MKTG 301 Final Exam Study Guide Promotion Advertising Promotion Mix The specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships Promotion Mix Tools Advertising Any paid form of non personal presentation and promotion of ideas goods or services by an identified sponsor o Ex Broadcast print Internet mobile outdoor and other forms Sales Promotion Short term incentives to encourage the purchase or sale of a product or service o Ex Discounts coupons displays and demonstrations Personal Selling Personal presentation by the firm s sales force for the purpose of making sales and building customer relationships o Ex Sales presentation trade shows and incentive programs Public Relations 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 o Ex Press releases sponsorships events and web pages Direct Marketing Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships o Ex Catalogs direct response TV kiosks Internet and mobile marketing Goals of the Promotion Mix To persuasively communicate customer value and build customer relationships To deliver a clear consistent and compelling message Integrated Marketing Communications The integrated message being communicated to the customer Advertising What is Advertising Any paid form of non personal presentation and promotion of ideas goods or services by an identified sponsor Broadcasting vs Narrowcasting Advertisers are now adding a broad selection of more specialized and highly targeted media to reach small customer segments with more personalized interactive messages The new media range from specialty cable television channels and made for the web videos to Internet catalogs e mail blogs mobile phone content and online social networks In all companies are doing less broadcasting and more narrowcasting Narrowcasting much more segmented and wide amount of channels lots of advertisers Major Ad Decisions Setting Objectives Informative Advertising o Build primary demand knowledge o Good for introducing a new product category o Ex Droid showing how it works Touch screen Persuasive Advertising Reminder Advertising o Build secondary demand preference o Good for direct or indirect brand comparisons o Ex Energizer bunny toys with those batteries Bounty paper towels shows you exactly how it s better than other brands o Increase frequency of purchase o Good for mature products o Ex Image based advertising diet coke taco bell introducing dog to remind you Budget Decisions Affordable Method o Setting the promotion budget at the level management thinks the company can afford Small businesses often use this method reasoning that a company cannot spend more on advertising than it has They start with total revenues deduct operating expenses and capital outlays and then devote some portion of the remaining funds to advertising Percentage of Sales Method o Setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price It is simple to use and helps management think about the relationships between promotion spending selling price and profit per unit Competitive Parity Method o Setting the promotion budget to match competitors outlays They monitor competitors advertising or get industry promotion spending estimates from publications or trade associations and then set their budgets based on the industry average Objective and Task Method o Developing the promotion budget by 1 defining specific objectives 2 determining the tasks that must be performed to achieve these objectives and 3 estimating the costs of performing these tasks The sum of these costs is the proposed promotion budget The advantage of this method is that it forces management to spell out its assumptions about the relationship between dollars spent and promotion results Ad Message Decisions Positioning Strategy The Big Idea compelling creative concept Creative Concept The compelling big idea that will bring the advertising message strategy to life in a distinctive and memorable way At this stage simple message ideas become great ad campaigns Ad Execution Styles Slice of Life o Showing typical person people using product in normal setting o Ex A Silk Soymilk Rise and Shine ad shows a young professional starting the day with a healthier breakfast and high hopes o Showing how product fits with particular lifestyle o Ex An ad for Athleta active wear shows a woman in a complex yoga pose and states If your body is your temple build it one piece at a time Lifestyle Fantasy o Creates a fantasy around the product or its use o Ex Recent IKEA ads show consumers creating fanciful room designs with IKEA furniture such as a bedroom for a queen made by Bree and her sister designed by IKEA Mood Image o Build mood or image around product e g beauty love intrigue or serenity Ex A nestle Toll House ad shows a daughter hugging her mother after surprising her with an unexpected weekend home from college The mother responds So I baked her the cookies she s loved since she was little Musical Personality Symbol o Shows someone singing about a product o Ex Chevrolet recently ran a two minute long TV commercial featuring most of the cast of the TV show Glee in an elaborate production number set to the 1950s brand jingle See the U S A in Your Chevrolet o Character that represents the product o Ex The character might be animated Mr Clean the GEICO Gecko or the Zappos Zappets or real perky Progressive Insurance spokeswoman Flo the E TRADE babies and Ronald McDonald Technical Expertise o Show company expertise at making the product o Ex Natural foods maker Kashi shows its buyers carefully selecting ingredients for its products and Jim Koch of the Boston Beer company tells about his many years of experience in brewing Samuel Adams beer Scientific Evidence brand s Testimonial o Present survey or scientific data showing that the brand is better than other o Ex For years Crest toothpaste has used scientific evidence to convince buyers that Crest is better than other brands at fighting cavities o Highly believable or likeable source endorsing the product o Ex Subway s spokesman Jared is a customer who lost 245 pounds on a diet of Subway sandwiches Or it might be a celebrity