For use only with Perreault/Cannon/ McCarthy texts, © 2009 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin

Chapter 14

Promotion—Introduction to Integrated Marketing Communications

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1. Know the advantages and disadvantages of the promotion methods a marketing manager can use in strategy planning.

2. Understand the integrated marketing communications concept and why most firms use a blend of different promotion methods.

3. Understand the importance of promotion objectives.

4. Know how the communication process affects promotion planning.

5. Know how direct-response promotion is helping marketers develop more targeted promotion blends.

At the end of this presentation, you should be able to:

6. Understand how customer-initiated interactive communication is different.

7. Know how typical promotion plans are blended to get an extra push from wholesalers and retailers and help from customers in pulling products through the channel.

8. Understand how promotion blends typically vary over the adoption curve and product life cycle.

9. Understand how to determine how much to spend on promotion efforts.

At the end of this presentation, you should be able to:

Marketing Strategy Planning Process

CH 16: Advertising & Sales Promotion

Promotion methods

Managing promotion

Effective communication

Blending promotion

CH 15: Personal Selling and Customer Service

CH 14: Promotion Intro. to Integrated Marketing Communications

Promotion and Marketing Strategy Planning

Intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message

Marketing manager blends inputs from– Sales managers– Advertising managers– Public relations manager– Sales promotion managers

Integrated promotion effort in channel requires cooperation and coordination

Blend depends on promotion objectives and situation

Integrated Marketing Communications

Promotion Seeks to Shift the Demand Curve

Mass SellingMass Selling

Personal SellingPersonal Selling

Sales PromotionSales Promotion

Different methods of promotion Advertising Publicity

Several Promotion Methods Are Available

• Contests• Coupos• Aisle displays• Samples• Trade shows• Point-of-purchase

materials• Banners & streamers• Frequent buyer

programs• Sponsored events

• Contests• Coupos• Aisle displays• Samples• Trade shows• Point-of-purchase

materials• Banners & streamers• Frequent buyer

programs• Sponsored events

Sales Promotion Tries to Spark Immediate Interest

Aimed at consumers or users

Aimed at consumers or users

• Price deals• Promotion allowances• Sales constests• Calendars & gifts• Trade shows• Meetings• Catalogs• Merchandising aids• Videos

• Price deals• Promotion allowances• Sales constests• Calendars & gifts• Trade shows• Meetings• Catalogs• Merchandising aids• Videos

Aimed at wholesalers or retailers

Aimed at wholesalers or retailers

• Contests & Bonuses• Meetings• Portfolios & Displays• Sales aids • Training materials

• Contests & Bonuses• Meetings• Portfolios & Displays• Sales aids • Training materials

Aimed at company’s own sales force

Aimed at company’s own sales force

Sales Promotion

Sales Promotion Managers (manage

sales promotion effort)

Sales Promotion Managers (manage

sales promotion effort)

Advertising Managers (in-house

agency; public relations)

Advertising Managers (in-house

agency; public relations)

Sales Managers (managing

personal selling)

Sales Managers (managing

personal selling)

Marketing Mangers (determine and coordinate

promotional activities)

Marketing Mangers (determine and coordinate

promotional activities)

IntegratedMarketing

Communications

Someone Must Plan, Integrate, and Manage the Promotion Blend

PersuadingPersuading

InformingInforming

RemindingReminding

Which Method to Use Depends on Promotion Objectives

Reminding May Be Enough

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Promotion Objectives Adoption Process AIDA Model

Informing

Awareness

Interest

Attention

Interest

Persuading

Evaluation

Trial Desire

Reminding

Decision

Confirmation Action

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Promotion Objectives Relate to the Adoption Process and AIDA Mode

Interactive Exercise: AIDA

Source—the sender of a message Encoding—the source deciding what to say and

translating it into words or symbols that convey meaning

Message channel—the carrier of the message Noise—any distraction that reduces the effectiveness of

the communication process Decoding—the receiver translating the message Receiver — the potential customer

Traditional Communication Concepts in Promotion

NoiseNoise

The Traditional Communication Process

SourceSource

ReceiverReceiver

EncodingEncoding

Message channel

Message channel

DecodingDecoding

FeedbackFeedback

Encoding & Decoding Depend on a Common Frame of Reference

Ron has been a pioneer in the use of direct-responsetelevision “infomercials.” Over the years his infomercialshave promoted many products, including the ShowtimeRotisserie Barbecue, a food dehydrating machine, and theworld-famous “Veg-O-Matic.” The chief advantage of theinfomercial is that it provides plenty of time to describe anddemonstrate a product’s benefits in detail. The choice ofthe infomercial is related mainly to the _________ elementof the communication process.

A. message channelB. encodingC. decodingD. feedback E. noise

Checking Your Knowledge

Encoding and Decoding

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Target DirectlyWith a Database (use

information about past purchase behavior)

Target DirectlyWith a Database (use

information about past purchase behavior)

More Than Direct Mail (e.g.,

telephone, print, e-mail, internet, broadcast,)

More Than Direct Mail (e.g.,

telephone, print, e-mail, internet, broadcast,)

Ethical Concerns (e.g., junk mail; spam; unwanted

telemarketing calls; security of personal information in a

database; cookies)

Ethical Concerns (e.g., junk mail; spam; unwanted

telemarketing calls; security of personal information in a

database; cookies)

Integrated Direct-Response Promotion Is Very Targeted

New electronic media encourage consumers to search for information

Consumer decides how much information to get– Marketing information not just in 30-second sound

bytes Action (response)—including purchase—may

be immediate Communication with customers is becoming

more customized (personalized)

Customer May Initiate Communication

NoiseNoise

A Model of Customer-Initiated Interactive Communication

Source’s message

Source’s message

Message channel

Message channel

SearchSearch

Select a topic

Select a topic

Receiver (customer)

Receiver (customer)

How Typical Promotion Plans Are Blended and Integrated

Other Promotional Elements of Pushing

Pulling – Demand Pulls the Product through the Channel

An Example of Pulling

Fido, Inc. is a producer of dog food and is getting ready to introduce a new brand. The firm’s marketing research department learns that a competitor is planning to launch another brand about two weeks after Fido’s launch. Fido’s marketing department quickly mails a set of dated coupons to several thousand consumers in a purchased database of dog owners, encouraging them to ask for the new Fido brand in their favorite store and to stock up on the new brand using the coupons. This is an example of:

A. pulling.B. noise.C. pushing.D. encoding.E. decoding.

Checking Your Knowledge

Adoption Processes Can Guide Promotion Planning

Because life is too short to waste time. Wouldn’t it be nice if your refrigerator could do your shopping on the Internet?

Appeal for Innovators

Stimulating Adoption of an Image

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““This new This new idea is good”idea is good”

““Our brand is Our brand is best”best”

““Our brand is Our brand is better, really”better, really”

““Let’s tell Let’s tell those who those who

still want our still want our product”product”

Promotion Varies Over the Life Cycle

Nature of Competition Requires Different Promotion

Percentage of SalesPercentage of Sales

Task MethodTask Method

Setting the Promotion Budget

Budget based on percent of past or expected sales– most common approach– main advantage is ease– can lead to major problems, including cutbacks when more

money is needed

Task method—budgets for what needs to be accomplished– usually the sensible approach– requires that activities be evaluated against objectives

Same ideas apply in budgeting other types of marketing activities

Setting the Promotion Budget

Which of the following is the main type of "mass selling"?

A. Personal selling.B. Publicity.C. Sales promotion.D. Advertising.E. Both B and D.

Study Question 1

A car company sent three automobile magazines some technical information and explanations about the features of its innovative new model. One of the magazines later printed a story about the car. This is an example of: 

A. personal selling.B. advertising.C. publicity.D. sales promotion.E. None of the above

Study Question 2

Blending the firm's promotion efforts to convey a complete and consistent message is the goal of: 

A. Sales management communications.B. Sales promotion communications.C. Integrated promotional marketing.D. Integrated marketing communications.E. Integrated sales promotion. 

Study Question 3

What basic promotion objective should be emphasized by a producer introducing a really new product which satisfies customer needs better than any existing product? 

A. PersuadingB. RemindingC. MaximizingD. InformingE. Communicating

Study Question 4

What basic promotion objective should be sought by a producer whose Product is very similar to its many competitors' Products? A. PersuadingB. PromotingC. CommunicatingD. InformingE. Reminding

Study Question 5