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Ch 12 - 1 Copyright © 2011 Pearson Education
Principles of Marketing, Arab World Edition
Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed Tolba
Presentation prepared by Annelie Moukaddem Baalbaki
CHAPTER TWELVEPromotion Mix Strategies: Advertising and Public RelationsLecturer: Insert your name here
Ch 12 -2 Copyright © 2011 Pearson Education
Promotion: Advertising and Public Relations
Topic Outline
12.1 Advertising
12.2 Public Relations
12.3 Personal Selling
12.4 Managing the Sales Force
12.5 The Personal Selling Process
12.6 Sales Promotion
Ch 12 - 3 Copyright © 2011 Pearson Education
Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.
Advertising
Developing and Advertising Programs
Ch 12 - 4 Copyright © 2011 Pearson Education
Advertising
Developing and Advertising Programs
Advertising
Setting Advertising Objectives
An advertising objective is a specific communication task to be accomplished with a specific target audience during a specific time.
• Objectives are classified by primary purpose
• Inform
• Persuade
• Remind
Ch 12 - 6 Copyright © 2011 Pearson Education
Advertising
Informative advertising is used when introducing a new product category; the objective is to build primary demand.
Comparative advertising directly or indirectly compares the brand with one or more other brands.
Persuasive advertising is important with increased competition to build selective demand.
Reminder advertising is important with mature products to help maintain customer relationships and keep customers thinking about the product.
Setting Advertising Objectives
Ch 12 - 7 Copyright © 2011 Pearson Education
Advertising
Ch 12 - 8 Copyright © 2011 Pearson Education
Advertising
1. Product life-cycle stage
•New products require larger budgets
•Mature brands require lower budgets
2. Market share
•Building or taking market share requires larger budgets
•Markets with heavy competition or high advertising clutter require larger budgets
•Undifferentiated brands require larger budgets
Setting the Advertising Budget
Ch 12 - 9 Copyright © 2011 Pearson Education
Advertising
Advertising strategy is the strategy by which the company accomplishes its advertising objectives and consists of:
1. Creating advertising messages
2. Selecting advertising media
Developing Advertising Strategy
Ch 12 - 10 Copyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
Ads need to break through the clutter:
1. Gain attention
2. Communicate well
Advertisements need to be better planned, more imaginative, more entertaining, and more rewarding to consumers.
• Madison & Vine—the intersection of Madison Avenue and Hollywood—represents the merging of advertising and entertainment
Creating the Advertising Message
Ch 12 - 11 Copyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
Creating the Advertising Message
Ch 12 - 12 Copyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
Message strategy is the general message that will be communicated to consumers. It Identifies consumer benefits.
Creative concept is the idea that will bring the message strategy to life and guide specific appeals to be used in an advertising campaign. Characteristics of the appeals:
• Meaningful
• Believable
• Distinctive
Creating the Advertising Message
Ch 12 - 13 Copyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
Message execution is when the advertiser turns the big idea into an actual ad execution that will capture the target market’s attention and interest.
The creative team must find the best approach, style, tone, words, and format for executing the message.
Creating the Advertising Message
Ch 12 - 14 Copyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
Creating the Advertising Message: Execution
Ch 12 - 15 Copyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
Message execution also includes:
• Tone
- Positive or negative
• Attention-getting words
• Format
- Illustration
- Headline
- Copy
Creating the Advertising Message: Execution
Ch 12 - 16 Copyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
Consumer Generated Messages
1. YouTube videos, MySpace, Google…
2. Brand Web site contests
Benefits of consumer generated messages:
• Low expense
• New creative ideas
• Fresh perspective on brand
• Boost consumer involvement
Creating the Advertising Message
Ch 12 - 17 Copyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
Major steps include:
1. Deciding on reach-frequency-impact
2. Choosing among major media types
3. Selecting media vehicles
4. Deciding on media timing
Selecting Advertising Media
Ch 12 - 18 Copyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
Reach is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time.
Frequency is a measure of how many times the average person in the target market is exposed to the message.
Impact is the qualitative value of a message exposure through a given medium.
Selecting Advertising Media
Ch 12 - 19 Copyright © 2011 Pearson EducationCopyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
Choosing among major media types:
1. Television
2. Internet
3. Newspapers
4. Direct Mail
5. Magazines
6. Radio
7. Outdoor
Selecting Advertising Media
Ch 12 - 20 Copyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
Selecting Specific media vehicles involves decisions presenting the media effectively and efficiently to the target customer and must consider the message’s:
• Impact
• Effectiveness
• Cost
Selecting Advertising Media
Ch 12 - 21 Copyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
Narrowcasting focuses the message on selected market segments.
• Lowers cost
• Targets more effectively
• Engages customers better
Narrowcasting Versus Shotgun Approaches
Ch 12 - 22 Copyright © 2011 Pearson Education
Advertising: Developing Advertising Strategy
When deciding on media timing, the planner must consider:
1. Seasonality
2. Pattern of the advertising
• Continuity—scheduling within a given period
• Pulsing—scheduling unevenly within a given period
Selecting Advertising Media
Ch 12 - 23 Copyright © 2011 Pearson Education
Evaluating Advertising Effectiveness and
Return on Advertising Investment
Return on Advertising Investment is the net return on advertising investment divided by the costs of the advertising investment.
Communication effects indicate whether the ad and media are communicating the ad message well and should be tested before or after the ad runs.
Sales and profit effects compare past sales and profits with past expenditures or through experiments.
Return on Advertising Investment
Ch 12 - 24 Copyright © 2011 Pearson Education
Other Advertising Considerations
1. Organizing for advertising
• Agency vs. in-house
2. International advertising decisions
• Standardization
Ch 12 - 25 Copyright © 2011 Pearson Education
Public relations involves building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.
Public relations is used to promote product, people, ideas, and activities.
Public Relations
Ch 12 - 26 Copyright © 2011 Pearson Education
Public relations department functions include:
• Press relations or press agency
• Product publicity
• Public affairs
• Lobbying
• Investor relations
• Development
Public Relations
Ch 12 - 27 Copyright © 2011 Pearson Education
Public Relations
• Lower cost than advertising
• Stronger impact on public awareness than advertising
The Role and Impact of Public Relations
Ch 12 - 28 Copyright © 2011 Pearson Education
Public Relations
Major Public Relations Tools
Ch 12 - 29 Copyright © 2011 Pearson Education
Personal Selling
Personal selling is the personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships.
Salesperson is an individual representing a company to customers by performing one or more of the following activities: prospecting, communicating, selling, servicing, information gathering, and relationship building.
The Role of the Sales Force
Ch 12 - 30 Copyright © 2011 Pearson Education
Personal Selling
Salespeople are an effective link between the company and its customers to produce customer value and company profit by:
1.Linking the company with its customers
•Representing the company to customers
•Representing customers to the company
2.Coordinating marketing and Sales
The Role of the Sales Force
Ch 12 - 31 Copyright © 2011 Pearson Education
Managing the Sales Force
Sales force management is the analysis, planning, implementation, and control of sales force activities.
Ch 12 - 32 Copyright © 2011 Pearson Education
Managing the Sales Force
Designing Sales Force Strategy and Structure
Sales Force Structure
Ch 12 - 33 Copyright © 2011 Pearson Education
Managing the Sales Force
Territorial sales force structure refers to a structure where each salesperson is assigned an exclusive geographic area and sells the company’s full line of products and services to all customers in that territory.
• Defines salesperson’s job
• Fixes accountability
• Lowers sales expenses
• Improves relationship building and selling effectiveness
Sales Force Structure
Ch 12 - 34 Copyright © 2011 Pearson Education
Managing the Sales Force
Product sales force structure refers to a structure where each salesperson sells along product lines.
• Improves product knowledge
• Can lead to territorial conflicts
Customer sales force structure refers to a structure where each salesperson sells along customer or industry lines.
• Improves customer relationships
Sales Force Structure
Ch 12 - 35 Copyright © 2011 Pearson Education
Managing the Sales Force
Complex sales force structure refers to a structure where a wide variety of products are sold to many types of customers over a broad geographic area and combines several types of sales force structures.
Sales Force Structure
Ch 12 - 36 Copyright © 2011 Pearson Education
Managing the Sales Force
Salespeople are one of the company’s most productive and expensive assets.
• Increases in sales force size can increase sales and costs
Workload approach to sales force size refers to grouping accounts into different classes to determine the number of salespeople needed.
Sales Force Size
Ch 12 - 37 Copyright © 2011 Pearson Education
Managing the Sales Force
Outside salespeople call on customers in the field.
Inside salespeople conduct business from their offices and often provide support for the outside salespeople.
• Technical sales support people
• Sales assistants
Team selling is used to service large, complex accounts.
Other Sales Force Strategy and Structure Issues
Ch 12 - 38 Copyright © 2011 Pearson Education
Managing the Sales Force
Issues in Recruiting and Selecting
1.Careful selection and training increases sales performance
2.Poor selection increases recruiting and training costs
• Lost sales
• Disrupts customer relationships
Recruiting and Selecting Salespeople
Ch 12 - 39 Copyright © 2011 Pearson Education
Managing the Sales Force
Most companies provide continuing sales training via seminars, sales meetings, and web e-learning throughout the salesperson’s career.
Some companies are adding e-learning to their sales training programs.
Training Salespeople
Ch 12 - 40 Copyright © 2011 Pearson Education
Managing the Sales Force
Compensating Salespeople
Ch 12 - 41 Copyright © 2011 Pearson Education
Managing the Sales Force
The goal of supervision is to help salespeople work smart by doing the right things in the right ways.
The goal of motivation is to encourage salespeople to work hard and energetically toward sales force goals.
Supervising and Motivating Salespeople
Ch 12 - 42 Copyright © 2011 Pearson Education
Managing the Sales Force
Supervising Salespeople
Selling and the Internet: Major tool to support salespeople
• Training
• Sales meetings
• Live sales presentations
• Servicing accounts
Ch 12 - 43 Copyright © 2011 Pearson Education
Managing the Sales Force
Managing the Sales Force
Sales morale and performance can be increased through:
• Organizational climate
• Sales quotas
• Positive incentives
Motivating Salespeople
Ch 12 - 45 Copyright © 2011 Pearson Education
Managing the Sales Force
Evaluating Salespeople and Sales Force Performance
Ch 12 - 46 Copyright © 2011 Pearson Education
The Personal Selling Process
Ch 12 - 47 Copyright © 2011 Pearson Education
The Personal Selling Process
Personal selling is transaction-oriented to close a specific sale with a specific customer.
The long-term goal is to develop a mutually profitable relationship.
Personal Selling and Managing Customer Relationships
Ch 12 - 48 Copyright © 2011 Pearson Education
Sales Promotion
Sales promotion refers to the short-term incentives to encourage purchases or sales of a product or service:
• Consumer promotions
• Trade promotions
• Business promotions
• Sales force promotions
Whereas advertising offers reasons to buy a product or service, sales promotion offers reasons to buy now.
Ch 12 - 49 Copyright © 2011 Pearson Education
Sales Promotion
Several Factors have contributed to this growth.
1. Product managers are under pressure to increase current sales.
2. Companies face more competition.
3. Competing brands offer less differentiation.
4. Advertising efficiency has declined due to rising costs, clutter, and legal constraints.
5. Consumers have become more deal-oriented.
Rapid Growth of Sales Promotions
Ch 12 - 50 Copyright © 2011 Pearson Education
Sales Promotion
Consumer promotion objectives:
• Urge short-term customer buying
• Enhance long-term customer relationships
Trade promotions urge retailers to:
• Carry new items or more inventory
• Buy in advance
• Advertise company products
• Get more shelf space
Sales Promotion Objectives
Ch 12 - 51 Copyright © 2011 Pearson Education
Sales Promotion
Sales force objectives include getting:
•More sales force support for new or current products
•Salespeople to sign up new accounts
Sales Promotion Objectives
Ch 12 - 52 Copyright © 2011 Pearson Education
Sales Promotion
Major Sales Promotion Tools
Ch 12 - 53 Copyright © 2011 Pearson Education
Sales Promotion
Samples offer a trial amount of a product.
Coupons are certificates that give buyers a saving when they purchase specified products.
Cash refunds are similar to coupons except that the price reduction occurs after the purchase.
Price packs offer consumers savings off the regular price of a product.
Consumer Promotion Tools
Ch 12 - 54 Copyright © 2011 Pearson Education
Sales Promotion
Premiums are goods offered either for free or at a low price.
Advertising specialties are useful articles imprinted with the advertiser’s name, logo, or message that are given as gifts to consumers.
Point-of-purchase promotions include displays and demonstrations that take place at the point of sales.
Consumer Promotion Tools
Ch 12 - 55 Copyright © 2011 Pearson Education
Sales Promotion
Contests, sweepstakes, and games give consumers the chance to win something—such as cash, trips, or goods—by luck or through extra effort.
Contests require an entry by a consumer.
Sweepstakes require consumers to submit their names for a drawing.
Games present consumers with something that may or may not help them win a prize.
Event marketing
Consumer Promotion Tools
Ch 12 - 56 Copyright © 2011 Pearson Education
Sales Promotion
Trade Promotion Tools
Ch 12 - 57 Copyright © 2011 Pearson Education
Sales Promotion
Conventions and trade shows are effective to reach many customers not reached with the regular sales force.
Sales contests are effective in motivating salespeople or dealers to increase performance over a given period.
Business Promotion Tools
Ch 12 - 58 Copyright © 2011 Pearson Education
Sales Promotion
1. Size of the incentive
2. Conditions for participation
3. Promote and distribute the program
4. Length of the program
5. Evaluation of the program
Developing the Sales Promotion Program
Ch 12 - 59 Copyright © 2011 Pearson Education
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Ch 12 - 60 Copyright © 2011 Pearson Education