Lecture Basic Marketing: A global-managerial approach: Chapter 14 - William D. Perreault, E. Jerome McCarthy

When you finish this chapter, you should: Know the advantages and disadvantages of the promotion methods a marketing manager can use in strategic planning, know how the communication process affects promotion planning, understand how direct-response promotion is helping marketers develop more targeted promotion blends,...

Chapter 14:    Promotion — Introduction to Integrated Marketing Communications For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Chapter 14 Objectives When you finish this chapter, you should 1.  Know the advantages and    6.  Understand how new customer­ disadvantages of the promotion  initiated interactive communication  methods a marketing manager can  is different use in strategy planning   7.  Know how typical promotion plans  2.  Understand the integrated marketing  are blended to get an extra push  communications concept and why  from middlemen and help from  most firms use a blend of different  customers in pulling products  promotion methods through the channel 3.  Understand the importance of    8.  Understand how promotion blends  promotion objectives.  typically vary over the adoption  curve and product life cycle 4. Know how the communication  process affects promotion planning   9.  Understand how to determine how  much to spend on promotion  5.  Understand how direct­response  efforts promotion is helping marketers  develop more targeted promotion  10.  Understand the important new  blends terms 14­2 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Basic Promotion Methods Target Market Product Place Personal Selling Promotion Mass Selling Advertising Price Sales Promotion Publicity Exhibit 14­1 14­3 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Sales Promotion Activities Aimed at final consumers or users Contests Coupons Aisle displays Samples Trade shows Point­of­purchase   materials Banners and    streamers Trading stamps Sponsored events Exhibit 14­2 14­4 Aimed at middlemen Price deals Promotion allowances Sales contests Calendars Gifts Trade Shows Meetings Catalogs Merchandising aids Aimed at company’s own sales force Contests Bonuses Meetings Portfolios Displays Sales aids Training materials For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Promotion and the Demand Curve Price   D1 D2 Quantity Promotion efforts may be  targeted to make demand  for the firm’s products  more inelastic and so  more resistant to  counter­moves by the  competition A To be more inelastic Exhibit 14­3A 14­5 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Promotion and the Demand Curve Price D D Quantity Promotion efforts  may be targeted to  increase the  demand  for the firm’s  products B to the right Exhibit 14­3B 14­6 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Promotion and the Demand Curve Price D D Quantity Promotion efforts may  be targeted to both  increase  demand for  the firm’s products and  to make demand more   inelastic C Both to the right and more inelastic Exhibit 14­3C 14­7 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Promotion and the Demand Curve Price Price Price D1 D D2 14­8 D D Quantity A To be more elastic Exhibit 14­3 D Quantity B to the right Quantity C Both to the right and more elastic For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Promotion and the AIDA Model Promotion Objectives Informing Persuading Reminding Adoption Process AIDA Model Awareness Interest Evaluation Trial Decision Confirmation Attention Interest { } Desire } Action Exhibit 14­4 14­9 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Traditional Communication Model Source Encoding Message channel Decoding Receiver Noise Feedback Exhibit 14­5 14­10 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Message Interpretation Encoder The same  message may be  interpreted  differently by the  encoder and the  decoder Common frame of reference Decoder Exhibit 14­6 14­11 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Customer-Initiated Interactive Communication Receiver (Customer) Source’s Message Noise Select a topic Search Message channel Exhibit 14­7 14­12 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Push-Pull Strategies Producer’s Promotion Blend Exhibit 14­8 14­13 Wholesaler Promotion Push Promotion to Channel Members Wholesaler Promotion Push Retailer Promotion Push Business Customer Pull Promotion to Final Customers Promotion to Business Customers Personal Selling, Sales Promotion, Advertising, Publicity Final Consumer Pull For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill The Adoption Curve Innovators (3-5%) Percent Adoption 90 Early Adopters (10-15%) Early Majority (34%) Late Majority (34%) Laggards/ Nonadopters (5-16%) 50 20 Exhibit 14­9 14­14 Time For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Setting the Promotion Budget ???? ???? ???? ???? ???? 14­15 Percentage Percentage of of Sales Sales Match Match Competitors Competitors Per Per Unit Unit Uncommitted Uncommitted Resources Resources Task Task Method Method For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Key Terms Promotion Personal Selling Mass Selling Advertising Publicity Sales Promotion Sales Managers Advertising Managers Public Relations Sales Promotion Managers Integrated Marketing Communications AIDA Model Communication Process Source 14­16 Receiver Noise Encoding Decoding Message Channel Pushing  Pulling Adoption Curve Innovators Early Adopters Early Majority Late Majority Laggards    Nonadopters Primary Demand Selective Demand Task Method For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill ... Innovators ( 3-5 %) Percent Adoption 90 Early Adopters (1 0-1 5%) Early Majority (34%) Late Majority (34%) Laggards/ Nonadopters ( 5-1 6%) 50 20 Exhibit 14 9 14 14 Time For use only with Perreault and McCarthy. .. Message Noise Select a topic Search Message channel Exhibit 14 7 14 12 For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Push-Pull Strategies... Displays Sales aids Training materials For use only with Perreault and McCarthy texts © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Promotion and the Demand Curve Price   D1 D2 Quantity