Understanding 'promotion in the marketing mic (8) Flashcards
The following are examples of barriers to communication?
- Language
- Technical content
- Not understanding the receiver’s wants or needs
- Inadequate feedback
- Emotional interference
- The sender/receiver’s lack of knowledge or expertise
- The quality of the information sent
- An inappropriate medium
Lack of trust or honesty in the source
- Below the line promotion?
This refers to more subtle forms of promotion such as sponsorship, product placement, endorsements, sales promotion, merchandising, direct mail, personal selling, public relations and trade shows.
Above the line promotion?
This is when the organisation pays an advertising agency to place an advertisement in media such as television, radio, newspapers, Internet, and mobile phones.
The promotional mix
- Advertising
- Personal selling
- Public Relations
- Sales promotion
The adoption process is an important marketing tool. It was first developed by Bourne in 1959, and it describes consumer purchasing behaviour. The individual categories of innovator, early adopter, early majority, late majority and laggards are described below?
- Innovator
- Early adopter leaders by their peers.
- The early majority
- The late majority
- Laggards
- Innovators: These consumers are the first to adopt new products and they often desire to be ahead of other consumers.
- Early adopters: These consumers are also quick to adopt new products and are considered opinion leaders by their peers.
- The early majority: These consumers look to the innovators and early adopters to see if a new product or idea works, and when they do decide to make the purchase, there are often many other people in this category buying at the same time.
- The late majority: These consumers are slower to adopt new products and ideas.
- Laggards: These consumers tend to take a long time to notice products. They either purchase the product when it is no longer new or popular, or they do not purchase the product at all.
What are the product life cycle steps?
- Market introduction
- Market growth
- Market Maturity
- Market decline
When determining a promotions budget, the following methods are employed?
- Affordability method
- The percentage-of-sales method
- Units sold method.
- Competitive parity method
- Objectives method
- Describe the promotional tasks needed to achieve
- Determine the type of promotions required to achieve the objective.
- Determine the scope and intensity of each promotional type.
- Affordability method
- The percentage-of-sales method
- Units sold method
- Competitive parity method
- Objectives method
- Affordability method
The point of departure here is affordability. Management takes extreme views, being either very conservative or overly optimistic (a ‘now or never’ approach). This can lead to a ‘feast or famine’ approach. This means organisations spend money on promotions during good times and cut the budget in bad times. - The percentage-of-sales method
This is an easy way to calculate how much money should be spent on promotions. It uses a specific formula based on a percentage of sales. - Units sold method
According to this method, a specific amount for promotions is added to the product cost. Units sold determine the advertising budget. - Competitive parity method
This is a refinement of the percentage-of-sales method. Percentage is based on the average percentage of similar organisations in the industry. Marketers could follow the example of the main competitor. If you have the same percentage of sales as your competitor, it could point to a market share maintenance strategy. A higher percentage could point to expanding the market share. - Objectives method
This is the most commonly used method and the most important. Five steps are involved in this method: - Describe the promotional tasks needed to achieve a specific, clearly formulated promotional objective.
- Determine the type of promotions required to achieve the objective.
- Determine the scope and intensity of each promotional type.
- Affordability method
The point of departure here is affordability. Management takes extreme views, being either very conservative or overly optimistic (a ‘now or never’ approach). This can lead to a ‘feast or famine’ approach. This means organisations spend money on promotions during good times and cut the budget in bad times. - The percentage-of-sales method
This is an easy way to calculate how much money should be spent on promotions. It uses a specific formula based on a percentage of sales. - Units sold method
According to this method, a specific amount for promotions is added to the product cost. Units sold determine the advertising budget. - Competitive parity method
This is a refinement of the percentage-of-sales method. Percentage is based on the average percentage of similar organisations in the industry. Marketers could follow the example of the main competitor. If you have the same percentage of sales as your competitor, it could point to a market share maintenance strategy. A higher percentage could point to expanding the market share. - Objectives method
This is the most commonly used method and the most important. Five steps are involved in this method: - Describe the promotional tasks needed to achieve a specific, clearly formulated promotional objective.
- Determine the type of promotions required to achieve the objective.
- Determine the scope and intensity of each promotional type.
- Determine the cost of each promotional activity.
- Obtain the total cost of the promotional campaign
In the marketing context, a basic communications model is comprised of?
a marketer, the Internet, the customer and an increase in purchases
Which method of designing a promotional budget involves five steps?
The objectives method
What are the key components of the promotional mix?
Advertising, sales promotion, personal seiling and public relations
How does the promotional strategy change as a product moves through the maturity stage of its life cycle?
It focuses on brand differences, benefits and quality, and encourages brand switching
What is the promotional mix?
A strategy that is developed for the needs of an
organisation, which combines the chosen communication options
Advertising refers to?
paid-for, non-personal communication used to promote a product, service, cause or idea.
Some popular advertising methods include?
- newspapers;
- banners at sporting events;
- billboards and Internet websites;
- logos on clothing;
- magazine advertisements;
- radio spots; and
- television commercials.
The first task of the promoter is to get the prospective customers to? pay attention to the advertisements; the second is to hold their interest.
pay attention to the advertisements; the second is to hold their interest.
This cycle is known as the AIDA principle?
- Attention
- Interest
- Desire
- Action
What are the advantages and disadvantages of Televisions advertisement?
Advantages:
Television
Sight and sound combination
Mass audience
Psychology of attraction
Favourable consumer reaction
The most commonly recommended medium for big brands
- Disadvantages:
Negative evaluations of programmes
Non-selectivity
Fleeting impression only
Commercial clutter
Promotional clutter
Programme mortality (become unpopular)
Magazines
Highly targeted
Select demographic
High receptivity
Long life
Editorial content
Central route, facts
Quality of repro/colour
Geographic reach inflexible
Unobtrusiveness
Easily ignored
No in-action scenes
No sound/motion
Low repeatability
Cost
What are the advantages and disadvantages of Radio advertisement?
- Advantages:
Mass use
Geographic flexible and selectivity
Speed: Production and airing
Low cost (relative)
Psychological effect
Reseller support - Disadvantages:
Nature of message: audio only. Not best medium for recall
Station fragmented for national message
Differing rates
Complicated costing
What are the advantages and disadvantages of Newspaper advertisement?
Widespread use
Short lead times
Recent technological improvements
- Advantages
Good local market coverage
Broad acceptability
‘Believable’
- Disadvantages
Rate differentials (national vs. local)
Cost of national ads
Short life
Picture quality poor
Limited ‘pass-along’
Declining readership
What are the advantages and disadvantages of online advertisement?
- Advantage
High selectivity
Low cost
Immediacy
Interactive capabilities - Small, skewed demographic audience
Audience controls exposure
Relatively low impact
What are the advantages and disadvantages of Direct mail advertisement?
- Advantages
High audience selectivity
Flexibility
Allows personalisation - Disadvantages
Relatively high cost per exposure
Has a junk mail image
Personal selling is an effective promotional technique because it allows the seller?
to interact directly with the consumer; this enables the seller to assess the consumer’s particular needs and establish a long-term relationship with the consumer that leads to repeat purchases.
Personal selling includes the following steps?
- Making an approach
- Doing a presentation
- Handling of objections
- Closing the sale
- Selling add-ons
- Providing after-sale service
Direct marketing is a promotion technique that is a combination?
of advertising and personal selling.
There are two main defining characteristics which distinguish direct marketing from other types of marketing?
- It involves sending unsolicited messages directly to consumers using commercial communication (direct mail, email and telemarketing).
- It emphasises a ‘call to action’ and measurable positive responses from consumers.
Refer back to the Exercise 6A. Pule and her husband have agreed on the price and want to promote the new sandals but cannot agree on a strategy. Pule argues, ‘We must tell the customers that I make these sandals and have ten years’ experience. We must tell them about the quality of the leather and explain to them the meaning of the small ornaments on the strips’. Her husband, John, could not disagree more. He argues, ‘We must give the customer the feeling of Africa, because this is why the customers buy it!’
- Required:
Advise Pule and John on the most appropriate advertisement method and direct selling approach to use for their product.
It is clear that both arguments have merit and can be included in the promotional mix. When it comes to the advertising campaign John’s idea seems better, while Pule’s approach is more suitable to personal selling.
What is advertising?
Personal communication that is paid for to promote a
product, service, cause or idea
Non-personal communication that is paid for to promote a
product service, cause or idea
What is advertising?
Non-personal communication that is paid for to promote a product service, cause or idea
Why is personal selling an effective promotional tool?
It allows the seller to interact directly with the consumer
Which media is used in advertising?
Newspapers, television, banners, logos and radio
Which two characteristics distinguish direct marketing from other types of marketing?
It entails sending unwanted messages directly to
consumers and emphasises a call to action’
What is the second step in personal selling?
Doing a presentation
There are a number of sales promotion tactics, including?
advertising specialities;
coupons
cash refund offers or rebates;
contests;
loyalty rewards;
point-of-purchase displays;
premiums;
price packs;
samples; and
trade shows.
What is Advertising specialities?
The organisation may give their customers free merchandise (e.g. coffee mugs, T-shirts or pens) that displays their brand logo, which results in advertising for the organisation whenever the customer uses the item
Coupons give customers?
discounts on specific items, and are often sent to customers by mail, printed in newspapers or generated at the point of purchase. Coupons can be used to promote new products the consumer would otherwise not pay attention to, as well as mature products that are no longer popular
Cash refunds, or rebates, also give customers discounts, but the discount?
is only applied after the purchase has been made at the full price. Customers must send the retailer a proof of purchase along with the offer in order to be refunded a portion of the cost.
Contests offer customers a chance?
to win a prize if they purchase a specific product. This technique is an effective way to increase the sales of a particular product
Loyalty rewards are used to encourage customer?
loyalty and repeat purchases.
Point-of-purchase displays are used to draw?
customers’ attention toward certain products and encourage impulse buying.
A premium is used to offer customers products?
for free or at a low cost, in order to encourage them to purchase another product. Premiums can also consist of products that display a brand name or logo, which provides additional advertising
Price packs offer customers?
lower prices for multiple products that are purchased together.
Samples are free products given to consumers in order to try to gain new customers.
Trade shows allow organisations to display their new?
products and observe consumer trends in the industry.
What are the advantages and disadvantages of personal selling?
- Advantages:
Personal selling
Interactive and responsive
Greater product acceptance
Increase in sales
Builds buyer and customer relationships
Good for targeting customers - Disadvantages
Expensive
Limited audience
What are the advantages and disadvantages of sales promotion?
- Advantages:
Increases sales
Establishes purchasing patterns
Helps move slow-selling items - Disadvantages
Provides little information
No investment in long-term sales
Little brand building
What are the advantages and disadvantages of advertising?
- Advantages:
Can reach large numbers of people
Good at attracting attention and building awareness for a product
Arouses interest
Can target customers - Disadvantages:
Message needs to be repeated several times to be heard or seen
Costs can be very high
Can be very wasteful when message is sent to large numbers of people who are not interested in the product
Why is the use of cash refunds or rebates an effective sales promotion activity?
It increases the sales of a particular product
How do trade shows produce sales?
Through building relationships with potential customers
What is an example of point-of-purchase displays?
Flyers located at the entrance advertising a product
What is the aim of sales promotion?
Attracting new customers, maintaining customer loyalty and encouraging occasional customers to make repeat purchases
PR effects on other bodies?
- Consumers: PR efforts need to ensure that consumers perceive the organisation as honest, trustworthy and well-intentioned.
- Employees: PR communication needs to ensure that the organisation’s employees are kept up to date regarding important information, employees are an organisation’s most valuable assets
- Government: PR efforts help to maintain a positive public image for the organisation, and this is important in making sure government regulators have a positive perception of the organisation.
- Shareholders: The PR function of an organisation must ensure that the shareholders receive positive news regarding the organisation, as this will encourage them to maintain their investments, which keep the stock price up.
- Suppliers: PR efforts should assure suppliers that the organisation is able to sell their products and make a profit.
The public relations function is?
proactive and future-oriented, and aims to build goodwill.
Below are some common PR approaches?
- Interviews and photo calls
- Speeches, presentations and speech writing
- Executives from an organisation may deliver speeches at corporate events
- Corporate literature
Why should public relations (PR) efforts ensure that
shareholders receive positive news regarding the
organisation?
It will encourage them to maintain their investments
What is the aim of public relations (PR)?
Building a positive image of the organisation in the minds of customers
How do the functions of public relations (PR) differ from those of marketing communication?
Public relations promotes the organisation itself, and not strictly their product or service
Which public relations (PR) function relates to producing published material?
Corporate literature
The primary goal of an organisation’s promotional activities is to?
persuade consumers to purchase products.
the most common promotional objectives below?
- Information dissemination: This information could be about prices, features and aspects of the product’s superior quality. (Encyclopedia.com, n.d.).
- Product demand: They can focus on a single product, a product line or a particular brand within a product line.
- Product differentiation
Organisations want to stand out from the competition. - Product highlights: Organisations want to sell their products at higher prices to make more profit, and they can do this by highlighting their products’ superior quality)
- Sales stabilisation: (challenge for seasonal products)
Why is it important to focus on product differentiation?
the product that is offered at the cheapest price
Which objective of promotional activities relates to the
introduction of new products or attempts to increase sales?
Product demand
How does information dissemination form part of an
organisation’s primary goal to persuade customers to purchase the product?
it assists with the decision to purchase through sharing information about the product or service
How can an organisation sell their product at a higher price?
The organisation would need effective advertising and a reputation of producing good quality products
Why would an organisation use promotional activities during certain times of the year?
To ensure that sales are stablised
