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MAR 4333-521

• Promotion Management
• Sales Promotion (Finish)
• Public Relations
• Rich Gonzalez University of South Florida
• Fall 2003Sarasota
• November 22, 2003

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To Jennifer From Promotion Management Class
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URLs (used today)

• www.bestbuy.com
• biz.yahoo.com/prnews/031111/nytu134_1.html
• www.napster.comwww.itunes.comwww.musicmatch.com

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November 22, 2003--Agenda

• Chapter 16Sales PromotionFinish
• Quiz 4
• Presentations
• Chapter 17-Public Relation
• For November 29

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Schedule

• Nov 22 Presentations Assignment P (due)Public
  Relations-Ch. 17
• Nov 29 Measuring Promotional Program
  Effectiveness 19Presentations
• Dropped from syllabusChapters 13, 21, 22

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Chapters Covered on Exam 2

• Media--Chapter 10, 11, 12
• InternetChapter 15
• Sales PromoChapter 16
• Public RelationsChapter 17
• Measuring EffectivenessChap. 19
• Dropped from syllabusChapters 13, 21, 22

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For Today November 29

• Chapter 17- Public Relations(IMC Perspective
  17-1, PR Blunders)(IMC Perspective 17-2, Naming
  Stadia)
• Presentations

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For November 29

• Chapter 19- Promtional Plan Effectiveness(IMC
  Perspective 19-1, ARF Awards)

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Assignment PNew Product Promotion

• Stage II
• Investigate and Report
• Summary of Product/Service
• Summary of Promotion EffortsObjectives Target
  MarketUse of IMCMedia StrategyMedia Used
  Agency UsedBudget DescriptionSales Promotions

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Assignment PNew Product Promotion

• Stage III
• 10 Minute PresentationDescriptive
• Opinion/Analysis
• Performance of Promotional Efforts
• Prediction on Success of Product/Service

Due November 22
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Assignment PDeliverable

• Report
• Cover Sheet2 pagesBullets OKNarrative
  SummaryCopies for 13 Other Students
• Opinion/Analysis
• Performance of Promotional Efforts
• Prediction on Success of Product/Service

Due November 22
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Best BuyMonster Promotion

• Product Promotion and DistributionU.S. and
  Canada
• Rolling StonesFour Flicks, 4 DVD Set
• Sold In Best Buy Exclusively, 4 Months
• 700 Stores
• Issues, Significance?
• http//story.news.yahoo.com/news?tmplstoryu/nm/
  20031011/music_nm/music_best_buy_dc_2

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Best BuyMonster Promotion

• TV Ads
• Print Ads
• Online Advertising
• Sunday circulars
• In-store Advertising
• http//biz.yahoo.com/prnews/031111/nytu134_1.html

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Sales Promotion
A direct inducement that offers an extra value
or incentive for the product to the sales force,
distributors, or the ultimate consumer with the
primary objective of creating an immediate sale.

• An extra incentive to buy
• An acceleration tool
• An inducement to intermediaries
• Targeted to different parties

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Sales Promotion Vehicles
Consumer-Oriented
Trade-Oriented
Samples
Contests, dealer incentives
Coupons
Trade allowances
Premiums
Point-of-purchase displays
Contests/sweepstakes
Training programs
Refunds/rebates
Trade shows
Bonus packs
Cooperative advertising
Price-off deals
Frequency programs
Event marketing
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Allocations to Advertising, Trade Promotions and
Consumer Promotions
100
Consumer Promotions
90
80
70
Media Advertising
60
50
40
30
Trade Promotions
20
10
0
'89
90
91
92
'93
'94
'95
'96
'97
'98
'99
00
Percent of total promotional dollars, 3-year
moving average.
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Reasons for Increase in Sales Promotion

• Growing Power of Retailers
• Declining Brand Loyalty
• Increased Promotional Sensitivity
• Brand Proliferation
• Fragmentation of Consumer Markets
• Short-Term Focus
• Increased Accountability
• Competition
• Clutter

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Sales Promotion Uses

• Introduce new products by encouraging trial and
  repurchase
• Get existing customers to buy more
• Attract new customers
• Defend current customers
• Maintain sales in off season
• Target a specific market segment
• Enhance IMC efforts and build brand equity

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Objectives of Consumer-Oriented Sales Promotion

• To Obtain Trial and Repurchase
• To Increase Consumption of an Established Brand
• To Defend (Maintain) Current Customers
• To Target a Specific Segment
• Enhance IMC programs and build brand equity

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Sampling

• Providing consumer with some quantity of a
  product for no charge to induce trial
• Works best when
• The products are of relatively low unit
• value, so samples dont cost much
• The products are divisible and can be
• broken into small sizes that can reflect
• the products features and benefits
• The purchase cycle is relatively short
• so the consumer can purchase in a relatively
  short time period

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Coupons

• The oldest and most widely used sales promotion
  tool
• Nearly 240 billions distributed each year in the
  United States
• 80 percent of consumers use coupons and 25 use
  them regularly

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Advantages and Limitations of Coupons

• Disadvantages
• Difficult to determine how many consumers will
  use coupons and when
• Coupons are often used by loyal consumers who may
  purchase anyway
• Declining redemption rates and high costs of
  couponing
• Misredemption and fraud

• Advantages
• Appeal to price
• sensitive consumer
• Can offer price break
• without retailers coop
• Can be effective way
• to induce trial of new or existing products
• Can be way to defend
• market share and
• encourage repurchase

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Coupon Distribution
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Coupon Trends

• Major companies cutting back on
• use of coupons
• Searching for more effective coupon
• techniques
• More use of internet for distribution

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Premiums

• An offer of an item of merchandise or service
  either free or at a low cost that is an extra
  incentive for customers
• Two types of premiums
• Free premiums -
• only require purchase of the product
• Self-liquidating premiums -
• require consumer to pay some or all of the
  cost of the premium

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Contests and Sweepstakes
Contest a promotion where consumers compete for
prizes or money on the basis of skills or
ability. Winners are determined by judging
entries or ascertaining which entry comes closes
to some predetermined criteria
Sweepstakes/games a promotion where winners are
determined purely by chance and cannot require a
proof of purchase as a condition for entry.
Winners are determined by random selection from
the pool of entries or generation of a number to
match those held by game entrants.
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Other Popular Consumer SalesPromotion Tools

• Refunds and Rebates
• Bonus Packs
• Price-off deals
• Frequency/loyalty programs
• Event marketing

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Trade-Oriented Sales Promotion Objectives

• Obtain Distribution of New Products
• Maintain Trade Support for Existing Products
• Encourage Retailers to Display and Promote
  Existing Brands
• Build Retail Inventories

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Types of Trade-Oriented Promotions

• Contests and Incentives
• Trade Allowances
• Buying Allowances
• Promotional Allowances
• Slotting Allowances
• Point-of-Purchase Displays
• Sales Training Programs
• Trade Shows
• Cooperative Advertising

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The Sales Promotion Dilemma
Our Firm
Maintain Promotions
Cut Back Promotions
We lose market share
Same market share, profits stay low
Maintain Promotions
All Others
Higher profits for everyone
We gain in market share
Cut Back Promotions
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Promotion Targeted to Reseller Salespeople

• Product or program sales
• Selling a specific number of cases
• Selling a specific number of units
• Selling a specific number of promotional programs
• New account placements
• Number of new accounts opened
• Number of new accounts ordering a minimum amount
• Promotional programs placed in new accounts
• Merchandising efforts
• Establishing promotional programs
• Placing display racks, counter and other p-o-p
  displays

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Shifting Role of Sales Promotion Agencies

• THEN
• Created tactics
• Single project basis
• Hired for specialty
• Single agency contact
• Inferior to ad agency
• Indirect accountability

• NOW
• Create strategy
• Continuing service
• One full-service firm
• Agency team contact
• Equal to ad agency
• Directly accountable

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Quiz 4
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7 Presentations

• New Product Promotion Program Analysis

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Chapter 17 Begin
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The Role of Public Relations

• To manage relationships with the public

General Public
Customers
Employees
CLIENT
Suppliers
Stockholders
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Public Relations Management Process

• Determination and evaluation of public attitudes
• Identification of policies and procedures of an
  organization
• Development and execution of the program

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Marketing Public Relations (MPR) Functions

• Building marketplace excitement before media
  advertising breaks
• Creating advertising news where there is no
  product news
• Introducing a product with little or no
  advertising
• Providing a value-added customer service
• Building brand-to-customer bonds
• Influencing the influentials/opinion leaders
• Defending products at risk and giving customers a
  reason to buy

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Segway An Example of MPRs at Work
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The Process of Public Relations

• Determining and evaluating public attitudes
• Establishing a PR plan
• Developing and executing the PR program

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Research on Public Attitudes

• Provides input for the planning process
• Serves as an early warning system
• Secures internal cooperation, support
• Increases communications effectiveness

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Evaluating Public Relations Plans

• Does the plan reflect a thorough understanding of
  the companys business situation?
• Has the PR program made good use of research and
  background sources?
• Does the plan include full analysis of recent
  editorial coverage?
• Do the PR people fully understand the products
  strengths and weaknesses?
• 5. Does the PR program describe several cogent,
  relevant conclusions from the research?

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Evaluating Public Relations Plans

• 6. Are the program objectives specific and
  measurable?
• 7. Does the program clearly describe what the PR
  activity will be and how it will benefit the
  company?
• 8. Does the program describe how its results
  will be measured?
• 9. Do the research, objectives, activities, and
  evaluations tie together?
• 10. Has the PR department communicated with
  marketing throughout the development of the
  program?

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Public Relations Audiences

• Employees of the firm
• Stockholders and investors
• Community members
• Suppliers and customers
• The media
• Educators
• Civic and business organizations
• Governments
• Financial groups

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Public Relations Tools

• Press releases
• Press conferences
• Exclusives
• Interviews
• Community involvement
• The internet

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Example of a Press Release
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Reebok Used a Press Conference to Announce the
Sponsorship of Shakira
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Telling the Story

• Technological methods make it easier for the
  press
• They increase the likelihood media will use the
  story
• Telephone press conferences
• In-studio media tours
• Multicomponent video news releases (VNR)
• Targeted wire stories

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PR Publications

• Inserts
• Enclosures
• Annual reports
• Posters
• Bulletin boards
• Exhibits
• Audiovisuals
• Position papers
• Speeches

• News releases
• Media kits
• Booklets
• Leaflets
• Pamphlets
• Brochures
• Manuals
• Books
• Letters

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Advantages of Public Relations

• Credibility
• Cost
• Avoidance of clutter
• Lead generation
• Selectivity
• Image building

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Criteria for Measuring PR Effectiveness

• Total number of impressions . . .
• Over time
• On the target audience
• On specific target audiences
• Percentage of . . .
• Positive articles over time
• Negative articles over time
• Ratio of positive to negative articles
• Percentage of positive and negative articles by .
  . .
• Subject
• Publication
• Reporter
• Target audience

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Publicity
Publicity involves the generation of news about a
company, product, service, brand or person in
various media. It is a subset of the public
relations effort.

• Key points regarding publicity
• Publicity is generally short-term focused
• Publicity is not always under the control of the
  firm
• Publicity can be negative as well as positive

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The Power of Publicity

• Perceived as more credible
• Often perceived as endorsed by the medium in
  which it appears
• Often has high news value
• Often generates high frequency of exposure

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Publicity Vehicles
Feature Articles
Special Events
Captioned Photos
News Releases
Press Conferences
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Responding to Publicity
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Advertising Versus Publicity
Advertising
Publicity
Factor
Great
Little
Control
Lower
Higher
Credibility
Achievable
Undetermined
Reach
Undetermined
Schedulable
Frequency
Unspecified/Low
Cost
Specific/High
Low
High
Flexibility
Tentative
Specifiable
Timing
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Objectives of Corporate Advertising

• Create a positive image for the firm
• Communicate the organizations viewpoint on
  various issues
• Boost employee morale
• Smooth labor relations
• Help newly deregulated industries
• Help diversified companies establish an identity

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Event Sponsorship
a form of marketing communications whereby an
organization becomes involved with a particular
event by developing sponsorship relations.

• Events used for sponsorship
• Sporting events
• Music/entertainment
• Festivals
• Arts/cultural events
• Causes

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Advocacy Advertising

• Advocacy advertising is the propagation of ideas
  and elucidation of controversial social issues of
  public importance in a manner that supports the
  interests of the sponsor

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Cause Related Marketing
Cause related marketing is a form of marketing
whereby companies link with charities or
nonprofit organizations as contributing sponsors
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Chapter 17 End