The last factor that affects the promotional mix is whether to use a push or a pull promotional strategy. Manufacturers may use aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell their merchan- dise. This approach is known as a push strategy (see Exhibit 16.5). The wholesaler, in turn, must often push the merchandise forward by persuading the retailer to handle the goods. The retailer then uses advertising, displays, and other forms of promotion to convince the consumer to buy the “pushed” products. This concept also applies to services. For example, the Jamaican Tourism Board targets promo- tions to travel agencies, which, in turn, tell their customers about the benefits of vacationing in Jamaica.
At the other extreme is a pull strategy, which stimulates consumer demand to obtain product distribution. Rather than trying to sell to the wholesaler, the manufac-
turer using a pull strategy focuses its promotional efforts on end consumers or opin- ion leaders. For example, Procter & Gamble recently spent $100 million on an ad- vertising campaign to promote its new toothpaste. P & G’s new Crest Pro-Health
claims to deliver everything a consumer could want in one tube—it sup- posedly protects against gingivitis, plaque, cavities, sensitivity, stains, and it freshens breath. The theme of the campaign, targeted to the information-seeking customer, is “Healthy, beautiful smiles for life.”21 Consumers responded positively to the campaign and began demand- ing the product from their retailer. The retailer ordered the merchandise from the wholesaler. The wholesaler, confronted with rising demand, then placed an order for the “pulled” merchandise from the manu facturer. Consumer push strategy
A marketing strategy that uses ag- gressive personal selling and trade advertising to convince a whole- saler or a retailer to carry and sell particular merchandise.
pull strategy
A marketing strategy that stimu- lates consumer demand to obtain product distribution.
push strategy
A marketing strategy that uses ag- gressive personal selling and trade advertising to convince a whole- saler or a retailer to carry and sell particular merchandise.
pull strategy
A marketing strategy that stimu- lates consumer demand to obtain product distribution.
Exhibit 16.5
Push Strategy versus Pull
Strategy Consumer
buys from retailer
Pull strategy
Orders to manufacturer
Wholesaler demands product from manufacturer Push strategy
Orders to manufacturer
Retailer promotes to consumer Wholesaler
promotes to retailer Manufacturer
promotes to wholesaler
Retailer demands product from wholesaler Consumer
demands product from retailer Manufacturer
promotes to consumer
© VICKI BEAVER
demand pulled the product through the channel of distribution (see Exhibit 16.5). Heavy sampling, introductory consumer advertising, cents-off cam- paigns, and couponing are part of a pull strategy.
Procter & Gamble flooded dental offices with prod- uct samples and informational materials in hopes of generating favorable testimonials from users.
Similarly, Splenda No Calorie Sweetener offered free samples, recipes, and a coupon to potential consumers who tried the product.22
Rarely does a company use a pull or a push strategy exclusively. Instead, the mix will emphasize one of these strategies. For example, pharmaceutical companies generally use a push strategy, through personal selling and trade advertising, to promote their drugs and therapies to physicians. Sales presentations and advertise- ments in medical journals give physicians the detailed information they need to prescribe medi- cation to their patients. Most pharmaceutical companies supplement their push promotional strategy with a pull strategy targeted directly to potential patients through advertisements in consumer magazines and on television.
REVIEW LEARNING OUTCOME
Describe the factors that affect the promotional mix
LO 7
% Advertising
% Public Relations
% Sales Promotion
% Personal Selling Promotional
Mix Push or
pull strategy
Nature of the product
Funds available
Type of buying decision
Target market character-
istics Product
life cycle
Review and Applications
Discuss the role of promotion in the marketing mix. Promotion is communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response. Promotional strategy is the plan for using the elements of promotion—advertis- ing, public relations, sales promotion, and personal selling—to meet the firm’s overall objectives and marketing goals. Based on these objectives, the elements of the promotional strategy become a coordinated promotion plan. The promotion plan then becomes an integral part of the total market- ing strategy for reaching the target market along with product, distribution, and price.
1.1 What is a promotional strategy? Explain the concept of a competitive advantage in relation to promotional strategy.
Describe the communication process. The communication process has several steps. When an individual or organization has a message it wishes to convey to a target audience, it encodes that message using language and symbols familiar to the intended receiver and sends the message
LO 1 LO 1
LO 2 LO 2
<people interviewed by Sara Lee Corp. be- fore it innovated Kiwi shoe polish media contacts
generated by Ab-
solut’s Porsche taxis in Germany >
<blogs tracked by Technorati percentage of blogs updated weekly >
<percentage of e-mail messages that are spam iPods sold per minute dur- ing the 2005 Christmas season>
<cost of Procter &
Gamble’s recent advertising cam- paign for Crest Pro-Health
<languages in which Google and Sony offered
“The Sony Ericsson Da Vinci Code Trail”
percentage of increased traf- fi c at Sony’s Web site during the promotion >
<ticket sales for The DaVinci Code’s opening weekend
3,500
10
70
100
$100 million
30 22
15 million 112.8 million
$77 billion
Promotional Planning for Competitive Advantage Chapter 16
through a channel of communication. Noise in the transmission channel distorts the source’s in- tended message. Reception occurs if the message falls within the receiver’s frame of reference. The receiver decodes the message and usually provides feedback to the source. Normally, feedback is direct for interpersonal communication and indirect for mass communication.
2.1 Why is understanding the target market a crucial aspect of the communication process?
Explain the goals of promotion. The fundamental goals of promotion are to induce, modify, or reinforce behavior by informing, persuading, and reminding. Informative promotion explains a good’s or service’s purpose and benefits. Promotion that informs the consumer is typically used to increase demand for a general product category or to introduce a new good or service.
Persuasive promotion is designed to stimulate a purchase or an action. Promotion that per- suades the consumer to buy is essential during the growth stage of the product life cycle, when competition becomes fierce. Reminder promotion is used to keep the product and brand name in the public’s mind. Promotions that remind are generally used during the maturity stage of the product life cycle.
3.1 Why might a marketing manager choose to promote his or her product using persuasion?
Give some current examples of persuasive promotion.
3.2 Choose a partner from class and go together to interview the owners or managers of sev- eral small businesses in your city. Ask them what their promotional objectives are and why.
Are they trying to inform, persuade, or remind customers to do business with them? Also determine whether they believe they have an awareness problem or whether they need to persuade customers to come to them instead of to competitors. Ask them to list the charac- teristics of their primary market, the strengths and weaknesses of their direct competitors, and how they are positioning their store to compete. Prepare a report to present in class summarizing your findings.
Discuss the elements of the promotional mix. The elements of the promotional mix include adver- tising, public relations, sales promotion, and personal selling. Advertising is a form of impersonal, one-way mass communication paid for by the source. Public relations is the function of promotion concerned with a firm’s public image. Sales promotion is typically used to back up other compo- nents of the promotional mix by stimulating immediate demand. Finally, personal selling typically involves direct communication, in person or by telephone; the seller tries to initiate a purchase by informing and persuading one or more potential buyers.
4.1 As the promotional manager for a new line of cosmetics targeted to preteen girls, you have been assigned the task of deciding which promotional mix elements—advertising, public relations, sales promotion, and personal selling—should be used in promoting it.
Your budget for promoting the preteen cosmetics line is limited. Write a promotional plan explaining your choice of promotional mix elements given the nature of the product, the stage in the product life cycle, the target market characteristics, the type of buying decision, available funds, and the use of a pull or push strategy.
Discuss the AIDA concept and its relationship to the promotional mix. The AIDA model outlines the four basic stages in the purchase decision-making process, which are initiated and propelled by promotional activities: (1) attention, (2) interest, (3) desire, and (4) action. The components of the promotional mix have varying levels of influence at each stage of the AIDA model. Advertising is a good tool for increasing awareness and knowledge of a good or service. Sales promotion is effective when consumers are at the purchase stage of the decision-making process. Personal selling is most effective in developing customer interest and desire.
5.1 Discuss the AIDA concept. How do these different stages of consumer involvement affect the promotional mix?
5.2 How does a Web site’s ease of use affect its ability to create attention, interest, desire, and action? Visit the kitchen and bath pages of Kohler’s Web site (http:// www.kohler.com) and determine how successful the company is at moving consumers through the AIDA process.
LO 3 LO 3
LO 4 LO 4
LO 5 LO 5
Promotion and Communication Strategies
Discuss the concept of integrated marketing communications. Integrated marketing communi- cations is the careful coordination of all promotional messages for a product or service to assure the consistency of messages at every contact point where a company meets the consumer—
advertising, sales promotion, personal selling, public relations, as well as direct marketing, packaging, and other forms of communication. Marketing managers carefully coordinate all promotional activities to ensure that consumers see and hear one message. Integrated marketing communications has received more attention in recent years due to the proliferation of media choices, the fragmentation of mass markets into more segmented niches, and the decrease in advertising spending in favor of promotional techniques that generate an immediate sales response.
6.1 Discuss the importance of integrated marketing communications. Give some current examples of companies that are and are not practicing IMC.
6.2 What do you think is the role of Hallmark’s Web site (http://www.hallmark.com) in the company’s integrated marketing communications plan? What seems to be the marketing function of the site? Do you think the site is effective?
Describe the factors that affect the promotional mix. Promotion managers consider many factors when creating promotional mixes. These factors include the nature of the product, product life-cycle stage, target market characteristics, the type of buying decision involved, availability of funds, and feasibility of push or pull strategies. Because most business products tend to be custom-tailored to the buyer’s exact specifications, the marketing manager may choose a promotional mix that relies more heavily on personal selling. On the other hand, consumer products are generally mass produced and lend themselves more to mass promotional efforts such as advertising and sales pro- motion. As products move through different stages of the product life cycle, marketers will choose to use different promotional elements. For example, advertising is emphasized more in the introduc- tory stage of the product life cycle than in the decline stage. Characteristics of the target market, such as geographic location of potential buyers and brand loyalty, influence the promotional mix as does whether the buying decision is complex or routine. The amount of funds a firm has to allocate to promotion may also help determine the promotional mix. Small firms with limited funds may rely more heavily on public relations, whereas larger firms may be able to afford broadcast or print adver- tising. Last, if a firm uses a push strategy to promote the product or service, the marketing manager may choose to use aggressive advertising and personal selling to wholesalers and retailers. If a pull strategy is chosen, then the manager often relies on aggressive mass promotion, such as advertis- ing and sales promotion, to stimulate consumer demand.
7.1 Explain the difference between a “pull” and a “push” promotional strategy. Under what conditions should each strategy be used?
7.2 Use Radioguide.com (http://www.radioguide.com) to find a listing of radio Web sites in your area. View several of the stations’ sites and compare the promotions featured. What conclusions can you draw about the target market of each station based on the types of promotions they are currently running? Would any of the promotions entice you to tune to a station that you normally don’t listen to?
7.3 Visit http://www.teenresearch.com. What research can this company offer about the size and growth of the teen market, the buying power of teenagers, and their buying hab- its? Why might these statistics be important to a company targeting teenagers in terms of marketing communications and promotion strategy?
Key Terms LO 6 LO 6
LO 7 LO 7
AIDA concept 486
channel 479 communication 477 competitive advantage 476
corporate blogs 481
decoding 479 encoding 479
feedback 480 integrated marketing
communications (IMC) 488 interpersonal communication 477
mass communication 477
noise 479
noncorporate blogs 481
promotion 476
promotional mix 483
promotional strategy 476
pull strategy 493
push strategy 493
receiver 479 sender 478
Promotional Planning for Competitive Advantage Chapter 16
Exercises
APPLICATION EXERCISE 1
Many people are not aware of the rationale behind certain advertising messages. “Why do Infiniti ads show rocks and trees instead of automobiles?” “If car safety is so important, why do automobile ads often show cars skidding on wet, shiny surfaces?” “Target’s ads are funky, with all the bright colors and product packaging, but what’s the message?”
One way to understand the vagaries of the encoding process is to think of the popular board game Taboo by Hasbro. In this game, each team tries to get its members to guess a word without using obvious word clues. For example, to get the team to guess “apple,” you may not say such words as red, fruit, pie, cider, or core. Sometimes advertising is like Taboo in that advertisers are not allowed to use certain words or descriptions. For example, pharmaceu- tical companies are not permitted to make certain claims or to say what a drug treats unless the ad also mentions the potential side effects. Language choices are also limited in advertis- ing. To appreciate this, you can apply the Taboo game rules in an advertising format.23 Activities
1. Select a product from the list below, and then create a print advertisement or a television story- board for that product. As part of the exercise, give your product a brand name. Taboo words, vi- suals, and concepts are given for each product type. Taboo items cannot be present in your work.
Product Taboo Words, Visuals, and Concepts Deodorant Odor, underarm, perspiration, smell, sweat Pain reliever Pain, aches, fever, child-proof cap, gel
Soft drinks Sugar-free, refreshing, thirst, swimwear, any celebrity
2. Now create a second ad or storyboard for your product. This time, however, you must use all the words, visuals, and concepts that are listed in the right column.
Product Must-Use Words, Visuals, and Concepts Deodorant A romantic couple, monster trucks
Pain reliever A mother and child, oatmeal, homework Soft drinks A cup of coffee, cookies, birthday cake, wine APPLICATION EXERCISE 2
An important concept in promotion is semiotics, or the study of meaning and meaning- producing events. An understanding of semiotics can help you not only to identify objects (denota tion) but also to grasp the utility of images and associations (connotation). By manipu- lating connotations of objects in advertising, you can create, change, or reinforce images for products. Thus, semiotics is a powerful tool for brand management and promotion.24 Activities
1. Make a list of ten images and associations that come to mind for each of the following items:
baseball, vinyl record album, spoon, rubber band.
2. Look through magazines and see if you can find print advertisements that include each of the items (baseball, vinyl record album, spoon, rubber band) in a supporting role. What seems to be the message of each ad? How does the item help create or reinforce an image for the product being sold in the ad?
3. Think of an everyday object of your own. What are its likely connotations? For example, a dog in a car might signal a family vehicle, but a dog also connotes loyalty, “man’s best friend,”
and dependability. What images and associations are likely with your item? Make a list of as many as you can.
4. Now use your object and list of associations to create an image for another product. Think of the likely connotations your object will have for a certain target market and how such con- notations can support a brand image. For example, if your everyday object is a candle, you might choose lingerie for your product, based on a candle’s romantic connotations.
Promotion and Communication Strategies
ETHICS EXERCISE
Integrated Marketing Solutions is a consumer-products marketing services firm. Currently, the firm is handling the launch of a new book for one of its publishing clients. The campaign includes advance review copies for key book reviewers, “Coming Soon” posters for booksell- ers, an author book-signing tour, and several television interviews. Everything has been pro- duced and scheduled for release next week. Today, Jane Kershaw, the account executive, has learned that although the book received numerous favorable reviews, the review quoted on all of the promotional materials is fabricated.
Questions
1. What should Jane do? Why?
2. What does the AMA Statement of Ethics say about accuracy in promotional materials? Go to http://www.marketingpower.com and review the code. Then, write a brief paragraph describing how the AMA Statement of Ethics relates to this issue.
Case Study: Wicked
WICKED AWESOME! MUSICAL ENCHANTS RECORD CROWDS AFTER ROCKY START
When the curtains first lifted on the Broadway musical Wicked, it appeared that audiences had been scared away from the box office. The Gershwin Theater was rarely full, and a production that had cost over $14 million posted advance ticket sales of only $9 million. Crippled by cost overruns, cast changes, song rewrites, and a 2003 start date that was much later than pro- jected, excitement and enthusiasm waned for what was once a much-anticipated show.
Based on Gregory Maguire’s best-selling 1995 novel of the same name, the story is a pre- quel to Frank Baum’s 1939 classic, The Wizard of Oz. The musical examines the lives of two teenage witches, Glinda and Elphaba, and wonders which one is truly evil. Glinda, a beautiful, ambitious, and popular blond, grows up to become the Good Witch; Elphaba, a green-skinned, intelligent, free-spirited rebel, develops into the nefarious Wicked Witch of the West. Elaborate sets, lighting, and costumes and a score by Academy Award–winning songwriter Stephen Schwartz did not impress the New York Times, however. Its scathing review claimed, “There’s trouble in Emerald City . . . [it’s] a sermon of a musical.”
Unfazed, Wicked producer Marc Platt, a former Universal Pictures executive, never lost faith in his production. He remained convinced that if he could just get people in the door, they would leave completely captivated by what he considered a truly exceptional experience.
So he cut ticket prices by 30 percent and watched as patrons began to make repeat ticket purchases during intermission. After the shows, swarms of enthralled teenage girls began to gather outside the stage door in hopes of meeting the cast.
As the target market emerged before his eyes, Platt leveraged his Hollywood experience to turn Wicked into a musical marketing machine. The hot ticket sales during show intermis- sions indicated that the show’s success would hinge on word-of-mouth referrals from the show’s core audience—teenage girls. To get more of them talking, Platt and the marketing team published feature articles on the show’s Web site and seeded Internet chat rooms with Wicked-related topics. An all-out promotions blitz ensued.
Wicked lined up character endorsement deals with makeup manufacturer, Stila, and sent hot new stars Kristin Chenoweth and Idina Menzel to Sephora stores to give makeovers to teen fans with Glinda facial glitter and Elphaba lipstick. In an interesting twist on American Idol, Wicked karaoke contests at malls served as fake auditions that awarded real tickets to the most passionate fans. Radio promos in New York and Chicago were supported by advertising at Macy’s and in Elle Girl magazine for a Halloween campaign that lasted a month.
As the show became profitable, two U.S. tours were launched. The shows routinely sell out, and yearly revenues are now close to $200 million. Tickets to the show on Broadway now command a record-tying $110, and the show’s take is about $1.3 million a week in New York alone. Mike Isaacson, vice president of the Fox Theatre in St. Louis, sold an amazing $1.5 mil- lion worth of tickets a mere 48 hours after they went on sale. “This show is a rocket because it’s attracting people from teenagers to grandparents,” he mused.
© AP PHOTO/KATHY WILLENS