Promotion  Reaches large,

Tools geographically dispersed

audiences, often with
 Advertising high frequency
 Low cost per exposure,
 Personal Selling though overall costs are
 Sales Promotion high
 Consumers perceive
 Public Relations advertised goods as more
 Direct Marketing legitimate
 Dramatizes
company/brand
 Builds brand image; may
stimulate short-term
sales
 Impersonal; one-way
communication

15 -
1
 Promotion  Most effective tool for
building buyers’
Tools
 Advertising
preferences, convictions,
and actions
 Personal interaction
 Personal allows for feedback and
adjustments
Selling  Relationship-oriented
 Sales Promotion  Buyers are more
attentive
 Public Relations  Sales force represents a
 Direct Marketing long-term commitment
 Most expensive of the
promotional tools

15 -
2
  May be targeted at the
Promotion trade or ultimate
consumer
 Tools
Advertising
 Makes use of a variety of
formats: premiums,
 Personal Selling coupons, contests, etc.
 Attracts attention, offers
Sales strong purchase
incentives, dramatizes
Promotion offers, boosts sagging
sales
 Public Relations  Stimulates quick
 Direct Marketing response
 Short-lived
 Not effective at building
long-term brand
preferences

15 -
3
 Promotion  Highly credible
 Many forms: news
Tools
 Advertising
stories, news features,
events and
 Personal Selling sponsorships, etc.
 Reaches many
 Sales prospects missed via
Promotion other forms of
promotion
 Public  Dramatizes company
Relations 
or benefits
Often the most
 Direct underused element in
Marketing the promotional mix

15 -
4
  Many forms:
Promotion Telephone marketing,
direct mail, online
Tools
 Advertising marketing, etc.
 Four distinctive
 Personal Selling characteristics:
 Sales › Nonpublic
Promotion › Immediate
 Public Relations › Customized
› Interactive
 Direct  Well-suited to highly
Marketing targeted marketing
efforts
( If IMC is referred)

15 -
5
 Promotion Mix Strategies
› Push strategy: trade promotions and
personal selling efforts push the
product through the distribution
channels.

› Pull strategy: producers use

advertising and consumer sales
promotions to generate strong
consumer demand for products.

15 -
6
 Checklist: Integrating the Promotion
Mix
› Analyze trends (internal and external)
› Audit communications spending
› Identify all points of contact
› Team up in communications planning
› Make all communication elements
compatible
› Create performance measures
› Appoint an IMC manager

15 -
7
 Advertising and Sales Promotion
› Avoid false and deceptive advertising

› Trade promotions can not favor certain

customers over others

› Use advertising to promote socially

responsible programs and actions

15 -
8
 Personal Selling
› Salespeople must follow the rules of
“fair competition”
› Three day cooling-off rule protects
ultimate consumers from high
pressure tactics
› Business-to-business selling
 Bribery, industrial espionage, and
making false and disparaging statements
about a competitor are forbidden

15 -
9
15 -
10
 Building good relations with the company’s
various publics by obtaining favorable
publicity, building up a good “corporate
image” and handling or heading off
unfavorable rumors, stories and events.
 Major functions are:
› Press Relations
› Product Publicity
› Public Affairs
› Lobbying
› Investor Relations
› Development
 Definition
“Public Relations in the management
function which evaluates public attitudes,
identifies the policies and procedures of an
individual or an organization to with the
public Definition cont.
interest, and executes a program of action
to earn public understanding and
acceptance.”
American Association of Advertising
Agencies
mpany’s Various Publics

ancial Publics: Banks, Investment ho

ernment Publics: Govt. Laws.
dia Publics: Newspapers, Magazines
zen-action Publics: Envt. Groups etc
al Publics: Neighborhood,
munity organizations .
eral Publics: Public Image of co.
ernal Publics: employees and others.
15 -
13
 The
The Role
Role of
of
Public
Public Relations
Relations

Executes
Executesprograms
programs
Evaluates
Evaluates public
public to
togain
gainpublic
public
attitudes
attitudes acceptance
acceptance
Identifies
Identifiesissues
issuesof
of
public
publicconcern
concern

Chap. 15 Marketing 7e
Lamb Hair McDaniel
14 ©2004 South-
Western/Thomson
 5

Press
Press Relations
Relations
Product
Product Publicity
Publicity
Corporate
Corporate Communication
Communication
Public
Public Affairs
Affairs
Lobbying
Lobbying
Employee
Employee and
and Investor
Investor Relations
Relations
Crisis
Crisis Management
Management
Chap. 15 Marketing 7e
Lamb Hair McDaniel
15 ©2004 South-
Western/Thomson
Major
Major Public
Public Relations
Relations Tools
Tools

Web
Web Site
Site
Public
Public
Service
Service News
News
Activities
Activities

Corporate
Corporate
Identity
Identity
Materials Speeches
Speeches
Materials

Audiovisual
Audiovisual Special
Special
Materials
Materials Events
Events
Written
Written
Materials
Materials
Click
Majorto
Major
Click to add
add title
Public
Public Relations
Relations Decisions
title Decisions

Setting
Setting Public
Public Relations
Relations Objectives
Objectives

Choosing
Choosing the
the Public
Public Relations
Relations Messages
Messages
and
and Vehicles
Vehicles

Implementing
Implementing the
the Public
Public Relations
Relations Plan
Plan

Evaluating
Evaluating Public
Public Relations
Relations Results
Results
 What is the biggest obstacle to
marketing communications program?
Take a position:
1. The biggest obstacle to effective promotion
mix is a lack of agency coordination
across communication units.
1. 2. The biggest obstacle to effective promotion
mix is a lack of understanding as to how to
optimally design and evaluate such
programs.
17-18
Pick a Brand and go to the Web site
Locate as many forms of
communication as you can find.
Conduct an informal communication
audit. What do you notice? How
consistent are the different
communications?

17-19
 School
Public
Relations
The surest way to
kill a bad
product is to
advertise it.
Mike Flynn, Darcy Advertising
Public Relations Not simply
publicity!!

School public relations is a solid, long-range

and democratic course of action. It is a process
that attempts to foster understanding and friendly
working relationships between schools and their
communities in order that they may not only serve
educational needs but also select more intelligently
the media and activities which will keep people
informed about the schools, their purposes
programs, progress, and problems.
Public Relations

Effective public relations is

a planned two-way program
in which educators and the
public work together to meet
the educational needs of
children.
Public Relations

There is a need for

Public Relations…..
Public Relations

…people must be informed if they

are to vote intelligently
…there is a predominant complaint
about schools by opposition that
they are neglecting the “three R’s”
…the media tends to focus only on
the negative
Public Relations

Public Relations
is an ongoing program…..
Public Relations

…public relations goes on actively at

all times whether the school likes it
or not
…every contact is a PR contact
…visitor’s perceptions are impacted
with every contact
Public Relations

What is the role of the

Principal in developing
good school
public relations?
 PublicRelations
Public Relations

The
Principal
…takes a leadership role
…refines and disseminates school news
…develops positive relationships with media
…establishes open lines of communication
with community
…formulates plans and policies
Public Relations

The principal understands “publics”

Public Relations

Each public has its own

personality, size, interest,
and organization
 PublicRelations
Public Relations

The Principal
understands the
dynamics of…

External public— that group that is

not in the building
or district
Parents
Clubs & community service organizations
Parent-teacher association
Businessmen
Adults who do not have children in school
Civic groups and leaders
 PublicRelations
Public Relations

The Principal
understands the
dynamics of…

Internal public— those groups within

the building or
Students district
Teachers
Support Staff
Other School Sites
Central Office
Public Relations

Principals must understand

interrelationships of various
publics, their unique structures,
collective personalities, interests,
and political importance
 PublicRelations
Public Relations

Factor
…warmth s
…acceptance
…tolerance
…understanding
…cooperative
…objective rather than emotional
Public Relations

The principal must develop a

climate conducive to good
working relationships with
publics and media
Creating a Public Relations Plan

Creating
a
PR Plan
Most public relations efforts
have as much impact on
school/district performance
as a rain dance has
on the weather
Creating a Public Relations Plan

Do
Dothese
thesesound
soundfamiliar?
familiar?

1. We notified everybody. We
sent a letter/memo out.
2. We tried some PR. We mailed
a press release Press kit.
3. Communication? Our newsletter
goes to over 50,000 people.
4. Publicity? Let’s do a public
service announcement.
5. Marketing: We’ve distributed
over one Kazillion brochures!
Effective marketing
is really applied
common sense

Nora K. Carr, St. Louis University

Creating a Public Relations Plan
Remember to……

RACE
Research
Analysis & Planning
Communication = RESULTS
Evaluation
Creating a Public Relations Plan

Research
 Questions to ask…
 What makes your school unique?
 How do people find out about your school?
 Do people perceive your school differently than you
perceive your school? Why?
 Why do parents/students choose your school,
programs? Why do they choose your competitor?
 What are the values, lifestyles, interests of your
customers? What to they do for a living? Educational
level? Are they happy? Disappointed?
 Who are you communicating with the most? Who
should you be communicating and relating with more?
 Who is critical to your success? Why? How close are
you to them?
Creating a Public Relations Plan

Analysis
&
Planning
Focus is the secret
ingredient in
virtually every
successful
marketing plan
Trout & Ries, Bottom-Up Marketing
Analyze data generated from
questions or other collection
instruments and develop a
plan
GOAL: To impact attitude, opinion,
behavior or action
FOCUS ON WHAT THE CUSTOMER
(Parents, Community etc.) VALUES
IMPLEMENT STRATEGY: Best way to reach,
move, influence target audience
Creating a Public Relations Plan

Determine your Strengths,

Weaknesses, Opportunities,
Threats
Keep it personal; focus on opinion leaders
Segment! Segment! Segment!
Expand involvement in your school through
advisory groups, sub-committees
Use community and district resources
Try something new! Explore ways to make new
technology more intimate
Use several channels to reach each
audience
 Public Relations Ideas
 Newsletters –often mailed to parents at PTA
expense
 News Tips Sheets –brief (who, what, when
where)
 Visit local newspaper offices – meet reporters
 Publicize teacher inservice – ex. Accelerated
Reader Program
 Courteous personal contacts
 Breakfast with parents
 Pre-registration counseling with students &
parents
 Public Relations Ideas
 Student recognition – award, bulletin
boards, newspapers, etc.
 Senior ID cards –free admission to events
 Adopt a student
 Open House –have students and parents
present
 Evening Meals –business and professional
leaders
 Parent conferences
 Public Relations Ideas
Open shop –possible one night per
week
Performing student groups
Computerized assignment system
Shadow a student
Outside marquee
Letters to parents –honor rolls
Publish Honor Rolls in newspapers
Good conduct awards
 Public Relations Ideas
Good news cards –hand out to parents at
evening meeting
Booster club meetings after ball games
Grandparent’s Day
Flowers to mothers on mother’s day
Awards assemblies
Citizenship and Good Deeds day
 Public Relations Ideas
 Announce student birthdays over
morning intercom
 School picnic –invite parents in for
special activities
 Students seen doing something good
 Mini-school for parents –entire day
follow the schedule of their children
 Senior citizen Thanksgiving dinner
 Senior citizen Pen-Pal club
 Public Relations Ideas
 Positive phone calls from teachers
 Career day
 School page in local newspaper
 School web page
 Give out school email addresses to parents
 Web-based grading and homework sites
 Parent-Advisory Committee
 Joining community organizations (Rotary club
etc.)
 Public Relations Ideas
 Speaking at community meetings
(Homeowner’s Association meetings)
 School renewal day
 School-based enterprises
 After-school day care
 Opening the building after hours for
community use (scout meetings,
computer lab use, library use)
Strategies that break the mold
grow initially like weeds.
They are not cultivated like
tomatoes in a hothouse

Henry Mintzberg, “The Rise and Fall of Strategic Plann

Plan
Creating a Public Relations Plan

Communication
 Hierarchy of Effective Communication

1. One-to-one, face to face

2. Small group discussion/meeting
3. Speaking before a medium-sized groups
4. Phone conversation
5. Hand-written, personal note
6. Typewritten, personal letter not generated by computer
7. Computer generated “personal” letter
8. Mass-produced, non-personalized letter
9. Brochure or pamphlet sent out as a “direct mail” piece
10. Article in organizational newsletter, magazine, posters, etc.
11. New carried in popular press
12. Advertising in newspapers, radio, TV, magazines, posters, etc.
13. Other less effective forms of communication (billboards,
skywriters, pens, “give-aways,” etc.)
It is the responsibility of an
effective public relations
plan to force
communication up the
ladder of effectiveness,
striving constantly to
narrow the audience to a
manageable size, and to
deliver the message on a
one-to-one basis

Fredrick Volkman, Washington Universit

Creating a Public Relations Plan

Evaluation
 Ask….
 Who are we reaching now?
 Using what tools/channels of communication?
 What should we be emphasizing more?
 What is the best way to reach our target
audience?
 What has been most effective in the past?
Why?
 What new avenues should we explore?
 What resources do we have?
 What free help can we get?
 Who can we collaborate with?
 Avoid
Not using data in making decisions
Not reporting information; or not
developing reports that encourage
other to use information
Misinformation
Forgetting to tell people how to use
the information you collect or
discover
Public Relations

Summary
 Public Relations
Essentials
 Effective PR & Marketing means building
relationships
 It is better to have many people involved in
your PR plan, understanding that efficiency
may suffer some, than to have one person do
everything perfectly
 If your PR & Marketing program isn’t tied to
your organization’s critical issues, you are
going about it the wrong way
 The best way to kill a bad product is to
advertise it
Public relations and sponsorship
 Public relations defined

The deliberate, planned and sustained

effort to institute and maintain mutual
understanding between an
organisation and its publics.

Institute of Public Relations (IPR)

 Publics defined

Figure 19.1
 PR - marketing and corporate

Marketing PR:
• Long-term strategic image building,
developing credibility, raising the
organisation’s profile, and enhancing
other marketing activities.

Corporate PR:
• Long-term relationship building
strategy with various publics.
 PR techniques

Figure 19.2
 Publicity versus advertising
Advantages of publicity over advertising:
• Credibility - advertising is paid for
whilst publicity is seen as free.
• Reach - PR can achieve an incredible
level of reach.
• Excitement - Publicity is about news
and can generate its own excitement.

Disadvantage of publicity over

External communication used for PR

• Advertising.
• Publications.
• Lobbying.
Internal communication used for PR

• House journals and newsletters.

• Briefings.
 Evaluating public relations

Figure 19.3
 Corporate reputation

Concerned with how people feel about a

company based in whatever
information (or misinformation) they
have on company activities,
workplace, past performances and
future prospects.

Fombrun, 2000
 Perceived corporate reputation:
stakeholders’

Figure 19.4
Source: based on ‘the value to be found in Corporate Reputation’ Financial Times 4th Dec., Fombrun
(2000).
 Five principles to corporate
reputation management
(Fombrun, 2000)

• Distinctiveness.
• Focus.
• Consistency.
• Identity.
• Transparency.
 Corporate identity

• The way an organisation chooses to

present itself.

• Reflects the character and philosophy

of the organisation.

• Emphasises those characteristics that

are positive.
 Changing corporate identity

Figure 19.5
 The change process

Figure 19.6
 Reasons for failure

Figure 19.7
 Sponsorship

A business relationship between a

provider of funds, resources or
services and an individual, event or
organisation which offers in return
some rights and association that may
be used for commercial advantage.
 Types of sponsorship

• Sport.
• Broadcast.
• Arts.
• Cause related.
 Role of sponsorship

• To support the broader PR strategy.

• Provide a venue for meeting key
customers/suppliers.
• Improve awareness and attitudes
towards company or individual brands.
• Support employee, government and
company relations.
• Support wider marketing objectives.
 Factors influencing sponsorship
choice

Figure 19.8
 Sponsorship evaluation methods

• Media exposure measurement.

• Assessing communication results.
• Measuring sale results.
• Feedback from particular groups.
Ambush Marketing

15 - 90
 What is Ambush
Marketing?
• Generally defined as:
• marketing and promotional activities
that:
– seek an association with a sponsored
event
• without the authorization or consent of the
organizer of the event or sponsor, and
• without paying the requisite fee
 ambush marketing?
• Goal:
– to misappropriate or capitalize on the goodwill and
popularity of the sponsored event
– intentionally confuse the public into thinking that the
ambush marketer is the official sponsor of the event
•to deflect some attention away from the competing
sponsors
•to reduce the effectiveness of their communication
while also undermining the value and the quality of the
sponsorship opportunity that was sold
 Ambush Marketing?
• The result:
– consumers may be confused as to who is the
official sponsor of the event
– ambush marketing may impact negatively on
sponsorship rights
• Therefore:
– sponsors seek some guarantee from the
organizer of the event that offenders will be
pursued (in the sponsorship agreement)
 Forms ambush
marketing
• Simultaneous promotions (for example:
sample/free product distribution at
sponsored event, billboard advertising or
flying blimp with advertiser’s mark over
venue)
• Purchase of sub-category rights (for
example: broadcast rights purchased
from a TV network from marketers who
are not official sponsors of the event for
the duration of the sponsored event)
 Laws: How did it work?

• No Olympic Pizza or Cake on sale

in Turin
• No fly zone over sports venues
• Bar Olympic (pub in central
location) had to cover the logo
• Same obligation for a sports
apparel and equipment shop
Special Teams
 How did it work?
Despite huge efforts some teams run afoul

Logo on the helmet, duly covered

Sales Promotion

15 - 98
 What
What is
is Sales
Sales Promotion?
Promotion?
• Mass communication technique that offers
short-term incentives to encourage purchase
or sales of a goods or service.
1) Consumer Promotion, 2)Trade Promotion
and 3)Sales force Promotion ( Three Target
groups)
• Rapid growth in the industry has been
achieved because:
– Product managers are facing more pressure
to increase their current sales,
– Companies face more competition,
– Advertising efficiency has declined,
– Consumers have become more deal
oriented.
 Consumer - Promotion Tools
Short-Term Incentives to Encourage Purchase
or Sales of a Product or Service.

Consumer- Consumer-
Promotion Promotion Tools
Entice Consumers to
Objectives
Entice
Try a
Consumers
New Product
to
Try a New Product
Samples
Samples
Advertising
Advertising
Specialties
Lure Specialties
LureCustomers
CustomersAway
Away Coupons
Coupons Patronage
Patronage
From
FromCompetitors’
Competitors’Products
Products Patronage
Rewards
Rewards
Rewards
Get
GetConsumers
Consumersto to“Load
“LoadUp’
Up’ Cash
CashRefunds
Refunds
on a Mature Product
on a Mature Product Contests
Contests
Hold
Hold&&Reward
Reward Loyal
Loyal Price
PricePacks
Packs
Customers Sweepstakes
Sweepstakes
Customers
Consumer
ConsumerRelationship
Relationship Premiums Games
Building Premiums Games
Building
Point-of-Purchase
Point-of-Purchase
Displays
Displays
 Trade
Trade -- Promotion
Promotion Tools
Tools
Short-Term Incentives That are Directed to
Retailers and Wholesalers.

Trade-Promotion Trade-Promotion
Objectives Tools
Persuade
PersuadeRetailers
Retailersor
or
Wholesalers to Carry a Brand Price-Offs
Price-Offs Premiums
Wholesalers to Carry a Brand Premiums
Give
GiveaaBrand
BrandShelf
ShelfSpace
Space Allowances
Allowances Patronage
Displays
Patronage
Rewards
Rewards
Promote
PromoteaaBrand
Brandin
in Buy-Back
Advertising Buy-Back Discounts
Advertising Guarantees Discounts
Guarantees
Push
PushaaBrand
Brandto
toConsumers
Consumers Push
PushMoney
Money
Free
FreeGoods
Goods
Specialty
Specialty
Contests Advertising
Advertising
Contests Items
Items
Business
Business -- Promotion
Promotion Tools
Tools
Short-Term Incentives That are Directed to
Industrial Customers.

Business- Business-
Promotion Promotion Tools
Objectives
Generate
Generate Business
BusinessLeads
Leads Conventions
Conventions

Stimulate
StimulatePurchases
Purchases Trade
TradeShows
Shows

Reward
RewardCustomers
Customers Sales
SalesContests
Contests
Motivate
MotivateSalespeople
Salespeople
Sales-force Promotion
:

Bonuses, Contest and

Rallies .
“ Best salesman of the Year
Award” “ Trip to Europe or US
for best performers”.

15 - 103
Developing
Developing the
the Sales
Sales Promotion
Promotion
Program
Program

Decide
Decide on
on the
the Size
Size of
of the
the Incentive
Incentive

Set
Set Conditions
Conditions for
for Participation
Participation
Determine
Determine How
How to
to Promote
Promote and
and
Distribute
Distribute the
the Promotion
Promotion Program
Program
Determine
Determine the
the Length
Length of
of the
the Program
Program

Evaluate
Evaluate the
the Program
Program
 Sales Promotions

Sales promotion spurs action

and must complement
advertising
 Sales Promotion
“A direct
“A direct inducement
inducement that that offers
offers an
an extra
extra
value or
value or incentive
incentive for
for the
the product
product toto the
the
sales force,
sales force, distributors,
distributors, or
or the
the ultimate
ultimate
consumer with
consumer with the
the primary
primary objective
objective of of
creating
creating an immediate
an
 An extra immediate
incentive sale.”
sale.”
to buy
 An acceleration tool
 Targeted to different parties
 An inducement to intermediaries
Reasons for Increase in Sales
Promotion
 Growing Power of Retailers
 Declining Brand Loyalty
 Increased Promotional Sensitivity
 Brand Proliferation
 Fragmentation of Consumer Markets
 Short-Term Focus
 Increased Accountability
 Competition
 Clutter
 Sales Promotion Uses
 Introduce new products by encouraging trial and
repurchase
 Get existing customers to buy more
 Attract new customers
 Defend current customers
 Maintain sales in off season
 Target a specific market segment
 Enhance IMC efforts and build brand equity (brand
can cheapen if SP is not designed to reinforce
the brand positioning)
If advertising spends are reduced to increase Sales
Promotions it can erode brand franchise and
image– (commodity / parity product image)
Sales Promotion Vehicles
Consumer-Oriented Trade-Oriented

Samples Contests, dealer incentives

Coupons Trade allowances

Premiums Point-of-purchase displays

Contests/sweepstakes Training programs

Refunds/rebates Trade shows

Bonus packs Cooperative advertising

Price-off deals

Frequency programs

Event marketing
 Objectives of Consumer-
Oriented Sales Promotion
 To Obtain Trial and Repurchase
 To Increase Consumption of an
Established Brand
 To Defend (Maintain) Current
Customers
 To Target a Specific Segment
 Enhance IMC programs and build
brand equity
Advantages and Limitations of
Coupons
Advantages: Disadvantages
• Appeal to price • Difficult to determine
sensitive consumer how many consumers
• Can offer price break will use coupons and
without retailers coop when
• Can be effective way • Coupons are often used
by loyal consumers who
to induce trial of new of may purchase anyway
existing products
• Declining redemption
• Can be a way to defend
rates and high costs of
market share and couponing
encourage repurchase • Misredemption and
fraud
 Distribution of Coupons
Through ads, DM / press / on-pack and also by the scanner to
competitive brand users
Coupon ads should -
– Reinforce the positioning - highlight brand strength and key benefits
emphasised in the ad
– Be convenient to clip, show package prominently and have the
mandatory legal copy
• Placed in /on pack to build repeat purchase & loyalty
• Placed on other products ‘Cross-ruff’ to attract new
customers
• DM coupons are more targeted, have higher redemption
• Scanner dispensed coupons attract other brand users
• Cash rebates (on durables) – on proof of purchase
 Coupon Fraud
 Consumers redeem without
purchase
 Clerks and staff exchange for
cash
 Managers/owners redeem
without sale
 Criminals collect or counterfeit
and sell
 Coupon Trends
 Major companies cutting back on
use of coupons
 Searching for more effective
coupon techniques
 More use of internet for
distribution
 Sampling
Providing consumer with some
quantity of a product for no charge
to induce trial
Sampling works best when:
 The products are of relatively low unit value, so
samples don’t cost much
 The purchase cycle is relatively short so the
consumer can purchase in a relatively short time
period
 The products are divisible and can be broken
into small sizes that can reflect the products
features and benefits
 There is enough quantity for the consumer to
try a product, (but keep packaging & mailing
expenses down)
 Sampling Methods
 Door-to-door
 Direct mail
 In-store sampling
 Cross-product sampling
 With newspaper or magazine
 Through the internet
Sampling is more effective after an introductory
set of ads giving a toll free number to call for
samples
 Premiums
Premium – an offer of an item of
merchandise
or service either free or at a low
cost that
• Two types of premiums: (in pack / mailed on
isproof
an extra incentive
of purchase for customers
at no cost)
 Free premiums -
only require purchase of the product
 Self-liquidating premiums -
require consumer to pay some or all of the cost of the
premium
• Reinforces brand image
• Builds repeat purchase / brand loyalty
 Contests and Sweepstakes

Contest – a promotion where

consumers compete for prizes or
money on the basis of skills or
ability. Winners are determined by
judging entries or ascertaining which
Sweepstakes/games – a promotion
entry comes closes to some
where winners are determined purely by
predetermined criteria
chance and cannot require a proof of
purchase as a condition for entry.
Winners are determined
orceby
brand’s
randomadvertising
selection platform
from the if appropriate
pool of
entries or generation
Other Popular Consumer Sales
Promotion Tools
• Price packs – offer lower price than usual or
greater quantity than usual
 Bonus Packs – For value enhancing items – ‘more
quantity’ packs are better than price-offs
promotions
 Price-off deals - Induces switching and reinforces
loyalty
 Refunds and Rebates
 Event marketing
 Frequency/loyalty programs
 Subsidised financing / Reduced EMI
– incentive for durables
 Consumer Franchise-Building
(CFB) Promotions
Consumer Franchise Building
Promotions – Communicate distinctive
brand attributes and contribute to the
development
CFB Promotional and reinforcement of
Objectives
brand identitydistinctive
 Communicate and image brand attributes
 Develop and reinforce brand identity that is
consistent with the image of the brand
 Build long-term brand preference
 Encourage repeat purchase and long-term
patronage
 Engage active consumer involvement
 Nonfranchise-Building (non-FB)
Promotions
Nonfranchise-building promotions -
Accelerate the purchase decision
process and generate an immediate
sales increase but do not contribute to
Non-FB
the Promotions
building of May
brand Include
identify and image
Price-off deals
 Bonus packs
 Rebates or refunds
Non-FB Promotions shortcomings
 Trade promotions benefits may not reach customers
 Customers may “buy on the basis of price rather than
brand equity
 Do not encourage the development of brand loyalty
Trade-Oriented Sales Promotion
Objectives
 Obtain Distribution of New Products
 Maintain Trade Support for Existing Products
 Encourage Retailers to Display and Promote Existing
Brand
 Build Retail Inventories
• Stock and buy more stocks
• Move goods from warehouse to shelf

Can erode brand franchise & image if advertising spends

are reduced – (commodity / parity product image) or is
not brand enhancing
Types of Trade-Oriented
Promotions
 Contests and Incentives
 Trade Allowances
• Buying Allowances
• Promotional Allowances
• Slotting Allowances
 Point-of-Purchase Displays
 Sales Training Programs
 Trade Shows
 Cooperative Advertising
 Trade Allowances
• Off-invoice / buying allowance
• Count-recount allowances
• Billback allowances
• Display allowances in-ad grocer coupon
• Slotting and facing allowances
• Trade inventory financing and delayed
billing
• Sweepstakes, contests, etc for retail sales
people
 Trade Allowances
• Off-invoice or buying allowance - % price-cut
applied to volumes purchased during promotional
period. (Free goods may be offered instead)
– Applies ‘Push’ pressure to sell stocks picked-up
• Count-recount allowances – for shifting the
stocks from the warehouse to the shelf
– Pressure to pass the price cut to the consumer
• Billback allowances – allowance paid if certain
performance criteria is met
– For Displays Ads in retailer publications etc
• Display allowances - to display products
prominently
– Time pressed customers pick up brands made salient
this way
 Trade Allowances

• In-ad grocer coupon - in the retailer’s

circular. Co pays for coupon face-value &
handling costs
• Slotting & facing allowances – one time fee
paid to place new brand on shelf – to cover cost
of space, admn. & risk
• Trade inventory financing & delayed
billing - used for durables – reduced rate
financing / delayed billing
• Sweepstakes, contests – for retail sales
people. Timed to run along with sales promos
 Problems with Trade
Allowances
Marketers expect that the savings will be passed on
to the consumer in the form of lower prices.
However, the trade members often pocket
discounts
• Two practices that are particularly bothersome
– forward buying
– and diverting
• To deal with these trade problems, companies
have adopted a policy of
– Everyday Low Pricing (EDLP) the list price is lowered
and trade promotional allowances are reduced /
eliminated
Promotion Targeted to Reseller
Salespeople
Product or program sales
 Selling a specific number of cases
 Selling a specific number of units
 Selling a specific number of promotional programs
New account placements
 Number of new accounts opened
 Number of new accounts ordering a minimum amount
 Promotional programs placed in new accounts
Merchandising efforts
 Establishing promotional programs
 Placing display racks, counter and other p-o-p displays
 Types of Cooperative
Advertising
 Horizontal cooperate advertising

 Ingredient-sponsored cooperative
advertising

 Vertical cooperative advertising

 Retailer’s promotion’s

Consumer Promotions used by

retailers to –
– clear inventory – out of style, slow
moving, shelf-unstable products
 Consumer Franchise-Building
(CFB) Promotions
Consumer Franchise Building
Promotions – Communicate distinctive
brand attributes and contribute to the
development
CFB Promotional and reinforcement of
Objectives
brand identitydistinctive
 Communicate and image brand attributes
 Develop and reinforce brand identity that is
consistent with the image of the brand
 Build long-term brand preference
 Encourage repeat purchase and long-term
patronage
 Engage active consumer involvement
 Nonfranchise-Building(non-FB)
Promotions
Nonfranchise-building promotions -
Accelerate the purchase decision
process and generate an immediate
sales increase but do not contribute to
theNon-FB Promotions
building of brand May Include
identify and image
 Price-off deals
 Bonus packs
 Rebates or refunds
Non-FB Promotions shortcomings
 Trade promotions benefits may not reach
customers
 Customers may “buy on the basis of price rather
than brand equity
 Do not encourage the development of brand
loyalty
 The Sales Promotion
Dilemma
Our Firm
Cut Back Maintain
Promotions Promotions

Same market
Maintain We lose
share, profits
Promotions market share
stay low
All Others

Cut Back Higher profits We gain in

Promotions for everyone market share
 Evaluation and Risks
Consumer Promotions
• Advtg and SP play a complementary role
and when run in tandem they yield
powerful synergies
– Delivers additional brand value and
– Induces trial & repeat purchase
– Breaks through clutter
• SP can hurt the image of the brand equity
– if run in isolation of advertising
– if poorly designed
– if protracted - particularly true for highly
involvement, image & feeling products
 Evaluation-Risks
Trade Promotions
– Advtg. Campaign, Consumer SP and TP
if run in tandem yield powerful
synergies

– TP erode brand franchise and image

leading to less leverage with the trade
• Because of less ad spend
• If promos are not brand enhancing
 Coordinating Sales Promotion
With Other IMC Elements
Various IMC elements such as
advertising, direct marketing, Internet
and personal selling efforts need to be
coordinated with sales promotion to
 Budget allocation - It depends on
create a synergistic effect. Must
– the promotional objectives of the campaign
consider: – the market and competitive situation
– the brand’s stage in its life cycle
 Media support and timing
 Coordination of ad and promotion themes
 Measuring effectiveness
Direct Marketing
 Direct Marketing

• Direct marketing consists of direct

connections with carefully targeted
individual consumers to both obtain an
immediate response and cultivate
lasting customer relationships.

13-140
 The New Direct-Marketing Model

• Some firms use direct marketing as a

supplemental medium.
• For many companies, direct
marketing constitutes a new and
complete model for doing business.
• Some firms employ the direct model
as their only approach.
• Some see this as the new marketing
model of the next millennium.
13-141
Benefits of Direct Marketing
• Benefits to Buyers:
– Convenient
– Easy to use
– Private
– Ready access to products
and information
– Immediate and interactive
 Benefits of Direct Marketing
• Benefits to Sellers:
– Powerful tool for building customer
relationships
– Can target small groups or
individuals
– Can tailor offers to individual needs
– Can be timed to reach prospects at
just the right moment
– Gives access to buyers they could
not reach through other channels
– Offers a low-cost, efficient way to
reach markets
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 Customer Databases
• An organized collection of comprehensive data
about individual customers or prospects, including
geographic, demographic, psychographic, and
behavioral data.
• Databases can be used to identify prospects, tailor
products, and maintain customer relationships
• Database marketing requires substantial
investment in hardware, software, personnel

13-144
 Forms of Direct Marketing

13-145
 Direct-Mail Marketing
• Involves sending an offer,
announcement, reminder, or other
item to a person at a particular
address.
• Accounts for a high proportion of
direct-marketing sales.
• Permits high target-market selectivity.
• Personal and flexible.
• Easy to measure results.

13-146
 Catalog Marketing
• With the Internet, more and more
catalogs going electronic.
• Print catalogs still the primary
medium.
• Harder to attract new customers with
Internet catalogs.

13-147
 Direct-Response TV Marketing

Direct-Response Advertising

Infomercials

Home Shopping Channels

13-148
 Integrated Direct-Marketing

The use of carefully

coordinated multiple-media,
multiple-stage campaigns.

13-149
 Public Policy and Ethical Issues in
Direct Marketing

Irritation to Consumers

Taking unfair advantage of impulsive

or less sophisticated buyers

Targeting TV-addicted shoppers

Deception, Fraud

Invasion of Privacy
13-150
Direct Marketing

End

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