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CHAPTER
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Using Effective
Promotional
Techniques
16
Nickels
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McGraw-Hill/Irwin
Understanding Business, 8e
McHugh
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McHugh
1-1
16-1
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
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Traditional Promotional Mix
Advertising
Personal
Selling
Product
Public
Relations
Sales
Promotion
16-2
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Steps In A
Promotional Campaign
1. Identify the target market
2. Define the objectives
3. Determine the promotional budget
4. Develop a unifying message
5. Implement the plan
6. Evaluate effectiveness
16-3
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Objectives of
Integrated Marketing
•
•
•
•
•
Build Brand Equity
Provide Information
Manage Demand & Build Sales
Differentiate Products
Influence Perceptions, Attitudes, &
Buyer Behavior
16-4
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Advertising
• Advertising media: Newspaper,
television, radio, magazines,
outdoor, direct mail, yellow-pages,
Internet
• The growing use of Infomercials
• Moving to the Internet
• Global advertising
16-5
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Century’s
Top Ad Jingles
• “You deserve a
• “I wish I were an Oscar
break today”
Mayer wiener”
• “Be all you can be” • “A little dab’ll do ya”
• “Pepsi-Cola hits the • “Double your pleasure,
spot”
double your fun”
• “Mm Mm good!”
• “It’s the real thing”
• “See the USA in
your Chevrolet”
• “Winston tastes good
like a cigarette should”
Source: Advertising Age
16-6
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Do Blatantly Sexy
Ads Turn You Off?
Percent
Men
80
70
60
50
40
30
20
10
0
Women
72
51
45
4
24
Strongly/Somewhat
Agree
Strongly/Somewhat
Disagree
4
Don't Know
Source: USA Today
16-7
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Total Direct
Advertising Expenditures
300
263.7
231.4
250
200
150
271
142.1
153
1996
1997
164.1
100
50
0
Source: The Direct Marketing Association, Advertising Age (accessed August 10, 2006)
1998
2002
2004
2005
16-8
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Money Spent to
Place Products
$4.5
$4.0
$3.5
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
$4.1
$3.4
$2.5
$2.0
$2.1
In Billions
2001
2002
2003
2004
2005
Source: PQ Media
16-9
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Total Advertising
Expenditures By Media
Network TV
$18,036
Magazine
$9,527
Cable TV network
$8,912
Local Newspaper
$6,499
Spot TV
$5,328
Internet
$2,652
Syndicated TV
$2,623
$0
Source: Advertising Age, 2005
$5,000
Expenditures of 100 Leading
National Advertisers
$10,000
$15,000
$20,000
16-10
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Ad Spending Growth
Outdoor
Cable TV Network
Internet
Sunday Magazine
Local Magazine
0.0%
Source: Advertising Age, 2005
9.8%
11.0%
13.3%
13.7%
25.2%
5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
16-11
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Infomercials Grossing
Over 1 Billion
Ron Popeil's
Rotisserie & BBQ
In Billions
George Foreman Grill
Soloflex
Total Gym
Bowflex
Proactiv
0
Source: Business 2.0, June 2005
0.5
1
1.5
2
2.5
16-12
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U.S. Online
Ad Spending
9
8
7
6
5
4
3
2
1
0
1998
1999
Source: Investors.com; Advertising Age, 2005
2000
2001
2002
2003
2004
2005
16-13
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Steps in the
Selling Process (B2C)
Follow up
Close sale
Make presentation
Start
Ask questions
Approach
16-14
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Steps in the Selling
Process (B2B)
1.
2.
3.
4.
5.
6.
7.
Prospect and Qualify
Preapproach
Approach
Make Presentation
Answer Objections
Close Sale
Follow Up
16-15
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Public Relations
Steps
Publicity
•
Listen to the public.
• Free
•
Change policies and
procedures.
• More Effective Than
Advertising
•
Inform people that
you’re being
responsive to their
needs.
• Believable
• No Control
• No Repetition
16-16
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Sales Promotion Techniques
B2B
B2C
•
•
•
•
•
•
•
•
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Trade Shows
Portfolios
Deals
Catalogs
Conventions
Coupons
Cents-off Promotions
Sampling
Premiums
Sweepstakes
Contests
Bonuses
Catalogs
Demonstrations
Special Events
Lotteries
In-store Displays
16-17
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Tips on
Issuing Coupons
• Coupons can be used as a “Thank you for
buying” or a “Stop and try us.”
• The value must be enough to attract
customers.
• Use coupon promotions sparingly.
• Get professional help to get maximum
exposure.
• Color-code your coupons for different
groups that use them.
16-18
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Coupon Statistics
Average Face Value
• 93 cents (2004); 46 cents (1990)
Amount saved in 2004
• $2.9 billion
Number of coupons redeemed in America
in 2004
• 3 billion
Coupons rank 2nd as purchase motivators
(Largest: Free Samples)
Source: St. Louis Post-Dispatch Everyday, July 2005
16-19
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Sales Promotion
• Internal & External
• Sampling
• Word-Of-Mouth
• Viral Marketing/Swag
• Blogging
• Podcasting
16-20
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Putting it all Together
• Convince wholesalers and
retailers to stock and sell
• Producer uses advertising,
personal selling, sales
promotion to convince the
intermediaries
• Idea is to push the product
through the distribution
system to the stores
• Heavy advertisements and
sales promotion efforts
• Directed at consumers so
that they will request the
products from retailers
• Products are pulled down
through the distribution
system
16-21