telecom
 Computing

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Internet Advertising Formats
■ Keyword search is the fastest growing and most
important technique.
■ Display ads are the second largest.
– Display ads include traditional banners and
many additional sizes.
– Formats include rectangles, pop-ups, banners,
buttons, and skyscraper display ads.

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Advertising Dollars by Format

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Rich Media Ads
■ Rich media ads are interactive, at least offering click-through.
■ Rich media ads often use Flash animation to attract attention.
■ Many formats can be rich media, including:
– In Banner video ads.(Similar to a banner ad, except that instead of a
static or animated image, actual moving video clips are displayed without the
viewer having to open a video window. These can be delivered as automatic
streaming or be user-activated)
– Interstitial ads.(is also called “between-the-page,” this represents a full
page ad that appears before the requested page content or as the user clicks
between pages. Occasionally this type of ad can appear over a Web page as
well.)
– Floating ads.(An ad that moves across the user’s screen or floats above the
content. These can be animations, such as, the Energizer bunny hopping across
the page)
– Expanding ads.(These become larger, sometimes filling an entire Web
page. They can be automated or user-activated)
– Trick banner (A banner ad that looks like a dialog box with buttons. It
simulates an error message or an alert)
– Map ads.(Text or graphics linked from, and appearing in or over, a location on
an electronic map such as on Google Maps)

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Contextual Ads
■ Ad servers serve ads into web sites as appropriate users view pages.
– Facebook also offers specific ad targeting based on user profiles.
■ This process is also the basis for Google’s AdSense program.
– Contextual ads (keyword search) are the largest category of online
advertising.
■ Contextual advertising occurs when an ad system scans a
Web page for content and serves an appropriate ad, such
as an ad for tickets to a concert on a music site.
■ Google’s AdSense gives sites special JavaScript code to
put into their HTML site code so that relevant ads can be
sent into the page.
■ Microsoft adCenter and many others offer this service
and pay site owners when the ad appears on their sites.

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E-Mail Advertising
■ E-mail advertising is the least expensive
type of online advertising.
■ Advertisers can purchase space in
another firm’s e-mail content, such as
newsletters.
■ Note that email messages sent from a
firm directly to Internet users are direct
marketing, not advertising.

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Sponsorships
■ Sponsorships integrate editorial content
and advertising.
– Sponsorships allow great interactivity
and help firms build synergistic
partnerships that provide useful
content.
– Sponsor disclosure is an important
issue for e-marketers.

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Mobile Advertising
■ Mobile Internet usage grew about 25%
annually from 2007-2010.
■ Techniques for mobile devices include:
– Display ads
– Messaging
– Location-based ads
– Paid search
– Video
■ Advertising on mobile devices is likely
to increase.

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Mobile Advertising Venues by Goal

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Marketing Public Relations (MPR)
■ Public relations includes activities that
influence public opinion and create
goodwill.
■ MPR includes brand-related activities and
nonpaid, third-party media coverage to
positively influence target markets.
– A website can serve as an electronic
brochure.
– Online events can draw traffic to a
site.
– Users can download video podcasts.
– Viral marketing can create buzz online.

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Sales Promotion Offers
■ Sales promotions are short-term
incentives that facilitate the movement
of products to the end user.
– Coupons
– Rebates
– Samples
– Contests, sweepstakes, and games
■ 2010 usage estimates are 6%-75% of
Internet users.
■ Sales promotions do not help build
customer relationships in the long term.

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Direct Marketing
■ Direct marketing is direct communication
designed to generate a response.
■ Online techniques include:
– Outgoing e-mail.
– Targeted online ads that solicit a direct
response.
– Text messages or Short Message
Services (SMS).
– Multimedia and instant messages.

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E-Mail
■ E-mail, used by 89% of Internet users, is the Internet’s
killer application.
– 75% of marketers invest in e-mail campaigns.
■ E-mail has advantages over postal direct mail marketing.
– No postage or printing costs.
– Immediacy and convenience.
– E-mails can be automatically individualized.
■ E-mail also has disadvantages.
– Unsolicited e-mail (spam).
– Effective lists are hard to obtain and maintain.

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Metrics for Electronic and Postal Mail

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Permission Marketing: Opt-in, Opt-out
■ When consumers opt-in, they are giving
permission to receive commercial e-mail.
■ Marketers should obtain lists that are
guaranteed to be 100% opt-in.
■ Opt-in techniques are part of a bigger
marketing strategy called permission
marketing or “turning strangers into
customers.”

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Direct Marketing Metrics
■ Response rate and ROI are the most
appropriate metrics for direct marketing
campaigns.
■ E-mail receives a widely varied and
generally low click through rate, but the
highest ROI of any direct media.
■ In a study of SMS campaigns, 94% of
messages were read by recipients and
23% showed or forwarded messages to a
friend.

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Personal Selling
■ Personal selling involves real time
conversation between a salesperson and
customer, face-to-face, by telephone, or by
computer.
■ Some companies provide real time sales
assistance online.
– Land’s End has a live chat feature.
■ The Internet can also generate leads for
salespeople.

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IMC Metrics
■ Display ads are generally ineffective. Only
0.2% of all users click on them.
■ Online ads that were bigger or contained
rich media delivered greater impact.
■ There is increasing evidence that online
and offline advertising work well together.

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Best and Worst Performing IMC Tactics

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Promotion Over Product Life Cycle

• Product adoption curve is to combine with product

life cycle to achieve promotion objectives.

Market Market Market Sales

Introduction Growth Maturity Decline

Total industry sales

+ Total industry profit

$0
- Time

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Market Introduction Market Growth

Informing
Persuading
Primary demand
Selective demand
Personal selling
Mass selling
Salesperson and
channel members Salesperson and
channel members
Sales promotion

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Market Maturity Sales Decline

Persuading

Mass selling Decreased promotion

Sales promotion Targeted promotion

Personal selling Increased promotion

Advertising

Reminding

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 Promotion For Different Competitors

• Monopolistic competition prefers mass selling because they

have differentiated their marketing mixes.
• Oligopolistic competition, every organisation is trying to
convince potential customers by overtaking rival’s promotion
effort.
• Some organisations may adopt price-cutting promotion
method to increase the number of units sold.
 reduce sales revenue.
• Sales promotion may also help in number of units sold.
 reduce sales revenue.

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