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BUAD 307 PROMOTION Lars Perner, Instructor 1
PROMOTIONElements of the Promotion Mix ● Advertising Strategies ●
Other Methods of Promotion
BUAD 307 PROMOTION Lars Perner, Instructor 2
Learning Objectives
• Identify obstacles that advertising messages face
• Identify the choices facing marketing managers regarding– Promotional objectives– Promotional message– Media choice– Advertising and promotion
spending
BUAD 307 PROMOTION Lars Perner, Instructor 3
Elements of the Promotion Mix
• Advertising• Sales Promotion
– Sales– Coupons– Rebates– Premiums
• Personal selling• Public relations• Direct marketing
BUAD 307 PROMOTION Lars Perner, Instructor 4
BUAD 307 PROMOTION Lars Perner, Instructor 5
Some Media Alternatives
• Television– Conventional advertisements– Infomercials– Sponsorship programming– “Placements”
• In programming • “Superimposed”
• Radio
• Magazines• Newspapers• Outdoor• Internet• Point-of-purchase• Other
– Movie theaters– On other products
BUAD 307 PROMOTION Lars Perner, Instructor 6
Reaching the Customer: Encoding, “Noise,” and “Decoding”
ENCODINGENCODINGTHE THE
MESSAGEMESSAGE
MESSAGEMESSAGECHANNELCHANNEL
DECODINGDECODINGTHETHE
MESSAGEMESSAGERECEIVERRECEIVER
CHANNEL CHANNEL FEEDBACKFEEDBACK
NOISENOISE
SENDERSENDER
Text, p. 211..
Marketing mgrAdvertising mgrAdvertising agency
AdvertisementCouponSales presentationPress releaseStore display
Media, SalespersonMedia, SalespersonRetail storeRetail storeNews programNews program
Receiver Interpretation of the message
CustomersMedia audienceNews mediaClients
Other adsNews articlesOther store displays
Note that things can go wrong in steps 2, 3, and 4. The message must compete with other ads and for limited customer attention. Repetition is crucial.
BUAD 307 PROMOTION Lars Perner, Instructor 7
Advertising Intensity and Return --A Typical RelationshipAdvertising Intensity and Return --A Typical Relationship
0
0.2
0.4
0.6
0.8
1
Res
pons
e (e
.g.,
sal
es,
reca
ll)
0 5 10 15 20 25 Amount of Advertising Spending
The “S”-Shaped Curve
Saturation Point
Relatively
high effecti
veness
Too little to domuch good
BUAD 307 PROMOTION Lars Perner, Instructor 8
Measuring Advertising EffectMeasuring Advertising Effect
• Several possible criteria:– Scanner data
• Individual TV exposure can be matched against actual purchases
• Available only for grocery products
• Can only be used for ads that have been running (otherwise, they would not have been able to influence actual purchases)
• Generally the preferred method when available
– Increase in sales (but it may be impossible to separate effects of different simultaneous ads and other factors)—NOT GENERALLY RELIABLE!
– Lab studies:• Recall• Attitude toward product• Preference
BUAD 307 PROMOTION Lars Perner, Instructor 9
Scanner Data Research
TELEVISIONTELEVISIONEXPOSUREEXPOSURE
DEMOGRAPHICDEMOGRAPHICINFORMATIONINFORMATION
ANALYSISANALYSIS
RECORDEDRECORDEDPURCHASESPURCHASES
HOUSEHOLDHOUSEHOLDFILEFILE
Purchase on occasion: Yes, noPurchase on occasion: Yes, noTime since previous purchaseTime since previous purchasePrevious purchasesPrevious purchasesCurrent priceCurrent pricePrevious pricePrevious priceCurrent promotional statusCurrent promotional statusPrevious promotional statusPrevious promotional statusCurrent display statusCurrent display statusPrevious display statusPrevious display statusDisplay status of competing Display status of competing brandsbrandsPromotional status of Promotional status of competing brandscompeting brandsCoupon used: Yes, noCoupon used: Yes, noCoupon available: Yes, noCoupon available: Yes, noCoupon available for other Coupon available for other brands? Yes, nobrands? Yes, noAmount of couponAmount of couponFamily sizeFamily size
OccupationOccupationFamily sizeFamily sizeIncomeIncomeHome ownershipHome ownership
No. of ads seen by No. of ads seen by shoppershopperAds seen for competing Ads seen for competing brandsbrands““Split cable”Split cable”
BUAD 307 PROMOTION Lars Perner, Instructor 10
The Personal Selling Process—Steps
1. Generate and qualify leadsa. Finding leads
b. Qualification process: Predictor of likelihood of purchase
2. Pre-approach and Customer Relations Management (CRM) systems
3. Sales Presentation and Overcoming Reservations
4. Closing the sale
5. Follow-Up