ADV3008 Final Exam Review Price Incentive Sales Promotion Integrated Marketing Communication a management concept designed to make all aspects of marketing communication work together as a unified force Advertising Public relation Sales promotion Sales Promotion a direct inducement which offers an extra value or incentive for the product to the sales force distributors or the final customer with the primary objective of creating an immediate sale Incentive to behave in a certain way Short term behavior oriented Advertising vs Sales Promotion Intangibles Creates an image over time Relies on emotional appeals o Advertising to the heart how you feel about the brand o Sales promotion to the wallet what you do Contributes somewhat to profitability creates demand for product Adds intangible value Sales Promotion vs Advertising Wants you to act NOW Complements not competes Creates immediate action Rational appeals BOGO Contributes significantly to short term profitability Adds tangible value reduces price and adds value Coordinating Promotions Work together KEY Awareness before promotion advertising and sales work together Speak with one voice consistency in communication Behavioral Learning Future behavior is determined by reinforcement accompanying bad behavior Promotional tools act as reinforcers along with product performance the primary reinforcement to increase the probability of repeat purchase Don t rely on promotions to help out a bad product Shaping the process of learning a complex behavior by learning a series of successive approximations of the final behavior Errors in Implementation o Improper fading to incentives o Overuse of promotional incentives Price Oriented Promotional Tools Samples o Product given to customer free of charge o Opportunity to try the product before making a purchase eliminate financial risk eliminate inconvenience of buying something you may not like Samples effective when o Brand is clearly superior Coke Zero vs Diet Pepsi o Product comes in limited varieties o More samples more effective o Purchase cycle is short less likely to forget samples o Attitudes or behaviors must be created or changed Coupons certificates presented to a dealer that give the bearer a stated savings on the purchase of a product Likely users are current users of the product o Retains current users o Encourages brand switching o Increases in home inventory o Lengthens purchase cycle helps decrease chance of switching brands Money refunds Rebates a partial refund following a purchase Consumer purchases a product Mail in proof of purchase Refund sent at later time Redemption problems delay of reinforcement effort required Added Value Promotions Added Value Sales Promotion Product is sold at full price Consumers get more for there money Doesn t reduce price value ratio Premium an extra item offered at a low price or free as an extra incentive to purchase Bottle cap codes add value Objectives of premiums o Encourage brand switching o Trade up to larger size o Increase repeat purchase o Put a long term message in front of the consumer Methods of distribution easy to distribute o In package o In store o Package itself o Mail o Online Sweepstakes a game where participants have an equal chance of winning a prize but make no payment to enter Increases engagement Increases awareness Lottery Contest Sweepstakes with a charge to enter Illegal in most situations exceptions government and non profit Donations from non profit organizations Winners selected based on skill Charge to enter Promotions to Retailers more money spent than on consumer promotions Objectives o Retail incentive to push vs pull a product o Maintain or increase distribution o Maintain or expand shelf space o Preempt competition o Change consumer purchase patterns Push manufacturer gives retailer and incentive to buy product Pull to pull the product through the consumer Types of retail promotions o Buying allowances temporary price reductions from manufacturer to retailer Savings are passed on o Advertising allowances co operative advertising payments by the manufacturer to the retailers funding of the retailer s advertising of the product o Contests o Sweepstakes o Point of Purchase P O P promotional material placed at the point of purchase o Types of P O P outside signs window displays counter displays display racks banners posters shelf talkers o End cap display huge boost in sales o P O P Objectives increase consumer learning increase purchase behavior low cost production and implantation ease of evaluation o Good P O P for Retailers monetary incentive tied to other items o Easy to set up Public Relations Public Relations PR is NOT free advertising A management function that formulates and executes a program of action to earn the understanding and goodwill of its publics No control over timing delivery or substance Differences between Advertising and PR GOALS Advertising products PR o Inform persuade and remind target to buy specific brands of o Develop understanding and goodwill o Favorable attitudes o More emotional appeal less sales driven than advertising CREDIBILITY COST PR seen as more credible not bias Most advertising costs media time and space 90 of adv budget Major PR costs non media o Event development o Research o Media relations CONTROL Advertising PR o More control over message o Less credibility o Less control over message o More credibility Interest Advertising editorial interest not very important PR interest is critical to success Personnel people who work there o Advertising more likely to have a business background o PR more likely to have a journalism background Similarities between Advertising and PR Stimulate interest in target group o PR target public o ADV target market Research based situation analysis Detailed knowledge of media Specific objectives Reasons to Use Public Relations Relatively inexpensive compared to advertising not media Cuts through advertising noise clutter Highly credible Develop new sales leads Difficult to reach some publics lobbyist Corporate Image Advertising an umbrella of advertising that is for the benefit of the overall company image rather than for individual products BP ad oil spill Corporate image advertising relationships to public relations o Share the same objectives as public relations o Understanding and goodwill o Paid time provides greater control over message and media Corporate Image and Product Advertising Differences o Direction Corporate overall
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