Chapter 12
The Promotional Program
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–1
What is a promotion?
• Promotion is the element in an organisation’s
marketing mix that serves to inform, persuade and
remind the market about the organisation and/or its
products.
• Promotion is an attempt to influence; whether a
particular promotional activity is designed to inform,
persuade or remind, the ultimate objective is to
influence the recipient’s feelings, beliefs or
behaviour.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–2
The promotional mix
• Personal selling—the presentation of a product to a
prospective customer by a firm’s sales executive.
• Advertising—paid, non-personal mass
communication, in which the sponsor is clearly
identified.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–3
The promotional mix
• Sales promotion—demand-stimulating activity
designed to supplement advertising and coordinate personal selling.
• Publicity—a non-paid form of advertising that
uses mass communication to stimulate
demand.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–4
The promotional mix
• Public relations—a planned communication
effort by an organisation to contribute to
generally favourable attitudes and opinions
toward an organisation and its products.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–5
The communication process
Insert Fig 12.1 page 378
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–6
Promotion
• Marketers use promotional activities to differentiate
their products from those of competitors, and
induce the consumer’s purchase decision by
introducing new information.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–7
The roles of promotion
• Informing
• The most useful product will be a failure if no one
knows about it.
• Persuading
• Intensive competition exists in the market.
• Reminding
• Consumer’s need reminding of product’s
availability.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–8
Choosing the right
form of promotion
• Marketers need to consider:
–
–
–
–
The target market.
The nature of the product.
The stage of the product’s life cycle.
Money available for the promotion.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–9
Reaching the target market
• Marketers need to identify whom they are trying to
influence.
• Determining customer’s readiness to buy:
–
•
Awareness.
– Knowledge.
– Liking.
– Preference.
– Conviction.
– Purchase.
This is the hierarchy of effects (or buying stages).
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–10
Reaching the target market
• Determine where customers are located
–
Geographic location and access to the message.
• Determine type of customer
–
Retail, wholesale, intermediaries, business.
• Determine how many customers there are
–
Size of the potential customer and choice of suitable
communication, e.g. personal selling.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–11
Nature of the product
• Unit value of the product.
• Amount of product customisation.
• Amount of pre-sale and post-sale service required.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–12
Product’s life cycle stage
• Introduction
–
Customers are not aware of the product’s features.
• Growth
–
Customers are aware of the product’s benefits.
• Maturity
–
Competition intensifies and sales level off.
• Decline
–
Sales and profits are declining.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–13
Amounts of funds available
• How much does promotion cost?
• Class exercise
–
–
Refer to page 376, Rix 5e, for questions.
Refer to page 415, Rix 5e, for answers.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–14
Push versus pull strategy
Push strategy
• Producer creates demand for product.
• Aims promotional activity to channel
member(s).
• Each channel member promotes to next
channel member.
• Demand ‘pushed’ down distribution channel.
• Consumer influenced by retailer’s
advertising.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–15
Push versus pull strategy
Pull strategy
• Producer creates demand for product.
• Aims promotional activity directly at end
user.
• Consumer demands product from retailer.
• Demand ‘pulled’ up the distribution channel.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–16
Push versus pull strategy
Insert Fig 12.2 page 385
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–17
Planning
a promotional campaign
• Determine campaign objectives.
• Determine buying motives by purchaser.
• Determine campaign theme.
• Determine the campaign’s integrated marketing
communication process.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–18
The promotional budget
• How much should I spend?
• Percentage of sales method
–
Company might determine past or anticipated sales and
apply a percentage of sales as the promotional budget.
• All available funds
–
Company might use all available funds on the promotional
campaign.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–19
The promotional budget
• How much should I spend?
• Matching the competition (also known as share of voice)
–
Promotional expenditure based on market share of
competitors, or actual expenditure, if known.
• Task or objective method
–
–
Determine what tasks or objectives the promotion must
accomplish.
Determine what it will cost to perform the task or meet the
objective.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–20
Managing personal selling
• Personal or face-to-face selling is usually used
when:
–
–
–
–
–
The market is concentrated geographically.
The product has a high unit value.
The sale involves a trade-in.
The product is in the introductory stage of its life cycle.
There is not enough money to sustain campaign.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–21
Skills of the salesperson
• A good salesperson requires various attributes:
–
–
–
–
–
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Time management skills.
Organisational ability.
Consulting skills.
Communication skills.
Problem-solving skills.
Credibility (also a positive attitude).
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–22
Changing approaches to
personal selling
• Team selling
–
A group of people from various departments or
affiliate firms form the sales team, usually used for
major projects.
• Systems selling
–
Selling a total package of related goods and
services—a system—to solve a customer’s
problem.
• Relationship selling
–
Developing relationships with current and new
clients over an extended period.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–23
The integrated approach
• Personal selling and direct marketing:
–
–
–
–
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Used to develop sales leads.
Usually done via telemarketing.
Assists in categorising customers by value.
Best form for taking routine orders.
Cost-effective manner of communication.
• Online selling—company website set up to take
orders online.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–24
Personal selling process
Insert Fig 12.3 page 393
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–25
Selling models
• AIDA
–
–
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Awareness.
Interest.
Desire.
Action.
A traditional approach, which focused on the salesperson
and their objectives more than on customer needs.
• Consultative
–
A method used to determine the customer’s needs and
assist in providing a solution.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–26
Managing the sales team
• Recruitment and selection
–
Decide who is the right person for the job and what
attributes and qualifications they should have.
• Choose the right people
–
Various methods used are interview, references,
psychological and aptitude tests and physical
examinations.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–27
Managing the sales team
• Induction
–
A method used to familiarise a new employee with their
new working environment.
• Training
–
–
Determine who should train new salesperson.
A training program should be developed to meet company
objectives and cover philosophy, company and product
overview.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–28
Managing the sales team
• Coaching
–
Spending time with a salesperson to observe and assist
with their work practice, outcomes and to develop their
knowledge and skills.
• Motivation
–
–
Managers should find out what motivates an individual.
Motivators include financial and non-financial rewards.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–29
Compensation
• There are various forms of compensation:
–
Straight salary

–
Offers the maximum degree of security and stability of
earnings.
Straight commission

Opposite merits and limitations to those of the straightsalary plan.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–30
What is advertising?
• Advertising consists of presenting a non-personal,
sponsor-identified message about a product or
organisation.
–
Four key elements:
1
2
3
4
A verbal and/or visual message.
A sponsor, who is identified in the advertisement.
Delivery through one or more media.
Payment by the sponsor to the media carrying the
message.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–31
Types of advertising
• Consumer versus business advertising
–
Informational bases and makes appeals to rational or
emotional buying motives.
• Product versus institutional advertising
–
Focus on particular product or brand and information and
goodwill to company.
• Primary-demand and selective-demand advertising
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Stimulate demand for generic or specific brands.
• Cooperative advertising
–
Promotes the products of two or more firms that share its
costs.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–32
Which medium should we
choose?
•
To choose the right medium for a promotional message, we
need to consider the following questions:
•
What do we want our ads to do?
Who are we trying to reach?
What message do we want to communicate?
Where and when do our targeted customers make their
buying decisions?
How much will each medium cost?
•
•
•
•
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–33
Managing sales promotion
• Sales promotion (promotion marketing) includes:
Premiums, in-store displays, trade shows,
demonstrations and contests.
• It is distinct from advertising and personal selling
but all three are interrelated.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–34
Managing sales promotion
• Choosing the right sales promotional tools
• What is the objective?
• Who is the target market?
• Product considerations—demonstrational.
• The cost of the tool.
• Current economic conditions.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–35
Managing sales promotion
• Measuring the success of our sales promotion
• Responses to a premium or special offer.
• Sales promotions have definite start and end
dates.
• Most promotions are designed to impact sales
directly, rather than awareness or attitude.
• Results may be inflated by sales cannibalisation.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–36
Managing public relations
and publicity
• PR can be achieved by:
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Supporting charitable projects.
Supplying volunteers or other resources.
Participating in community-service events.
Sponsorship.
Providing information to customers via newsletters.
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–37
Managing public relations
and publicity
• Publicity can be achieved by:
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–
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Structured news releases to the media.
Coordinating personal communication with a group.
Coordinating one-to-one personal communication
(lobbying).
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing: A Practical Approach 5/e by Peter Rix
Slides prepared by: Joe Rosagrata
12–38