CHAPTER 16

I. THE IMPORTANCE OF MARKETING COMMUNICATIONS AND PROMOTION.

LEARNING GOAL 1. List and describe the various elements of the promotion mix.

A. Marketers spend over $175 billion a year on advertising alone, and more on sales promotion efforts.

1. A TRADE SHOW is an event where many marketers set up displays and potential customers come to see the latest in goods and services.

2. Marketers spend the most money sending salespeople into the field to talk personally with customers.

3. DIRECT MARKETING, often much cheaper and more effective than personal selling, allows customers to buy products by interacting with advertising media without meeting a salesperson.

B. THE PROMOTION MIX.

1. PROMOTION is an attempt by marketers to persuade others to participate in an exchange with them.

2. Marketers use such PROMOTIONAL TOOLS as advertising, personal selling, word-of-mouth, public relations, and sales promotion.

3. The PROMOTION MIX is the combination of promotional tools marketers use to promote their products or services.

II. PERSONAL SELLING.

LEARNING GOAL 2. Illustrate the seven steps of the selling process.

A. PERSONAL SELLING is the face-to-face presentation and promotion of products and services plus searching out prospects and providing follow-up service.

1. Effective selling today is more than persuading others to buy; it is helping them to satisfy their wants and needs.

2. Nearly 10% of the total labor force is employed in personal selling.

3. The average cost of a single sales call to a potential industrial buyer is about $400.

B. STEPS IN THE SELLING PROCESS.

1. PROSPECT AND QUALIFY.

a. PROSPECTING involves researching potential buyers and choosing those most likely to buy.

b. Qualifying means making sure that prospects have the NEED for a product, the AUTHORITY to buy, and the WILLINGNESS to listen to a sales message.

c. TELEMARKETING is often used to find prospects or leads.

2. PREAPPROACH.

a. Before making a sales call, sales reps must do further research.

b. Sales people should learn as much as possible about customers and their wants and needs.

3. APPROACH.

a. You don't have a second chance to make a first impression.

b. Try to give an impression of friendly professionalism, to create rapport, and to build credibility.

4. MAKE PRESENTATION.

a. The idea is to match the benefits of your value package to the client's needs.

5. ANSWER OBJECTIONS.

a. A salesperson should anticipate potential objections and determine proper responses.

b. Questions should be viewed as opportunities for creating better relationships.

6. CLOSE SALE.

a. You have to 'ask for the sale' to finalize the sales process.

b. Closing techniques include getting a series of small commitments and then asking for the order and showing the client where to sign.

c. Salespeople are taught to remember their 'ABCs'-Always Be Closing.

7. FOLLOW UP.

a. Selling is more than simply sales, it is a matter of establishing relationships.

b. Follow-up includes handling customer complaints, making sure that the customer's questions are answered, and supplying what the customer wants.

8. The selling process varies somewhat among different goods and services, but the general idea is the same.

a. Companies today provide many high- tech aids to help salespeople.

b. Salespeople often have laptop computers connected to databases to track orders or get product information.

C. BUSINESS-TO-BUSINESS SELLING.

1. Business-to-business salespeople, who sell to commercial, institutional, and industrial accounts, often make more money that those who sell to consumers.

2. Commercial customers can be found using the STANDARD INDUSTRIAL CODES (SIC.)

3. Sales force automation also helps business- to-business salespeople.

a. Using laptop computers, modems, e- mail, fax software, and scanners, salespeople can obtain and use data in sales presentations.

b. Sales people overseas face obstacles they don't face in the U.S.

III. PUBLIC RELATIONS AND PUBLICITY.

LEARNING GOAL 3. Describe the functions of the public relations department and the role of publicity.

A. PUBLIC RELATIONS.

1. PUBLIC RELATIONS (PR) is the management function that evaluates public attitudes, identifies the policies and procedures of an individual or an organization with the public interest, and executes a program of action to earn public understanding and acceptance.

2. A GOOD PUBLIC RELATIONS PROGRAM HAS THREE STEPS:

a. Listen to the public.

b. Develop policies and procedures in the public interest.

c. Inform people of the fact that you're being responsive to their needs.

3. The public relations department has responsibility for maintaining close relationships with the media, community leaders, government officials, and other stakeholders.

B. PUBLICITY.

1. PUBLICITY is any information about an individual, a product, or an organization that is distributed to the public through the media, and that is not paid for, or controlled by, the sponsor.

2. ADVANTAGES OF PUBLICITY include:

a. IT'S FREE.

b. IT REACHES PEOPLE WHO DO NOT READ ADVERTISING MESSAGES.

c. IT CAN BE PLACED IN A PROMINENT PLACE (like the front page.)

d. A story in the newspaper is treated as news, and NEWS IS MORE BELIEVABLE THAN ADVERTISING.

3. DISADVANTAGES OF PUBLICITY include:

a. YOU HAVE NO CONTROL over how, when, or if the media will use the story.

b. Media DOES NOT HAVE TO PUBLISH IT.

c. The story can be ALTERED.

d. There IS such a thing as BAD publicity.

e. Stories are NOT LIKELY TO BE REPEATED; advertising can be repeated as often as needed.

4. To see that publicity is handled well by the media, establish a friendly relationship with the media and cooperate with them.

IV. SALES PROMOTION AND WORD OF MOUTH.

LEARNING GOAL 4. Explain the importance of sales promotion and word of mouth as promotional tools.

A. SALES PROMOTION.

1. SALES PROMOTION is the promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities.

a. Sales promotion programs are designed to supplement personal selling, advertising, and public relations by creating enthusiasm.

b. Many manufacturers decided that coupons were costing too much money and began cutting back.

2. INTERNAL SALES PROMOTION (within company):

a. Sales training.

b. Sales aids such as flip charts, portable audiovisual displays, and movies.

c. Trade shows.

3. EXTERNAL SALES PROMOTION (outside company, including distributors and dealers):

a. It is important to get distributors and dealers involved so they too are enthusiastic.

b. Techniques include samples, coupons, cents-off deals, displays, contests, etc.

c. Trade shows are important because buyers are able to see products from many different sellers.

d. Virtual trade shows, trade shows on the Internet, enable buyers to see many products without leaving the office.

4. The next step is to PROMOTE TO FINAL CONSUMERS.

a. Sales promotion is an ongoing effort to maintain enthusiasm.

b. SAMPLING, letting consumers have a small sample of the product free, is a quick, effective way of demonstrating a product's superiority at the time consumers are making a purchase decision.

B. WORD-OF-MOUTH PROMOTION encourages people to tell other people about products they have enjoyed.

1. Word-of-mouth is one of the most effective promotional tools.

2. Anything that encourages people to talk favorably about an organization is effective word of mouth.

a. Clever commercials and samples can generate word of mouth.

b. The best way, however, is to have a good product, provide good services, and keep customers happy.

3. WORD-OF-MOUTH PROMOTION INCLUDES:

a. Focusing on customer satisfaction and quality.

b. Delivering on promises.

c. Targeting opinion leaders.

4. An effective strategy for spreading word of mouth is to send testimonials to current customers.

a. These are effective in confirming customers' belief that they chose the right company.

b. However, negative word of mouth can be very destructive to a firm.

c. Upset customers are now getting on the Internet and publishing their complaints.

V. ADVERTISING.

LEARNING GOAL 5. Describe advantages and disadvantages of various advertising media and explain the latest advertising techniques.

A. ADVERTISING is limited to paid, non-personal communication through various media by organizations and individuals who are in some way identified in the advertising message.

1. Publicity is different from advertising in that media space for publicity isn't paid for.

2. Personal selling is face-to-face communication and doesn't go through a medium.

B. IMPORTANCE OF ADVERTISING.

1. The total ad volume exceeds $175 billion yearly.

a. The number one advertising medium in terms of total dollars spent is TV (24% of total.)

b. Previously the number one media, newspapers are now number two, with 22% of the total.

c. Direct mail is number three, but is one of the fastest growing of the media.

2. The PUBLIC BENEFITS FROM ADVERTISING in the following ways:

a. Advertising is INFORMATIVE.

b. Advertising provides us with FREE TV AND RADIO PROGRAMS, because advertisers cover most of the production costs.

3. TV has many advantages to national advertisers, but it is expensive.

a. However, there are few ways to reach as many people with such impact.

b. Marketers must choose which media and which programs can best be used to reach the audience they desire.

c. Non-network stations and alternative forms of media are less expensive.

4. Retailers can use CO-OP ADVERTISING funds from producers, with producers paying for half the cost of advertisements.

C. ADVERTISING USING INFOMERCIALS.

1. INFOMERCIALS are TV programs devoted exclusively to promoting goods and services.

2. They are so successful because they show the product in great detail.

3. Some products, such as work-out tapes, are hard to sell without showing people testimonials.

4. Major companies are now trying to buy time for their own infomercials.

D. USING TECHNOLOGY IN ADVERTISING AND PROMOTION.

1. TECHNOLOGY allows consumer to communicate directly with advertisers.

2. The text discusses technology such as inter active TV, CD-ROM, hand-held computers, e-mail, cellular phones, and pagers.

E. USING ONLINE COMPUTER SERVICES IN ADVERTISING.

1. Online computer services, such as Prodigy, America Online, and CompuServe, can provide massive amounts of product information when customers want it.

2. Once potential customers see what information is available, they can go online with sellers to get additional information.

F. CUSTOMIZED ADVERTISING VERSUS GLOBAL ADVERTISING.

1. GLOBAL ADVERTISING refers to developing a product and promotional strategy that can be used worldwide.

2. Promotion targeted at specific countries is more successful since each country has its own culture, language, and buying habits.

3. Because of cultural differences, promotional efforts designed specifically for individual countries may work best.

4. Even in the U.S., selected groups are large enough and different enough to call for specially designed promotions.

5. MASS CUSTOMIZATION is the term used to describe the design of custom-made products and promotions, including advertising.

VI. PREPARING THE PROMOTION MIX.

LEARNING GOAL 6. Compare and contrast push and pull promotional strategies.

A. Each target group calls for a separate promotion mix.

1. Large, homogenous groups of consumers are most efficiently reached through ADVERTISING.

2. large organizations are best reached through PERSONAL SELLING.

3. SALES PROMOTION motivates people to buy now rather than later.

4. PUBLICITY adds support to the other efforts and can create a good impression.

5. WORD OF MOUTH is often the most powerful promotional tool.

B. PROMOTION STRATEGIES.

1. PUSH STRATEGY involves the producer using promotional tools to convince wholesalers and retailers to stock and sell merchandise.

2. PULL STRATEGY involves heavy advertising and sales promotion efforts directed toward consumers so they will request the products from retailers.

3. A third strategy is to MAKE PROMOTION PART OF SUPPLY CHAIN MANAGEMENT.

a. Thus promotion would be an integral part of supply chain efforts.

b. The idea would be to develop a value package to appeal to everyone: manufacturers, distributors, retailers, and consumers.

c. The trend today is toward everyday low pricing because that results in the greatest profit for sellers and good bargains for consumers.

C. THE AGE OF INTERACTIVE MARKETING.

1. New information technologies have created a new way of marketing, the INTERACTIVE AGE.

2. Buyers can now get on the Internet and seek out whatever information they need to make a purchase.

3. Marketers need to learn these new concepts or risk becoming obsolete in the future.

VII. INTEGRATED MARKETING COMMUNICATION (IMC).

LEARNING GOAL 7. Describe integrated marketing communication and the role of interactive communications within it.

A. An INTEGRATED MARKETING COMMUNICATION SYSTEM (IMC) is a formal mechanism for uniting all the promotional efforts in an organization to make it more responsive to its customers and other stakeholders.

1. In the past, advertising was created by ad agencies, public relations by PR firms, and so forth, with little coordination.

2. To implement an IMC system, you start with customers and stakeholders and their information needs.

3. All messages must be consistent and coordinated.

B. An INTEGRATED MARKETING COMMUNICATION SYSTEM is one where consumers can access company information on their own and supply information about themselves in an ongoing dialogue.

1. GATHER DATA CONSTANTLY about the target groups in a database.

a. An information database is critical to any successful program.

b. A company can gather such data from sales transactions, letters, e-mail, and companies that specialize in gathering such data.

2. RESPOND QUICKLY to customer and other stakeholder information by adjusting company policies and by designing wanted products.

a. A responsive firm adapts to changing wants and needs quickly.

b. Small firms tend to be better listeners and to be more responsive to changes in the market.

3. Make it possible for customers to ACCESS INFORMATION that they need to make a purchase.

C. INTERACTIVE MARKETING ON THE INTERNET.

1. The key to marketing success in the future is INTERACTIVITY.

2. The ADVANTAGES OF INTERACTIVE MARKETING on the Internet include:

a. Customers can access information any time they want.

b. Electronic advertisements and catalogs do not have to be printed, stored, or shipped.

c. Small firms have an equal or better chance to reach customers as large firms.

d. Buyers and sellers can engage in a dialogue over time.

D. MARKETING SERVICES ON THE INTERNET.

1. The promotion of services is often harder because the product is intangible and customers can't visualize all the benefits.

2. The text uses the example of Charles Schwab, a discount brokerage firm.

3. Companies such as Schwab are changing the way organizations interact with customers.

a. More people are choosing to do business over the Internet.

b. There are, however, some legal issues involved when selling on the Internet in global markets.

E. THE NEW INTERACTIVE MEDIA.

1. FAX ON DEMAND means that a company gives a customer a phone number to call.

a. When customers call, they are given a series of numbers to dial in to receive information.

b. That information is then faxed to them immediately.

2. Integrated marketing communication blends with interactive communications when phones, faxes, e-mail, television, and radio are combined in one promotion.

3. E-mail is an effective way to establishing a dialogue with customers.

4. DISK-BASED ADVERTISING is information provided on a CD-ROM or computer disk.

a. Consumers can search the disks for whatever information they want.

b. They can then contact the company to order the product they want.

F. The result of the new technology is that companies will have to totally rethink how marketing and promotion will be done in the future.

1. Advertising will still be needed to establish name recognition and introduce new products.

2. However, there will be a huge increase in the use of the Internet as a promotional and marketing tool.

3. Soon there may be as many Internet malls as there are regional malls.

4. Advertising agencies will have to learn the new technologies and media or face obsolescence.

5. Everyone in marketing will be affected by the interactive age.