Product promotion-strategy

Copyright © 2003 McGraw-Hill Australia Pty Ltd PPTs t/a Essential Marketing Skills by Rix
Slides prepared by Joe Rosagrata
Promotion Strategies
Chapter 9

What is a promotion?
 Promotion is the element in an
organisation’s marketing mix that
serves to inform, persuade and remind
the market about the organisation
and/or its products.
9-1

The promotional mix
 Personal selling: the presentation of a product
to a prospective customer by a firm’s sales
executive.
 Advertising: paid, non-personal mass
communication, in which the sponsor is
clearly identified.
9-2

The promotional mix (cont.)
 Sales promotion: demand-stimulating activity
designed to supplement advertising and co-
ordinate personal selling.
 Publicity: a non-paid form of advertising that
uses mass communication to stimulate
demand.
9-3

The Promotional Mix
 Public relations: a planned communication
effort by an organisation to contribute to
generally favourable attitudes and opinions
toward an organisation and its products.
9-4

Choosing the right form
of promotion
 Marketers need to consider:
• The target market.
• The nature of the product.
• The stage of the product’s life cycle.
• Money available for the promotion.
9-5

Reaching the target
market
 Marketers need to identify whom they are
trying to influence.
 Determine customer’s readiness to buy.
• Awareness
• Knowledge
• Liking
• Preference
• Conviction
• Purchase
9-6

Nature of the product
 Unit value of the product.
 Amount of product customisation.
 Amount of pre-sale and post-sale service
required.
9-7

Push vs pull strategy
 Push Strategy
• Producer creates demand for product.
• Aims promotional activity to channel member(s)
• Each channel member promotes to next channel
member
• Demand ‘pushed’ down distribution channel.
• Consumer influenced by retailer’s advertising.
9-8

(cont.)
 Pull Strategy
• Producer creates demand for product
• Aims promotional activity directly at the
consumer
• Consumer demands product from retailer
• Demand ‘pulled’ up the distribution
channel.
9-9

(cont.)
Producer Wholesaler Retailer Consumer
Producer Wholesaler Retailer Consumer
PUSH STRATEGY
PULL STRATEGY
Product flow Promotion effort
9-10

The promotional budget
 Percentage of sales method
• Company may determine past or anticipated sales
and apply a percentage of sales as the
promotional budget.
 All available funds
• Company uses all available funds on the
promotional campaign .
9-11

The promotional budget
(cont.)
 Matching the competition (also known as
competitive parity).
• Promotional expenditure based on market share of
competitors, or actual expenditure if known.
 Task or objective method
• Determine what tasks or objectives the promotion
must accomplish.
• Determine what it will cost to perform the task or
meet objective.
9-12

Skills of the sales person
 A good sales person requires various
attributes:
• Time management.
• Organising ability.
• Consulting skills.
• Communication skills.
• Problem-solving skills.
• Credibility (also a positive attitude).
9-13

Managing the sales team
 Recruitment and selection
• Decide who the right person is for the job
and what attributes and qualifications
they should have.
 Choose the right people
• Various methods used are interview,
references, psychological and aptitude
tests, also physical examinations.
9-14

(cont.)
 The induction
• A method used to familiarise a new employee
with their new working environment.
 The training
• Determine who should train new sales person.
• A training program should be developed to meet
company objectives which outline philosophy,
company and product overview.
9-15

(cont.)
 Sales people need:
• Coaching
∆Spending time with a sales person to observe and assist
with their work practice, outcomes and to develop
knowledge and skills.
• Motivation
∆Managers should find out what motivates an individual.
∆These include financial and non-financial rewards.
9-16

Compensation
 There are various forms of compensation:
• Straight salary.
• Straight commission.
• A third from of compensation used in
business is a combination of both methods.
This is used to motivate sales team
members with financial incentives.
9-17

Types of advertising
 Consumer versus business advertising
• Emotional and rational vs informational.
 Product versus institutional advertising
• Focus on particular product or brand and
information and goodwill to company.
 Primary-demand and selective-demand
advertising
• Stimulate demand for generic or specific
brands
9-18

Which media should we use?
 To Choose the right medium for a
promotional message, we need to consider
the following.
 What do we want our ads to do?
 Who are we trying to reach?
 What message do we want to
communicate?
 How much will each medium cost?
9-19

Media characteristics
 Newspapers
 Television
 Radio
 Magazines
 Direct Mail
 Outdoor advertising
 Yellow pages
 Internet
9-20

Did our advertising work?
 Here are some of the factors that make it
difficult to measure the sales impact of
advertising
• Ads have different objectives
• Ads can have an effect over time
• The effects of ads are difficult to measure
9-21

Methods used to measure
effectiveness include
 Direct tests: these measure or predict the
sales volume stemming from an advertising
campaign
 Tabulating the number of inquiries from a
direct-response campaign
 Indirect tests: these measure something
other than actual sales (e.g. recall tests)
9-22

Choosing the right
sales promotion
 What are our promotional objectives?
 Who is our target market?
 Can our product be sampled?
 What will it cost to use the right promotional
tool?
 What is the current economic condition?
9-23

Managing public relations
and publicity
 P.R. can be achieved by:
• Supporting charitable projects
• Supplying volunteers or other resources
• Participating in community-service events
• Sponsorship
• Providing information to customers via
newsletters.
9-24

Managing public relations
and publicity (cont.)
 Publicity can be achieved by:
• structured news-release to the media
• co-ordinating personal communication with
a group
• co-ordinating one-to-one personal
communication (lobbying)
9-25

Product promotion-strategy

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