Test 3 Price Incentive Sales Promotion Integrated Marketing Communication A management concept designed to make all aspects of marketing communication work together as a unified force o Advertising o Sales Promotion o Public Relations Sales Promotion A direct inducement which offers an extra value or incentive for the product to the sales force distributors or the final consumer with the primary objective of creating an immediate sales o Incentive to behave in a certain way Short term behavior oriented o Advertising vs Sales Promotion Creates an image over time Relies on emotional appeals Advertising to the heart Sales promotion to the wallet Contributes somewhat to profitability Adds tangible value Broad long term standpoint o Sales promotion vs Advertising Creates immediate action Rational appeals Contributes significantly to short term profitability Adds tangible value o Coordination Promotions Awareness before promotion Speak with one voice Shaping Behavioral Learning Future behavior is determined by reinforcement accompanying past behavior Promotional tools act as reinforcers along with product performance the primary reinforcement to increase the probability of repeat purchase Sales promotion can t save a bad product products performance is key The process of learning a complex behavior by learning a series of successive approximations of the final behavior Consumers don t change their minds over night gradual shift Errors in Implementation o Improper fading of promotional incentives o Overuse of promotional incentives o Ex Dominos pizza kids don t like specialty pizza Buy specialty pizza get a medium 1 topping for 5 Price Oriented Promotional Tools Samples o Product given to consumer free of charge o Opportunity to try the product before making a purchase Eliminate financial risk Eliminate inconvenience Samples Effective When o Brand is clearly superior o Product comes in limited varieties o Purchase cycle is short 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 Money Refunds Rebates A partial refund following a purchase o Consumer purchase product o Mail in proof of purchase o Refund sent at a later time Redemption problems Delay of reinforcement Effort required I Get What I Don t Have to Pay for It Added Value Sales Promotion Added Value Promotions Product is sold at full price Consumers get more for their money Doesn t reduce price value ratio Premium purchase Objective of Premiums o An extra item offered at a low price or free as an extra incentive to A game where participants have an equal chance of winning a prize but 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 o In package o In store o Package itself o Mail o Online Sweepstakes make no payment to enter o Increases engagement o Increases awareness Lottery Contest Sweepstakes with a charge to enter Illegal in most situations Donations from non profit organizations Winners selected based on skill Charge to enter Promotions to Retailers More money spent than on consumer promotions o Objectives Retail incentive to push vs pull product Maintain or increase distribution Maintain or expand shelf space Preempt competition Change consumer purchase patterns o Types of Retail Promotions Buying allowances Temporary price reductions From manufacturer to retailer Advertising allowances co operative advertising Payments by the manufacturer to the retailer Funding of the retailer s advertising of the product Contests Point of Purchase P O P Sweepstakes Promotional materials 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 P O P Objectives Increase consumer learning Increase purchase behavior Low cost production and implementation Ease of evaluation o Good P O P for Retailers Monetary incentive Tied to other items Easy to set up I Want You to Want Me 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 Differences between Advertising and Public Relations Goals o Advertising Inform persuade and remind target to buy specific brands of products o Public Relations Develop understanding and goodwill Favorable attitudes Credibility Cost o Pr Seen as more credible o Major advertising costs media time and space o Major PR costs non media Control Advertising More control over message PR less control over message Interest Advertising Editorial interest not very important Public Relations Critical to success Personnel o Advertising More likely to have a business background o Public Relations More likely to have a journalism back ground Similarities between Advertising and Public Relations Specific objectives Stimulate interest in a target group Research based situation analysis Detailed knowledge of media Reasons to Use Public Relations Relatively inexpensive o Compared to advertising Cuts through advertising noise Highly credible Develop new sales leads Difficult to reach some publics Corporate Image Advertising An umbrella category of advertising that is for the benefit of the overall company image rather than for individual products o Corporate image advertising relationships to public relations Share the same objectives as public relations Understanding and goodwill Paid time provides greater control over message and media o Corporate Image and Product Advertising Differences Corporate image is less tangible than product attributes Upper management involvement Corporate Image and Product Advertising Similarities Direction Overall image o For company Not specific products Tangibility o Gain attention o Involve the audience o Build credibility o Get action Types of Corporate Advertising Messages o General Image Designed to enhance the basic image of the company Creates a favorable image in the financial community Attitude or behavior with the public on a specific issue Often controversial o Financial o Advocacy o Recruiting Presents the company favorably to prospective employees o Special situation Corporate giving Corporate advertising
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