MARKETING
17e
Hult • Pride • Ferrell
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Part 6
Promotion
Decisions
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16: Integrated Marketing
Communications
17: Advertising and Public
Relations
18: Personal Selling and Sales
Promotion
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17-2
Objectives
 To describe the nature of integrated marketing
communications
 To examine the process of communication
 To understand the role and objectives of promotion
 To explore the elements of the promotion mix
 To examine the selection of promotion mix
elements
 To understand word-of-mouth communication and
how it affects promotion
 To understand product placement promotions
 To examine criticisms and defenses of promotion
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17-3
Integrated Marketing
Communications
Coordination of promotion and other marketing
efforts for maximum informational and
persuasive impact
 Fosters long-term relationships and efficient
use of promotional resources
 Coordinating multiple marketing tools to
produce this synergistic effect requires a
marketer to employ a broad perspective
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17-4
Integrated Marketing
Communications
 Integrated marketing communication is
increasingly accepted
 Consistent message to customers
 Coordinate/manage promotional efforts
 Synchronization of promotional elements
 Use more precisely targeted promotional
tools
 Use of database marketing
 Protect consumer privacy
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17-5
Promotion and the
Communication Process
 Communications – A sharing of meaning
through the transmission of information
 Source – A person, group, or organization with
a meaning it tries to share with a receiver or an
audience
 Receiver – The individual, group, or
organization that decodes a coded message
 Coding Process (Encoding) – Converting
meaning into a series of signs or symbols
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17-6
The Communication Process
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17-7
Decoding the Message
 Communication Channel – The medium of
transmission that carries coded message from
the source to the receiver
 Decoding Process – Converting signs or
symbols into concepts and ideas
 Noise – Anything that reduces a
communication’s clarity and accuracy
 Feedback – The receiver’s response to a
decoded message
 Channel Capacity – The limit on the volume
of information a communication channel can
handle effectively
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17-8
Sources of News Information
for Americans
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17-9
Discussion Point
 Follow the hyperlink to access a list of crosscultural marketing mistakes
? What are the problems with these messages?
? How did noise interfere with the reception of
the message?
? What could these companies have done
differently to avoid costly and embarrassing
communications mistakes?
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Promotion
Communication to build and maintain favorable
relationships by informing and persuading one
or more audiences to view an organization
positively and to accept its products
 Promotion’s goal is to stimulate product
demand and build customer relationships
 Most organizations expend a large amount
of resources on promotion
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17-11
Discussion Point
Role and Objectives
of Promotion
? What are the
promotional
objectives behind
this Ethos Water
advertisement?
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15-12
Information Flows Are Important in
Integrated Marketing Communications
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17-13
Possible Objectives of
Promotion
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17-14
Create Awareness
 Awareness is crucial to initiating the product
adoption process for new products
 For existing products, promotional efforts
create increased awareness of
 Brands
 Product features
 Image-related issues
 Operational characteristics
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17-15
Stimulate Demand
Primary Demand
 Demand for a product category rather than a
specific brand
Pioneer Promotion
 A way to stimulate primary demand
 Promotion that informs consumers about a
new product
Selective Demand
 Demand for a specific brand
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17-16
Discussion Point
Stimulate Demand
? What method(s)
does Red Mango
utilize to stimulate
demand in this
advertisement?
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15-17
Encourage Product Trial
 If customers stall in the evaluation stage,
marketers can use methods to encourage
product trial in order to move them to product
adoption
 Trial Techniques:
 Free samples
 Coupons
 Test drives
 Limited free-use offers
 Contests
 Games
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17-18
Identify Prospects
 Certain types of promotional efforts aim to
identify customers who are interested in the
firm’s product and are likely potential buyers
 Techniques Include:
 Television advertisement encouraging the
viewer to visit the company’s website to
share information and receive something of
value
 Company should respond with phone
calls, e-mail, or personal contact by
salesperson
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17-19
Retain Loyal Customers
 The primary goal of marketing is to maintain
long-term customer relationships
 Keeping current customers is less costly
than acquiring new customers
 Retention techniques include:
 Frequent-user programs
 Special offers for existing customers
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17-20
Customer Retention
 Listening to the customer
 Loyalty programs to reward most-valued
customers
 e-Communications – e-newsletters, e-cards, or
e-alerts
 Interactive promotions – Sweepstakes and
contests
 Events – Seminars, workshops, etc.
 Client appreciation programs – Invitations to
special events, etc.
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17-21
Facilitate Reseller Support
 Strong relationships with resellers are
important to an organization’s ability to
maintain a sustainable competitive advantage
 Various promotional methods help achieve this
goal
 Resellers view promotion as form of
support
 Share promotional expense
 Special offers/buying allowances
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17-22
Combat Competitive
Promotional Efforts
 Promotional activities may aim to offset or
lessen the effect of a competitor’s promotional
and marketing activities
 This type of promotional activity does not
necessarily increase sales or market share
 A combative promotional objective is used
most often by firms in highly competitive
consumer markets
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17-23
Reduce Sales Fluctuations
 A business cannot operate at peak efficiency
when sales fluctuate widely
 Holidays
 Seasonal products
 Promotional activities are often designed to
stimulate sales during slumps
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17-24
The Four Possible Elements of
a Promotional Mix
Promotion mix: A combination of promotional
methods used to promote a specific product
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17-25
Advertising
 A paid nonpersonal communication about an
organization and its products transmitted to a
target audience through mass media
 Advertising is changing as mass media
consumption habits are changing
 The Internet and digital media aim at
smaller, more targeted audiences
 Advertising is highly flexible and can reach
large or small audiences depending on need
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17-26
Advantages and Disadvantages
of Advertising
 Advantages:
 Cost-efficient when it reaches a vast number of
people at a low cost per person
 It lets the source repeat the message several times
 Visibility gained from advertising can enhance a
firm’s image
 Disadvantages:
 Absolute dollar outlay is high
 Rarely provides rapid feedback
 Difficult to measure its effect on sales
 Less persuasive than personal selling
 Generally limited time exposure
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17-27
Personal Selling
A paid personal communication that seeks to
inform customers and persuade them to
purchase products in an exchange situation
 Advantages
• Is a more specific form of advertising
• Has greater impact on consumers
• Provides immediate feedback
 Limitations
• Is expensive
• Is labor intensive and time consuming
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17-28
Types of Interpersonal
Communication
Kinesic Communication
 Body language; communicating through the
movement of head, eyes, arms, hands, legs,
or torso
Proxemic Communication
 Communicating by varying the physical
distance between two parties in face-to-face
interactions
Tactile Communication
 Communication through touching
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17-29
Public Relations
A broad set of communication efforts used to
create/maintain favorable relationships between
organization and stakeholders
 Publicity is a non-personal communication in a
news-story form about an organization, its
products, or both
 Is transmitted through a mass medium at
no charge
 Public relations should be viewed as an
ongoing program during crises and good times
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17-30
Public Relations Tools






Publicity
Annual reports
Brochures
Event sponsorships
Sponsorship of socially responsible programs
Press releases/Conferences/Feature articles
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17-31
Sales Promotion
 Activities or materials that act as a direct
inducement, offering added value or incentive
for the product to resellers, salespeople, or
customers







Free samples
Games
Rebates
Sweepstakes
Contests
Premiums
Coupons
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17-32
Discussion Point
Sales Promotion
? What type of sales
promotion is
McDonald’s using in
this advertisement?
? What is the goal for
this type of
promotion?
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15-33
Top Coupon Categories
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17-34
Selecting Promotion Mix
Elements
Resources,
Objectives,
Policies
Push and Pull
Channel
Policies
Characteristics
of the Target
Market
Promotional
Mix
Cost and
Availability of
Promotional
Methods
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Characteristics
of the Product
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17-35
Promotional Resources,
Objectives, and Policies
 The size of an organization’s promotional
budget affects the number and intensity of
promotional methods used
 A company’s objectives and policies influence
the types of promotions used
 Different objectives will require different
promotional mixes
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17-36
Characteristics of the
Target Market
Crucial Elements of the Target Market:
 Size
 Often drives what promotional elements are chosen
 Small target markets often rely on personal selling
 Geographic distribution
 Dispersed customers often rely more heavily on
advertising
 Demographic characteristics
 Age, income, education, etc. will affect consumers’
media consumption patterns and are important
considerations when developing the promotion mix
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17-37
Characteristics of the Product
 Business products concentrate on:
 Personal selling
 Sales promotion
 Consumer products concentrate on:
 Convenience goods = advertising
 Durables and expensive products = personal
selling
 Both = public relations
 Product price is an important factor
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17-38
Stage of the Product Life Cycle
The stage of a product’s life cycle affects
decisions regarding the promotion mix
 Introduction
 Advertising plus personal selling and sales
promotion to generate awareness
 Growth/Maturity
 Consumer goods = advertising
 Business advertising = personal selling and
sales promotion
 Decline
 Reduction of all promotional activities
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17-39
Distribution Intensity of the
Product
 Intensive Distribution
 Advertising, sales promotion
 Selective Distribution
 Promotion mixes vary
 Exclusive Distribution
 Personal selling
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17-40
Costs and Availability of
Promotional Methods
National Advertising / Sales Promotion
 Have higher expense but low cost per
individual
International Promotion
 Can be difficult because of lack of promotional
channels
Personal selling
 Is dependent on recruiting and hiring qualified
sales people
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17-41
Push and Pull Channel Policies
Push Policy
 Promoting a product only to the next institution
down the marketing channel
Pull Policy
 Promoting a product directly to consumers to
develop strong consumer demand that pulls
products through the marketing channel
 Organizations may use both push and pull
policies at the same time
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17-42
Comparison of Push and Pull
Promotional Strategies
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17-43
Growing Importance of Wordof-Mouth Communications
Word-of-Mouth (WOM) Communication
 Personal, informal exchanges of
communication that customers share with one
another about products, brands, and
companies
 Most customers are likely to be influenced by
friends and family members when making
purchases
 Effective WOM relies on marketers identifying
opinion leaders
 Electronic WOM is becoming increasingly
important
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17-44
Growing Importance of Wordof-Mouth Communications
Buzz Marketing
 An attempt to incite publicity and public
excitement surrounding a product though a
creative event
Viral Marketing
 A strategy to get consumers to share a
marketer’s message, often through email or
online video, in a way that spreads
dramatically and quickly
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Discussion Point
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17-46
Product Placement
A form of advertising that strategically locates
products or product promotions within
entertainment media to reach the product’s target
market
 In-program product placements have become
a successful method of reaching consumers,
rather than relying on commercial breaks
 Has become more important as more
consumers bypass advertisements through
digital video recorders, TiVo, and the Internet
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17-47
Criticisms and Defenses of
Promotion
Is promotion deceptive?
 Some are, but not all promotion should be
condemned
 Laws, government regulation, and industry
self-regulation have helped decrease
deceptive promotion
Does promotion increase prices?
 If promotion is working to stimulate demand,
producing and marketing larger quantities can
actually help reduce prices
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17-48
Criticisms and Defenses of
Promotion
Does promotion create needs?
 Marketing does not create needs, but makes
consumers aware of needs they already have
Does promotion encourage materialism?
 Marketers assert that values are instilled at
home and promotion does not change people
into materialistic consumers
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17-49
Criticisms and Defenses of
Promotion
Does promotion help customers without
costing too much?
 Promotions inform customers about a
product’s uses, features, advantages, prices,
or purchase locations
Should potentially harmful products be
promoted?
 Defenders argue that, as long as it is legal to
sell a product, promoting it should also be
allowed
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