PROMOTIONEARN: ENTREPRENEURSHIP – A RICHNESS FROM NATURE

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PROMOTION

Personal Selling

Mass Selling Advertising

Publicity

Sales Promotion

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PROMOTION

Communication of information

• influence the buyer

3 methods

Personal Selling

Mass Selling

Sales Promotion

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PERSONAL SELLING

Direct communication between seller and buyer

Face to face contact

Usually used to sell industrial goods and services

Also used to sell some expensive consumer items, eg. Cars, computer systems

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PROMOTION

Mass Selling

communicating with large numbers of potential customers

“non”-personal selling

used when the target market is large and dispersed

Advertising is a form of Mass Selling

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PROMOTION

Advertising

the main form of mass selling

any paid form of nonpersonal communication eg. Techniques include billboard ads and TV commercials

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PROMOTION

PublicityPublicity

The The generation of awareness about a about a product beyond regular advertising product beyond regular advertising methods.methods.

Usually less costly than advertising Usually less costly than advertising because sometimes the message is because sometimes the message is spread for free by a newspaper article or spread for free by a newspaper article or TV story.TV story. 7

PROMOTION Publicity

Examples of Publicity famous person photographed using your product your product mentioned in National News in a

positive way your product featured in a movie TV commentary about aspects of your product

trade magazines carrying a storyeg. Road and Track doing a feature on the new Landrover

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PROMOTION Publicity

Publicity can be negative

eg. If a famous movie star gets electrocuted using your product, this can cause people to NOT want to buy it - this would be a major problems

eg. If your product is sabotaged - this could include tampering with medical products ie. Tylenol

eg. If there are negative rumours about the ingredients in your product

eg. If there are negative ingredients about the moral aspects of your company

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PROMOTION PEOPLE

Sales Managers Advertising Managers Sales Promotion Managers

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PROMOTION PEOPLE

Sales Managers Are concerned with managing personal selling In small companies this person also does the

advertising and sales promotion

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PROMOTION PEOPLE

Advertising Managers They manage the mass selling activities They chose the company to make the

commercials Pick the billboard signs etc. If the company is big enough they hire an

outside agency They may also do publicity as well

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PROMOTION PEOPLE

Sales Promotion Managers They manage the Sales Promotion activities They decide about in-store coupons, prizes,

contests etc. They spend a lot of time visiting the retail outlets

where the product is sold

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PEOPLE IN SALES PROMOTION

Sales Promotion Managers

- They deal with Point-of-purchase advertising Specialty advertising Samples Coupons Premiums Loyalty points / air miles Rebates Contests

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RELATIONSHIP BETWEEN ADVERTISING AND THE PRODUCT LIFE CYCLE (PLC)

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PROMOTION OBJECTIVES

1-Informing

• people have to know about it, in order to buy it

Advertising that seeks to develop demand through presenting factual information on the attributes of a product or service.

Tends to be used in promoting NEW products.

Use in the Introductory Stage of Product Life Cycle (PLC) 16

PROMOTION OBJECTIVES

2- Persuading2- Persuading

• when competition offers similar product, you have to “persuade” them to try yours

Advertising that emphasizes using words and/or images to try to create an image for a product and to influence attitudes about it.

Used by Coke and Pepsi: lifestyle ads.

Used after the Introductory Stage of the PLC17

PROMOTION OBJECTIVES

3-Reminding3-Reminding• when new competition comes

along, you have to “remind” customers of your greater experience, advantages etc.

Advertising whose goal is to reinforce previous promotional activity by keeping the product’s or service’s name in front of the public.

Used in the Maturity Period and the Decline Stage of the PLC. 18

4 PROMOTION JOBS

ATTENTION INTEREST DESIRE ACTION

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PROMOTION• Pushing through the promotion channelPushing through the promotion channel

Producer personal selling wholesaler Producer personal selling wholesaler retailer retailer customercustomer

Promotion techniques usedPromotion techniques used• run ads in trade magazines to make wholesalers run ads in trade magazines to make wholesalers

aware of the productaware of the product

• provide incentives to retailers to carry the itemprovide incentives to retailers to carry the item

• run contests for salespeople to win prizes for run contests for salespeople to win prizes for selling the productselling the product

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PROMOTION

• Pulling through the promotion channelPulling through the promotion channel

Producer personal selling To wholesaler Producer personal selling To wholesaler retailer customer retailer customer

Promotion techniques usedPromotion techniques used• run TV commercials so customers directly run TV commercials so customers directly

learn about the product - then they go to the learn about the product - then they go to the store and ask for it, or call around to find out store and ask for it, or call around to find out where it is soldwhere it is sold

• give free samples to potential customersgive free samples to potential customers 21

PROMOTION

• Pulling through the promotion channelPulling through the promotion channelProducer personal selling To wholesaler retailer Producer personal selling To wholesaler retailer

customercustomer

• Sometimes you do “pulling” when the Sometimes you do “pulling” when the Middlemen cannot be pushed, that is Middlemen cannot be pushed, that is they already have a competitors they already have a competitors product, so the way to get Middlemen product, so the way to get Middlemen to WANT to carry the product, is to to WANT to carry the product, is to have customers ask for it. have customers ask for it. 22

DIRECT MARKETING

Potential Mail RecipientsPotential Mail Recipients

Once your name is on a list for a Once your name is on a list for a newspaper subscription, your name and newspaper subscription, your name and address can be “sold” to another address can be “sold” to another company who will mail you information to company who will mail you information to try and convince you to buy their product.try and convince you to buy their product.

Buying and selling lists (databases) of Buying and selling lists (databases) of such names is big business.such names is big business.

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COMPARISON OF DIRECT MARKETING AND GENERAL ADVERTISING

Direct Marketing General Advertising

--Selling to individuals. Customers are -Mass selling. Buyers identified as broadoften identifiable by name, address, and groups sharing common demographic andpurchase behavior. psychographic characteristics.

-Products have added value or service. -Product benefits do not always include-Distribution is important product benefit. convenient distribution channels.

-The medium is the marketplace. -Retail outlet is the marketplace.

-Marketer controls product until delivery. -Marketer may lose control as productenters distribution channel.

-Advertising used to motivate an -Advertising used for cumulative effectimmediate order or inquiry. over time to build image, awareness,

loyalty, benefit recall. Purchase actiondeferred.

- Repetition used within ad. -Repetition used over time.

- Consumers feel high perceived risk – -Consumers feel less risk – have directproduct brought unseen. Recourse is contact with the product and directdistant. recourse.

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ADOPTION PROCESS

Innovators Early Adopters - sales people concentrate

their efforts here Early majority Late majority Laggards, or nonadopters

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SETTING THE PROMOTION BUDGET

Most common method is based on using past Most common method is based on using past percentagespercentages

- that is to say,,,,- that is to say,,,,

If you sold 1,000,000If you sold 1,000,000€ and you spent 20% on and you spent 20% on advertising, which = 200,000advertising, which = 200,000€

then,then,

if you spend 400,000if you spend 400,000€ you should sell 2 you should sell 2€ million! million!

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SETTING THE PROMOTION BUDGET

Other methods - used in real world

Matching what competition spends

Based on what is required to get number of customers that will meet corporate objectives - called the Task Method- sometimes stated as a % of sales

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