Joe Smith

Your University

Marketing Principles 101

Copyright 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Reaching Your Customer

Chapter 8: Promotional Strategies

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Learning Objectives
LO 8-1 Describe the elements of the promotion mix and how
they relate to an integrated marketing communications
strategy.
LO 8-2 Compare the advantages and disadvantages of
different types of advertising.
LO 8-3 Summarize the various types of sales promotion.
LO 8-4 Explain the importance of personal selling.
LO 8-5 Outline the personal-selling process.
LO 8-6 Describe the role of public relations within the
promotion mix.
LO 8-7 Summarize the promotion mix budgeting strategies.

8-3
Executive Perspective
Teresa Goodnight
Senior Director of Sales, Zayo Group

Took a job answering phones as she figured out her career path and realized she could
take advantage of this position to learn as much as she could about all aspects of
marketing.
Success has come from being dedicated to work and believing that passionate customer
service makes a difference it evokes trust.
Advice to graduates: your position in a company will be more secure if you are
contributing to the bottom line of an organization and demonstrating your contribution
through your metrics and deliverables. Marketers today must be thoughtful and strategic.
Her primary focus of marketing is generating shareholder value. I am an avid believer
that marketings primary job is to support sales.
Her personal brand: passion, integrity, responsiveness, listening.

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Promotion
LO8-1 Mix
Promotion is an element in the marketing mix
Elements of the promotion mix
Advertising
Sales promotion
Personal selling
Public relations
Integrated Marketing Communications (IMC)

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Athlete Felix Baumgartners free fall jump from
23 miles above the earth generated significant
publicity and free media for Red Bull, the company
that sponsored the event, as it appeared on
dozens of news programs and websites.

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Elements
of the
Promotion
Mix

8-7
For the launch of its Cool
Ranch Doritos Locos
Tacos, Taco Bell, in
partnership with Frito Lay,
used an integrated
marketing
communications strategy
that included television,
radio, outdoor, retail
activation, and online
advertising as well as
public relations and social
media promotions.

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Advertising
LO8-2

An advertising campaign has three objectives

Informative
Advertising

Persuasive
Advertising

Reminder
Advertising

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Percentage
Share of Global
Advertising
Expenditure by
Medium

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Advertising
Internet advertising
Takes many forms
Direct marketing

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Advertising
Advantages of Internet
advertising
Cost-per-thousand
impressions (CPM)
Cost per click (CPC)
Click-through rate (CTR)

Disadvantages of Internet
advertising
Difficulty reaching customer
Consumer privacy

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 Measurement tools like Google Analytics provide
companies with data about their Internet
advertising strategies, including how many
people click on their advertising, visit their website,
and purchase their products.
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Advertising
Television advertising

Advantages
Narrowcasting

Disadvantages
Cost
Growth of DVRs

Product placement

8-14
When TNT revived the show Dallas in 2012, it
became one of the most watched new shows of the
year. Even with its success the number of weekly
viewers for the new show averaged less than 7
million viewers per week.

8-15
Hulu has experimented with allowing consumers
to customize their ad-viewing experience.
Though Hulus technology prevents consumers
from fast-forwarding through ads, it allows consumers
to choose the ad they would prefer to watch
from among three different options.

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Best Super Bowl Television
Ads in 2013 Video

Click on the play button to watch

the video.

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8-18
Advertising
Radio advertising
Advantages
Most cost effective
Allows marketers to segment
effectively
Form of narrowcasting

Disadvantages
Audio only
Car radios with digital presets
Satellite radio
Digital plug-ins

8-19
SiriusXM, the leading satellite radio company in
North America, represents a challenge to traditional
radio advertising because of its paid subscriber base
of over 20 million customers who get over 140
commercial-free music channels they can listen to
anywhere in the country.

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Advertising
Print advertising
Advantages
Effective for small business
to advertise to local
community
Special interest magazines

Disadvantages
Being used by fewer and
fewer Americans as primary
information source
Long lead time for magazine
advertisements
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Most
Popular
U.S.
Consumer
Magazines

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Advertising
Outdoor advertising

Advantages
Cost-efficient
Location flexibility
Disadvantages
Short exposure
time
Wasted coverage

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Advertising
Nontraditional advertising
Mobile advertising
Video games

Nontraditional advertising strategies,

such as KFCs fire hydrant
promotion in Indiana, capture the
attention of consumers, a task thats
increasingly difficult through
traditional advertising media.

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Future of Advertising Video

Click on the play button to watch

the video.

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8-26
Sales
LO8-3 Promotion

Coupons
Rebates
Samples
Contests and sweepstakes
Loyalty programs
Trade sales promotions
Allowances
Training

8-27
Coupons, whether in
traditional or electronic
form, for products such
as cosmetics, hair care,
and diapers continue to
be in demand.

8-28
JCPenney Coupons Video

Click on the play button to watch

the video.

8-29
Amazon Prime and other loyalty programs help
companies retain customers even in the face of fierce
competition and a decrease in the natural loyalty
customers feel toward firms and products.

8-30
IBM salespeople reach their target market in a new way by
gathering data from the Internet about what words potential
customers use to search for solutions to their software problems
and then posting inexpensive how-to videos addressing those
problems to the Internet.

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Personal
LO8-4 Selling
Personal selling involves communication
between the salesperson and the customer
Expensive element of promotion mix
Results in immediate feedback
Relationship selling

The Impact of Social Media on Personal Selling

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LO8-5 The Personal-Selling Process

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The Personal-Selling Process

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The sales presentation can range from a girl
scout selling cookies at your door to you giving
a PowerPoint presentation to a
purchasing manager at a major firm.

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The Personal-Selling Process

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The Personal-Selling Process

8-37
The
Personal-
Selling
Process

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8-39
Public
LO8-6
Relations
Variety of tools used in public relations

8-40
Public Relations
Low cost makes publicity advantageous

The sports-entertainment company

WWE has received positive publicity
for its charitable work, including its
partnership with the Make-A-Wish
foundation. During the foundations
World Wish Day initiative, WWE
superstar John Cena agreed to
personally match every frequent flier
mile donated to help reduce travel
expenses for the organization so that
it can grant more wishes.

8-41
Public Relations
Crisis Management
The Changing Face of Public Relations

As part of its crisis

management strategy
following the oil spill in the
Gulf of Mexico, BP posted to
its website videos and
briefings about cleanup and
response efforts to help
mitigate the effects of the
negative publicity it received.

8-42
Todays Professional
Kimberly Winchester
Sales and Marketing Coordinator, Little Rock Marriott

Job includes numerous duties: assists sales director and seven sales
managers, arranges detailed accommodations, arranges large events.
Wanted to combine marketing degree with her sales ambition. Found
opening for job on indeed.com.
Feels her success comes from the personal selling and sales
promotion strategies she learned in her marketing classes.
Advice to graduates: be confident that you will find a job in your field
and dont settle for anything less.
Her personal brand: extremely organized with excellent attention to
detail.

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LO8-7
Promotion Mix Budgeting
Strategies

8-44
Rather than using the percentage-of-sales
budgeting method and cutting its promotional
budget after a five year period of disappointing
sales, Quiznos embarked on a new promotional
campaign to attract customers.

8-45
8-46
 Understanding the
Promotion Mix: The
Memphis Grizzlies Video

Click on the play button to watch

the video.

8-47
1. What advertising medium is most effective for reaching you as a
consumer? Has that changed in the past five years? What do
you think the most effective method for advertising to you will
be five years from now?
2. If you had to advertise a new product to your marketing
classmates, what media would you choose and why?
3. Describe a company that you think does a poor job advertising.
Why is the advertising ineffective? Anyone can criticize
something that is not working, but those who offer creative
solutions to fix advertising strategies that are broken have a
very bright future ahead. With this in mind, make two specific
suggestions about how the company could improve its
advertising.

8-48
4. Image you are in charge of getting students at your school to
attend a lecture on campus. Would you choose a contest or a
sweepstakes as a tool for promoting the event and increasing
attendance? Explain your answer.
5. Sales jobs are one of the fastest-growing areas for new college
graduates. Are you considering a job in sales after graduation?
Please explain why or why not.
6. List two organizations that you think do a good job handling
public relations and explain why you think this. List two
organizations that you think do a poor job handling public
relations and make specific suggestions as to how they might
improve.

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 1. What tools can I use to promote my products?
2. Why should I choose certain types of advertising
over others?
3. How do different types of sales promotions benefit
the organization?
4. Why does personal selling matter to an organization?
FORECAST

5. What are the steps involved in selling my product?

6. Why is the public relations function so important to
organizations?
7. How do organizations determine their promotional
budgets?

8-50
Key Terms
Advertising
Nonpersonal promotional communication about goods,
services, or ideas that is paid for by the firm identified in
the communication. Retur
n to
Advertising campaign slide
A collection of coordinated advertisements that share a
Retur
single theme. n to
Affordable method slide

A promotion mix budgeting strategy in which firms set

their promotion budget based on what they believe they
can afford. Retur
n to
slide

8-51
Key Terms
Allowances
Trade promotions that typically involve paying retailers for
financial losses associated with consumer sales
promotions or reimbursing a retailer for an in-store or
Retur
local expense to promote a specific product. n to
Approach slide

A part of the personal-selling process that involves

meeting the prospect and learning more about his or her
Retur
needs and wants. n to
Click-through rate (CTR) slide

A ratio showing how often people who see an ad end up

Retur
clicking on it. n to
slide
8-52
Key Terms
Closing
The point at which the salesperson asks the prospect for
the sale. Retur
Cold calling n to
slide
The process of approaching unknown prospective
customers or clients. Retur
Contests n to
slide
Sales promotions in which consumers compete against
one another and must demonstrate skill to win.
Retur
n to
slide

8-53
Key Terms
Cost per click (CPC)
The amount the firm pays each time a customer clicks on
an ad. Retur
n to
Cost-per-thousand impressions (CPM) slide

What the firm pays for a thousand views of its ad. Retur
Coupons n to
slide
Documents that entitle the customers who carry them to a
discount on a product.
Retur
n to
slide

8-54
Key Terms
Direct marketing
Advertising that communicates directly with consumers
and organizations in an effort to provoke a response. Retur
Informative advertising n to
slide
A type of advertising that attempts to develop initial
Retur
demand for a product.
n to
Integrated marketing communications (IMC) slide

A promotional strategy that involves coordinating the

various promotion mix elements to provide customer with
a clear and consistent message about a firms products.
Retur
n to
slide

8-55
Key Terms
Loyalty programs
Sales promotions that allow consumers to accumulate
points or other benefits for doing business with the same
Retur
company. n to
Mobile advertising slide

A form of advertising that is communicated to the

Retur
consumer via a handheld device. n to
Narrowcasting slide

The dissemination of information to a fairly small, select

audience that is defined by its shared values,
Retur
preferences, or demographic attributes.
n to
slide

8-56
Key Terms
Objections
The concerns or reasons customers offer for not buying a
product. Retur
Objective-and-task method n to
slide
A promotion mix budgeting strategy in which a firm defines
specific objectives, determines the tasks required to achieve
those objectives, and then estimates how much each task Retur
n to
will cost.
slide
Percentage-of-sales method
A promotion mix budgeting strategy in which firms allocate a
specific percentage of a periods total sales to the
Retur
promotional budget for that period.
n to
slide

8-57
Key Terms
Personal selling
The two-way flow of communication between a
salesperson and a customer that is paid for by the firm
and seeks to influence the customers purchase decision.
Retur
Persuasive advertising n to
slide
A type of advertising that attempts to increase demand for
an existing product. Retur
Preapproach n to
slide
A part of the personal-selling process that involves
identifying key decision makers, reviewing account
histories, identifying product needs, and preparing sales
presentations. Retur
n to
slide

8-58
Key Terms
Product placement
An advertising technique in which a company promotes
its products through appearances on television shows,
movies, or other media. Retur
n to
Promotion slide
All the activities that communicate the value of a product
and persuade customers to buy it. Retur
Promotion mix n to
slide
A subset of the marketing mix that includes four main
elements of marketing communication: advertising, sales
promotion, personal selling, and public relations. Retur
n to
slide

8-59
Key Terms
Prospecting
The search for potential customers those who need or
want a product and fit into a firms target market. Retur
n to
Publicity slide
Disseminating unpaid news items through some form of
media (e.g., television story, newspaper article, etc.) to
gain attention or support. Retur
Public relations n to
slide
Nonpersonal communication focused on promoting
positive relations between a firm and its stakeholders.
Retur
n to
slide

8-60
Key Terms
Qualifying
A part of the personal-selling process that involves
identifying which potential customers within the firms target
market have not only a desire for the product but also the
authority to purchase it and the resources to pay for it.
Retur
Rebates n to
Sales promotions that allow consumers to recoup a slide
specified amount of money after making a single purchase.
Retur
Relationship selling n to
Building a trusting relationship with a customer over a long
slide
period of time.
Retur
n to
slide

8-61
Key Terms
Reminder advertising
A type of advertising that seeks to keep the product
before the public in an effort to reinforce previous Retur
promotional activity. n to
slide
Sales presentation
A forum to convey the organizations marketing message
to the prospect. Retur
n to
Sales promotion slide
A set of nonpersonal communication tools designed to
stimulate quicker and more frequent purchases of a
product. Retur
n to
slide

8-62
Key Terms
Sweepstakes
Sales promotions based on chance such that entry is the
only requirement to win. Retur
Trade sales promotions n to
slide
Sales promotions directed to B2B firms, including
wholesalers, retailers, and distributors rather than
Retur
individual consumers. n to
slide

8-63