Final Exam Notes I Chapter 12 Promotions and Advertising A Promotions 1 Promotional Mix a Advertising any paid form of personal or Nonpersonal presentation and promotion of ideas goods or services by an identified sponsor b PR 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 c Personal Selling personal customer interactions by the firm s sales force for the purpose of making sales and building customer relationships d Sales Promotions short term incentives to encourage the purchase or sale of a product service e Direct Digital engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships 2 Promotions Mix Goals relationships a To persuasively communicate customer value and build customer b To deliver a clear consistent and compelling message c EX kit kat bar and taking a break Integrated Marketing Communications 3 Promotions Mix Strategies a Push strategy calls for using the sales force and trade promotion to push the product through channels producer promotes the product to channel members which in turn promote it to the final consumers b Pull strategy calls for spending a lot on consumer advertising and promotion to induce final consumers to buy the product creating a demand vacuum that pulls the product through the channel B Elements of Promotional Mix 1 Advertising a Key Characteristics i ii iii Paid Nonpersonal communication Identified sponsor b New trends in advertising i Narrowcasting TV advertising has 40 of spending but growth is stagnated a Due to technology allowing marketers to better understand where people get their entertainment and how they behave they are now able to target their advertising far more effectively b Goes hand in hand with niche marketing c EX Netflix and Facebook knowing what you like and therefore suggesting similar things for you ii Madison Vine merging entertainment and advertising a EX Coca Cola making their product pronounced by being only red thing on the judge s table b Product placement 1 c Shows promoting certain products c Major decisions in advertising i Objectives setting a Informative advertising 1 Build primary demand 2 Good for introducing a new product category b Persuasive advertising 1 Build secondary demand preference 2 Good for direct or indirect brand comparisons c Reminder Advertising 1 Increase frequency of purchase 2 Good for mature products brands EX ESPN commercial ii Budget decisions a Affordable Method 1 Commonly used by small businesses 2 Spending money on what we can afford b Percentage of Sales Method 1 Taking sales and figuring out how much money do we need to spend on advertising 2 For every dollar we have we re going to spend x on advertising c Competitive Parity Method 1 Taking a look at what s happening with competitors in your industry 2 Lazy method of doing what others are doing d Objective and Task Method 1 For large companies this is probably the best way to budget advertising expenditures 2 3 step process Define specific objectives Determine which tasks will help you achieve those objectives Estimate the costs of each task a Positioning strategy Big Idea compelling creative concept b Different ways of looking at the Big Idea 1 Unique Selling Proposition USP Rosser Reeves Bates 141 purpose of advertising is to SELL 2 Inherent Drama Leo Burnett Leo Burnett Worldwide combining emotions with a brand Pillsbury Doughboy and Tony the Tiger 3 Brand Image David Ogilvy Ogilvy Mather c Ad Execution Styles 1 Slice of life showing typical people using the product in a normal setting McDonalds 2 Lifestyle showing how the product fits with a particular lifestyle Red Bull 3 Fantasy creates a fantasy around the product or its use 2 iii Message decisions 4 Mood image build mood or image around a product beauty love serenity 5 Musical shows someone singing about a product 6 Personality symbol character that represents the product 7 Technical expertise illustrate company expertise 8 Scientific evidence present survey or scientific data showing that the brand is better than other brands 9 Testimonial highly believable or likeable source endorsing the product Consumer Generated Messages I m into nuggets y all McDonald s commercial d Advertising builds on models of consumer behavior 1 Moderate Incongruity the middle ground in between too easy and too hard 2 Maslow s hierarchy of needs iv Media decisions a Key concepts 1 Media Medium television radio print digital 2 Media Vehicles network v cable channel specific show sports illustrated v guns and ammo 3 Media Scheduling continuity flighting pulsing 4 Reach percentage of target market exposed to ad during a given period of time 5 Frequency number of times a person in the target market is exposed to ad 6 Media impact qualitative value of an exposure through a given medium combination of reach and frequency Advertising Evaluation a Communication effects b Sales and Profit effects 2 Public Relations PR advertising a Building good relations with the company s various publics very similar to Obtain favorable publicity Build up a good corporate image Handling unfavorable rumors stories and events EX TNT we add drama commercial b Public relations tools i Press release news 3 v i ii iii ii iii iv v vi vii Press conferences Special events Exclusives interviews Public service community involvement Buzz marketing Corporate websites c Merging of advertising and PR EX Chevy sonic 3 Personal Selling a Salesperson covers a wide range of positions from order takers to order getters b Salespeople have multiple tasks i ii iii Create sales Build and maintain relationships Boundary spanning a Educate customers represent the company b Bring information to the company represent the customers c Major steps in the Selling Process i 1 Prospecting and Qualifying a Obtain leads and scout out qualified prospects b Use 1 Referrals 2 Directories 3 Cold calling c Quality leads through a screening process ii 2 Preapproach a Learn as much as possible about a prospective customer before making a sales call b Establish your call objectives 1 To make an immediate sale 2 To gather information only 3 To qualify the prospect c Decide on the best approach how and when to contact the person 3 Approach iii a Salesperson meets the customer for the first time b Iron out the