Post on 28-Dec-2015
Promotion mixWeek-9
Lecture Hour
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ConsumerProducer Agent Wholesaler Retailer
Producer
Producer
Producer
Wholesaler Retailer Consumer
Retailer Consumer
Consumereg Insurance
eg A pint of beer (UK)
eg Most supermarket goods
eg Imported goods
A revision-Consumer Channels
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Producer Industrialcustomereg High value, complex products
Producer Industrialdistributoreg Components via Radio Spares
Industrialcustomer
Producer Agent Industrialcustomer
Producer AgentIndustrialdistributor
Industrialcustomer
Industrial Channels
Supply chain management: Production
How many items to produce, materials lead times Transportation
Mode, e.g. road, rail, air etc. Facility
Location of factory, warehouse etc. Inventory
How much stock, materials, work-in-progress etc. Communication
Systems for orders, billing, stock control, payment etc.
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Tangible Products
Which is better?
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Services Distribution
Services are consumed at point of production:
Both provider and consumer are present People are part of the service
Consider: How to make service easily available to target
market How to maintain service quality if intermediaries
are used
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Knowledge Vs Performance
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Communication
Firms communicate both internally and externally
Customers, suppliers, staff, channels, shareholders, other stakeholders e.g:
Obtain approval for policies/activities Encourage favourable attitudes Want them to ‘buy’ e.g. products, services, plans
Need to understand current perceptions and attitudes for effective communication
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Communication Planning
Set objectives Identify target audienceDecide message and methodTimingEvaluation and controlBudget
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AIDA Hierarchy of Effects
Innovation - Adoption
Cognitive (Learn)
Attention
Awareness
Knowledge
Awareness
Affective
(Feel)
Interest
Desire
Liking
Preference
Conviction
Interest
Evaluation Behaviour
(Do)
Action
Purchase
Trial
Adoption
Communication Planning
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Need to be clearly definedDetermine what you say, to whom and how
Some common objectives: Inform eg new product, new price/generate enquiries Alter or correct perceptions/attitudes Increase frequency of use Remind (about existing product) Present special offers Educate on how to use a product Build an image/establish connections Build customer loyalty To provide reassurance
Objectives
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Objectives
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Identify who the intended recipients are Consider their current perceptions, attitudes and knowledge
Different messages and media may be required for different target groups
e.g. Communication about a new product Channels and employees, more product-specific,
technical information; manuals, information sheets Consumers, more benefits-oriented; adverts, point-of-
purchase displays
Target Audience
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Choosing a Message
What to say (content) Rational, emotional, moral appeal
How to say it (structure and format) Order of presentation, conclude or leave open-
ended Words, pictures, people Tone / style, e.g. comedy, irreverent, factual etc.
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Message
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Timing
Communications need to be co-ordinated with the rest of the marketing activity eg
Product availability May wish to co-incide with related events eg
Sportswear during Olympics Turkeys at Christmas
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Setting the Promotion Budget
A variety of methods: Same as last year (plus or minus x%) What is affordable Percentage of sales Parity with competitors Objective and task
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Evaluation & Control
A system must be put in place to assess the success (or not) of a campaign, e.g.
Recall / brand awareness / brand attitude studies
Coupon returns/clicks Sales comparisons Complaints
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Marketing Communications Mix
The marketing communications mix comprises:
AdvertisingSales promotionPublic relations & publicityPersonal sellingDirect marketing
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Includes:TVnewspapersmagazines & periodicals
cinema radiobillboards & posters Internetother media
eg buses, taxis, petrol pumps
Advertising
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TV large audience see product-in-use sound and vision relaxing environment cable, satellite and digital provide scope to segment
expensive consumers may find commercials irritating
PVRs can screen out
Media Choice
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Cinemasimilar advantages to TVsmaller audiencesegmentation possibilities
often more welcome than TV ads (signals start of the programme)
Less regulation than TV
Media Choice
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Newspapers use of illustrations long copy large audience, regular purchasers
segmentation possibilities short life spans
Media Choice
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Magazines can integrate editorial with advertising
segmentation possibilities
long life spans leisure reading high readership compared to circulation
can involve audience ‘desert areas’ eg inside front, back pages
GlossyMags
Inside!That Ali G interviewWhy McDonald’swent bustOn the Paris catwalk
Media Choice
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Commercial radio growing in popularity sound only, but intimacy segmentation possibilities small, often passive audience
Media Choice
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Billboards and Posters high opportunity to see low cost segmentation possible short and long term possibilities
subject to weather environmental criticism vandalism, ‘adbusters’
Media Choice
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Internet growth medium consumers actively seeking information
can be interactive sound, pictures and words
segmentation possibilities
on-line shopping ‘pop-ups’ irritate
Media Choice
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Media SelectionCharacteristics of target audience
Media usage behaviour, exposure
BudgetCreative constraints
Best presentation of the message eg visuals, colour
Timing Seasonality of offering; cost of media at different times
Reach and frequency How wide message needs to be spread, and how often
Media Choice
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Sales Promotion
Generally short term incentives to stimulate sales people to sell, customers to buy/use
Growing in popularity: Quick response Easier targeting Consumers increasing deal-orientation Often easier to evaluate Aims to break down brand loyalty
e.g. Encourage product trial, brand switching Encourage new product trial
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Target Audience
Sales promotions can be aimed at:
Consumers Demand pull, incentive to purchase e.g. money off coupons, gifts, competitions
Channels, intermediaries Supply push, incentive to promote the particular product, increase stocks etc.
e.g. Increase bonuses, price discounts, competitions and gifts, co-operative advertising, point-of-sale materials
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Potential Disadvantages
Frequent offers may ‘cheapen’ the brand image
Encourages consumer promiscuity Consumers wait for the special offer and stockpile
Often used to meet ‘year end’ targets Reduces subsequent sales
Subsidises those who would have purchased anyway
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Internet Transactions
Business
Consumer
Business Consumer
B2B
e.g. auto industry
C2B
e.g. Priceline
B2C
e.g. Amazon
C2C
e.g. eBay
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Publishing One-way provision of information
Interaction, e.g On-line customer service Games, promotions
Transaction On-line purchasing
Integration Automated management of supply chain
Levels of On-Line Marketing
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Product What products, customer service to offer
Price Same, cheaper or higher than off-line Delivery charges
Promotion Internet only or include traditional Marketing communications mix decisions Affiliate marketing
Place In-house or outsource distribution logistics
The On-Line 4Ps
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B2B and B2C Electronic Commerce
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E-Commerce Business Models
Online direct marketing
Electronic tendering system
Name-your-own-price
Find-the-best-price
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E-Commerce Business Models
Affiliate marketing
Note the Sony logo at the top of this Web page www.howstuffworks.com
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E-Commerce Business Models
Viral marketing
Group purchasing
Online auctions
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E-Commerce Business Models
Product customization
Deep discounters
Membership
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E-Commerce Business Models
Bartering
online
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Benefits of E-Commerce
Benefits to organizations Makes national and international markets more
accessible Lowering costs of processing, distributing, and
retrieving information
Benefits to customers Access a vast number of products and services
around the clock (24/7/365)
Benefits to Society Ability to easily and conveniently deliver
information, services and products to people in cities, rural areas and developing countries.
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Limitations of E-Commerce
Technological Limitations Lack of universally accepted security standards Insufficient telecommunications bandwidth Expensive accessibility
Non-technological Limitations Perception that EC is unsecure Unresolved legal issues Lacks a critical mass of sellers and buyers
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consumers are multitasking
Source: PiperJaffray
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And…consumers don’t like ADS
Source: PiperJaffray
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Eight Types of Web sites for Advertising
Portals: most popular; best for reach but not targeting
Search: second largest reach; high advertising value
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Eight types of sites (continued)
Commerce: high reach; not conducive to advertising
Entertainment: large reach; strong targetability
Mall of Hawai’i
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Eight types of sites (continued)
Community: emphasize being a part of something; good for specific advertising
Communications: not good for branding; low targetability
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Eight types of sites (continued)
News/weather/sports: poor targetability
Games: good for very specific types of advertising
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What it is not: Forcing people to buy things they do not want Having ‘the gift of the gab’ Cheating, conning and lying
The interpersonal arm of the promotional mix: Two-way Communicate with end customers, channels, intermediaries
Represent the company to customers Represent customers to the company
Increasing emphasis on the concept of relationship marketing
Personal Selling
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Prospecting Finding / developing new customers
Communicating Communicate company/product information to customers
SellingServicing
e.g. Consult on problems
Customer relationship management e.g. major accounts in business-to-business
Information gathering Gather marketing intelligence; customer needs
The Role of Sales
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The Selling Process
Prospecting and qualifying Pre-approach Approach Presentation and demonstration Overcoming objections Closing Follow-up and maintenance
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Salesforce Management
Structure / deployment e.g. Geographical, product, market
Compensation Usually fixed + variable (OTE) e.g. Revenue, profit, product mix
Recruitment, selection, training Motivating & managing Evaluating performance
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Sales Force
Pros Two-way communication with customer
Build relationships
Speedy feedback
Often essential Flexible focusing/targeting
Cons Expensive Requires managerial infrastructure
Focus on volume / revenue can lead to short term, less profitable, approach
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Questions?
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