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Prepared by


                     Mehul Rasadiya
K.K.Parekh Institute of Management of Studies
Advertising



Ingredients   Public Relations
   of the
 Promotion
    Mix       Personal Selling



              Sales Promotion
Noise




Sender   Encoding   Channel   Decoding   Receiver




                    Channel
Informing     Reminding



        Target
       Audience




       Persuading
Purchase
                                          Conviction


                                 Preference

                        Liking


            Knowledge

Awareness



    Attention              Interest           Desire   Action
Advertising
Effectiveness




                                                                               Personal
                                                                               selling

                                                                               Sales
                                                                               promotion

                                                                               Public
                                                                               relations

                Awareness Knowledge Liking Preference    Conviction Purchase



                   Very effective
                   Somewhat effective
                   Either not effective or inefficient
Nature of the Product



Stage in the Product
Life Cycle


Target Market Characteristics



Type of Buying Decision




Available Funds
                            $$$
Push–and–Pull Strategies
Analyze the Marketplace


  Identify Target Market


Set Promotion Objectives


Develop Promotion Budget


 Choose Promotion Mix
Promotion objectives should:



       be measurable, concrete



  be based on sound research, with a
      well-defined target audience



             be realistic



reinforce the overall marketing plan and
 relate to specific marketing objectives
Objective: To Inform (Awareness)
To increase the top-of-mind awareness level for Peter Pan
peanut butter from 16 percent to 24 percent




Objective: To Persuade (Attitudinal)
To increase the percentage of parents who feel that Peter Pan
peanut butter is the best peanut butter for their children from
22 percent to 35 percent



Objective: To Remind
To remind consumers that Peter Pan peanut butter is the
creamiest peanut butter and is available at their nearest grocery
and convenience stores
• Arbitrary Allocation
• All - You - Can - Afford
• Competitive Parity
• Percent of Sales
• Market Share
• Objective and Task
Self-Regulation
• National Advertising Division (NAD)

• National Advertising Review Board (NARB)




Federal Regulation
• Federal Trade Commission (FTC)
Diminishing
Return on Advertising Expenditures



                                                                                    returns
                                                                                    on additional
                                                                                    spending


                                     Increasing efficiency
                                     as ad budget becomes
                                     sufficient




                                                             Advertising Spending
Corporate Image

              Institutional
              Advertising
                              Advocacy Advertising
  Types
    of
Advertising
                                   Pioneering


               Product            Competitive
              Advertising

                                  Comparative
Determine the campaign objectives.




Make creative decisions.             Make media decisions.




                    Evaluate the campaign.
Profit               Save money, keep from losing money

Health               Body-conscious, healthy

Love or Romance      Sell cosmetics and perfumes

                     Social embarrassment, growing old, losing
Fear                 health, power

Admiration           Celebrity endorsement effective

Convenience          Fast-food and microwave products

Fun and Pleasure     Vacations, beer, amusement parks

Vanity and Egotism   Expensive, conspicuous items
Scientific        Slice-of-Life
  Musical                                     Lifestyle




Demon-
                      Common                   Spokes-
                                                person/
stration             Executional              Testimonial
                       Styles

 Mood or
                                              Fantasy
  Image
              Real/
            Animated
                               Humorous
             Product
            Symbols
Pretests
Examples:
• Consumer jury tests
• Portfolio or unfinished rough tests
• Physiological tests


Post-tests
Examples:
• Recognition tests
• Recall tests
• Attitude measures
• Audience size measurement
New Product Publicity


                 Product Placement

                Customer Satisfaction
    Major           Phone Lines
    Tools
  Used By       Consumer Education
     PR
Professionals    Event Sponsorship


                 Issue Sponsorship


                     Web Sites
Type of buyer                                Desired results                                 Sales promotion examples
                    Loyal customers                              Reinforce behavior,     • Loyalty marketing programs,
                    People who buy your                          increase consumption,     such as frequent-buyer cards
                    product most or all                          change purchase timing    or frequent-shopper clubs
                    of the time                                                          • Bonus packs that give loyal
                                                                                           consumers an incentive to
                                                                                           stock up or premiums offered
                                                                                           in return for proofs-of-purchase
                    Competitor’s                                 Break loyalty, persuade •Sampling to introduce your
                    customers                                    to switch to your brand   product’s superior qualities
                    People who buy a                                                       compared to their brand
                    competitor’s product                                                 • Sweepstakes, contests, or
                    most or all of the time                                                premiums that create interest
                                                                                           in the product
                    Brand switchers                              Persuade to buy your    • Any promotion that lowers the
                    People who buy a                             brand more often          price of the product, such as
                    variety of products                                                    coupons, price-off packages,
                    in the category                                                        and bonus packs
                                                                                         • Trade deals that help make the
                                                                                           product more readily available
                                                                                           than competing products
                    Price buyers                                 Appeal with low prices  • Coupons, price-off packages,
                    People who                                   or supply added value     refunds, or trade deals that
                    consistently buy the                         that makes price less     reduce the price of brand to
                    least expensive brand                        important                 match that of the brand that
                                                                                           would have been purchased

Source: From Sales Promotion Essentials, 2E by Don. E. Schultz, William A. Robinson, and Lisa A. Petrison. Reprinted by permission of NTC Publishing Group, Lincolnwood, IL.
Coupons


                   Premiums
    Six
Categories   Frequent Buyer Programs
    of
Consumer          Contests and
   Sales          Sweepstakes
Promotions
                    Samples


                Point-of-Purchase
                    Displays
Trade Allowances


      Push Money
                               Six
        Training           Categories
                                of
                              Trade
    Free Merchandise          Sales
                           Promotions
  Store Demonstrations


   Business Meetings,
Conventions, Trade-Shows
Detailed
Information
                Message Control



                     Targeted



                 Cost Control
Closing Sales
Personal Selling is more important if...
The product has a high value.
It is a custom-made product.
There are few customers.
The product is technically complex.
Customers are geographically concentrated.


Advertising/Sales Promotion is more important if...
The product has a low value.
It is a standardized product.
There are many customers.
The product is simple to understand.
Customers are geographically dispersed.
Traditional Personal Selling                                                            Relationship Selling
         Sell products (goods and services)                                                      Sell advice, assistance, and counsel
         Focus on closing sales                                                                  Focus on improving the customer’s bottom line
         Limited sales planning                                                                  Considers sales planning as top priority
         Spend most contact time telling                                                         Spend most contact time attempting to build a
         customers about product                                                                 problem-solving environment with the customer
         Conduct “product-specific” needs                                                        Conduct discovery in the full scope of the
         assessment                                                                              customer’s operations
         “Lone-wolf” approach to the account                                                     Team approach to the account
         Proposals and presentations based                                                       Proposals and presentations based on profit
         on pricing and product features                                                         impact and strategic benefits to the customer
         Sales follow-up focused on product                                                      Sales follow-up is long term, focused on
         delivery                                                                                long-term relationship enhancement




Source: Robert M. Peterson, Patrick L. Shul, and George H. Lucas, Jr., “Consultative Selling: Walking the Walk in the New Selling Environment,”
National Conference on Sales Management, Proceedings, March 1996.
Generating Sales Leads


             Qualifying Sales Leads


 Basic     Making the Sales Approach
Steps in
               Making the Sales
  the           Presentation
Selling
Process       Handling Objections


                Closing the Sale


                 Following Up
Set Sales
     Evaluate                   Objectives                    Structure
    Sales Force                                              Sales Force




Manage                   Major Tasks of                             Determine
                                                                   Sales Force
Turnover                     Sales                                     Size
                         Management

                                                                  Develop
 Motivate
                                                                  Compen-
Sales Force
                                                                 sation Plan
                  Train Sales                Recruit Sales
                     Force                      Force
200



          150
                                                           MC
Dollars




                                                           ATC
          100
                                                           AVC


          50

                                                           AFC
           0
                1   2   3   4      5       6   7   8   9        10
                                Quantity
Total Revenue


                             Break Even       Profits

                                                 Total Costs
Price ($)




                                          Fixed Costs

            Losses




                     Quantity (units)
Establish Pricing Goals


Estimate Demand, Costs,
       and Profits


    Choose Strategy


  Fine-Tune Base Price



$ $ $ $ Price $ $
    Right $ $
Unfair Trade Practices



 Key Legal         Price Fixing
and Ethical
  Issues
Related to
   Price      Price Discrimination



                Predatory Pricing
Cash
                               EDLP
  Discount


  Quantity                   Seasonal
  Discount        Price      Discounts
                Reductions
 Functional                  Promotional
  Discount                   Allowances


Trade Loading                 Rebates
FOB Origin


            Uniform Delivered
 Pricing
 Tactics
              Zone Pricing
Based on
Geography
            Freight-Absorption


              Basing-Point
Single
     Two-Part             Price              Flexible
      Pricing                                Pricing




Bundle
                       Common                    Professional
Pricing              Special Pricing               Services

                        Tactics

Odd-Even                                          Price
 Pricing                                          Lining
                 Bait              Leader
                Pricing            Pricing

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Promo selling pricing

  • 1. Prepared by Mehul Rasadiya K.K.Parekh Institute of Management of Studies
  • 2. Advertising Ingredients Public Relations of the Promotion Mix Personal Selling Sales Promotion
  • 3. Noise Sender Encoding Channel Decoding Receiver Channel
  • 4. Informing Reminding Target Audience Persuading
  • 5. Purchase Conviction Preference Liking Knowledge Awareness Attention Interest Desire Action
  • 6. Advertising Effectiveness Personal selling Sales promotion Public relations Awareness Knowledge Liking Preference Conviction Purchase Very effective Somewhat effective Either not effective or inefficient
  • 7. Nature of the Product Stage in the Product Life Cycle Target Market Characteristics Type of Buying Decision Available Funds $$$ Push–and–Pull Strategies
  • 8. Analyze the Marketplace Identify Target Market Set Promotion Objectives Develop Promotion Budget Choose Promotion Mix
  • 9. Promotion objectives should: be measurable, concrete be based on sound research, with a well-defined target audience be realistic reinforce the overall marketing plan and relate to specific marketing objectives
  • 10. Objective: To Inform (Awareness) To increase the top-of-mind awareness level for Peter Pan peanut butter from 16 percent to 24 percent Objective: To Persuade (Attitudinal) To increase the percentage of parents who feel that Peter Pan peanut butter is the best peanut butter for their children from 22 percent to 35 percent Objective: To Remind To remind consumers that Peter Pan peanut butter is the creamiest peanut butter and is available at their nearest grocery and convenience stores
  • 11. • Arbitrary Allocation • All - You - Can - Afford • Competitive Parity • Percent of Sales • Market Share • Objective and Task
  • 12. Self-Regulation • National Advertising Division (NAD) • National Advertising Review Board (NARB) Federal Regulation • Federal Trade Commission (FTC)
  • 13. Diminishing Return on Advertising Expenditures returns on additional spending Increasing efficiency as ad budget becomes sufficient Advertising Spending
  • 14. Corporate Image Institutional Advertising Advocacy Advertising Types of Advertising Pioneering Product Competitive Advertising Comparative
  • 15. Determine the campaign objectives. Make creative decisions. Make media decisions. Evaluate the campaign.
  • 16. Profit Save money, keep from losing money Health Body-conscious, healthy Love or Romance Sell cosmetics and perfumes Social embarrassment, growing old, losing Fear health, power Admiration Celebrity endorsement effective Convenience Fast-food and microwave products Fun and Pleasure Vacations, beer, amusement parks Vanity and Egotism Expensive, conspicuous items
  • 17. Scientific Slice-of-Life Musical Lifestyle Demon- Common Spokes- person/ stration Executional Testimonial Styles Mood or Fantasy Image Real/ Animated Humorous Product Symbols
  • 18. Pretests Examples: • Consumer jury tests • Portfolio or unfinished rough tests • Physiological tests Post-tests Examples: • Recognition tests • Recall tests • Attitude measures • Audience size measurement
  • 19. New Product Publicity Product Placement Customer Satisfaction Major Phone Lines Tools Used By Consumer Education PR Professionals Event Sponsorship Issue Sponsorship Web Sites
  • 20. Type of buyer Desired results Sales promotion examples Loyal customers Reinforce behavior, • Loyalty marketing programs, People who buy your increase consumption, such as frequent-buyer cards product most or all change purchase timing or frequent-shopper clubs of the time • Bonus packs that give loyal consumers an incentive to stock up or premiums offered in return for proofs-of-purchase Competitor’s Break loyalty, persuade •Sampling to introduce your customers to switch to your brand product’s superior qualities People who buy a compared to their brand competitor’s product • Sweepstakes, contests, or most or all of the time premiums that create interest in the product Brand switchers Persuade to buy your • Any promotion that lowers the People who buy a brand more often price of the product, such as variety of products coupons, price-off packages, in the category and bonus packs • Trade deals that help make the product more readily available than competing products Price buyers Appeal with low prices • Coupons, price-off packages, People who or supply added value refunds, or trade deals that consistently buy the that makes price less reduce the price of brand to least expensive brand important match that of the brand that would have been purchased Source: From Sales Promotion Essentials, 2E by Don. E. Schultz, William A. Robinson, and Lisa A. Petrison. Reprinted by permission of NTC Publishing Group, Lincolnwood, IL.
  • 21. Coupons Premiums Six Categories Frequent Buyer Programs of Consumer Contests and Sales Sweepstakes Promotions Samples Point-of-Purchase Displays
  • 22. Trade Allowances Push Money Six Training Categories of Trade Free Merchandise Sales Promotions Store Demonstrations Business Meetings, Conventions, Trade-Shows
  • 23. Detailed Information Message Control Targeted Cost Control Closing Sales
  • 24. Personal Selling is more important if... The product has a high value. It is a custom-made product. There are few customers. The product is technically complex. Customers are geographically concentrated. Advertising/Sales Promotion is more important if... The product has a low value. It is a standardized product. There are many customers. The product is simple to understand. Customers are geographically dispersed.
  • 25. Traditional Personal Selling Relationship Selling Sell products (goods and services) Sell advice, assistance, and counsel Focus on closing sales Focus on improving the customer’s bottom line Limited sales planning Considers sales planning as top priority Spend most contact time telling Spend most contact time attempting to build a customers about product problem-solving environment with the customer Conduct “product-specific” needs Conduct discovery in the full scope of the assessment customer’s operations “Lone-wolf” approach to the account Team approach to the account Proposals and presentations based Proposals and presentations based on profit on pricing and product features impact and strategic benefits to the customer Sales follow-up focused on product Sales follow-up is long term, focused on delivery long-term relationship enhancement Source: Robert M. Peterson, Patrick L. Shul, and George H. Lucas, Jr., “Consultative Selling: Walking the Walk in the New Selling Environment,” National Conference on Sales Management, Proceedings, March 1996.
  • 26. Generating Sales Leads Qualifying Sales Leads Basic Making the Sales Approach Steps in Making the Sales the Presentation Selling Process Handling Objections Closing the Sale Following Up
  • 27. Set Sales Evaluate Objectives Structure Sales Force Sales Force Manage Major Tasks of Determine Sales Force Turnover Sales Size Management Develop Motivate Compen- Sales Force sation Plan Train Sales Recruit Sales Force Force
  • 28. 200 150 MC Dollars ATC 100 AVC 50 AFC 0 1 2 3 4 5 6 7 8 9 10 Quantity
  • 29. Total Revenue Break Even Profits Total Costs Price ($) Fixed Costs Losses Quantity (units)
  • 30. Establish Pricing Goals Estimate Demand, Costs, and Profits Choose Strategy Fine-Tune Base Price $ $ $ $ Price $ $ Right $ $
  • 31. Unfair Trade Practices Key Legal Price Fixing and Ethical Issues Related to Price Price Discrimination Predatory Pricing
  • 32. Cash EDLP Discount Quantity Seasonal Discount Price Discounts Reductions Functional Promotional Discount Allowances Trade Loading Rebates
  • 33. FOB Origin Uniform Delivered Pricing Tactics Zone Pricing Based on Geography Freight-Absorption Basing-Point
  • 34. Single Two-Part Price Flexible Pricing Pricing Bundle Common Professional Pricing Special Pricing Services Tactics Odd-Even Price Pricing Lining Bait Leader Pricing Pricing