-Direct inducement (bribe) which offers a value or incentive to consumers, sales forces, and/or distributors where the objective is to create immediate sales

*Incentive to behave in a certain way

(meaning you are going to get more for your money in a sales promotion;business will offer temporary deals to try and bring in a lot of customers in a little amnt of time)

-Creates an image over time

-Relies on emotional appeals(advertising:emotional & sales:price)

-Contributes somewhat to profitability

-Adds intangible value (feeling about the product)

Ex: Opening and eating CEREAL doesn't change food but changes opinion of it

-Creates immediate action (coupons are a form of sales promotion)

-Relies heavily on rational appeals (EX's: $5 footlong, or buy one get one)

-Contributes significantly to short term profitability

-Adds tangible value (you can see a difference)

(EX: 50% off, or 20% more in bottle for same price)

-Awareness of a brand name and benefits before promotion occurs. Helps if there's brand awareness before promotion; can almost be simultaneously.

- 2 tools speaking w/ 1 voice: advertising and sales promotion must work together

-deals with Future behavior

*determined by positive reinforcement accompanying past behavior

(EX: buying newer iphone bc of how much you liked first one)

-Promotional tools act as positive reinforcers along with product performance (the primary reinforcement) to INCREASE THE PROBABILITY OF REPEAT PURCHASE

*products performance is more important, sales promotions can't fix bad product performance

Shape consumers behavior to how we want them to be. Learning a complex behavior througha series of successive approximations of the final behavior.

*gradual process of repeat occurences, happens over time

*errors in implementation:IMPROPER FADING OF INCENTIVES-giving a coupon once, then nothing after 1st purchase

(may pull incentive too fast EX: marathon trainer)

Too many coupons, rebates, etc. (1/2 off, $2 off, etc); creates customers who won't buy the product w/o the coupon

*retail-cost-discount=no profit

*Subway's $5 footlong is a perfect example of overuse

Samples: free products for consumers to try

*Eliminates:

-financial risk (don't have to worry about paying for something and not liking it because it's free)

-inconvenience (in trying to track down product)

-Brand is definitely better

-Doesn't come in a WIDE variety

-Purchase cycle is short(anything you buy frequently)

-Attitudes or behavior must be changed(EX: gave out coke zero samples to target as guys drink)

SAMPLE DELIVERY METHODS:

-Mail, Door to Door, In Store, On Package, Internet, Other(itunes sample songs, concerts where crowds are)

-Certificate presented to a dealer

-Provides user specific savings on a specified product -Likely users are current users of the brand

-Retains current users

-Encourages brand switching

-Increase in-home inventory

-Lengthens purchase cycle

-Direct mail

-Print Media

*Newspaper *Magazine

-In/on package

-Nontraditional

*texts

*emails

*internet coupons

-Consumer purchases product w/ a mail in proof of purchase for a refund sent at a later time

*Redemption problems: Delay of reinforcement (time it takes in mail) and Effort required (filling out, etc.)

(30% of people don't fill out forms fro rebate)

-Product is sold at full price

-Consumers get more for their money

-Doesn't reduce price/value ratio (EX: coke rewards-doesn't cheapen anything, just adds VALUE)

An extra item offered at a low price or free as an extra incentive to purchase (EX: buy perfume for over $45 get bag free)

PREMIUM=PRIZE

-Encourage brand switching

-Trade up to larger size/spend more $ (EX:spend $75 and get a free tote)

-Increase repeat purchases (EX:mcdonalds monopoly game)

-Put a long term message in front of the consumer (remember the name/brand)

*Methods of distribution:

  -In package (cracker jack), In store, Package itself (margaritaville margarita souvenir glass), Mail (kelloggs box tops send in and get something)

-A game where participants submit names for a random chance of winning

- No purchase necessary

-Increases involvement

-Increases awareness

-Sweepstakes with a charge to enter

-Illegal in most situations

Pull down from manufacturer to retailer. Promotions can stimulate short term behavior

-Retail incentive to push product (top-down)

(EX: deal offered to Seminol Discount for redbull by jager for cheaper)

-Maintain or increase distribution

(EX:The more retailers that sell redbull, the more customers to buy it, and more profitable it is)

-Maintain or expand shelf space

(manufacturer should promote to retailer to get redbull at eye level, where it makes the most money)

-Preempt/prevent competition

-Change consumer purchase patterns

-Buying allowances *Temporary price reductions of product from manufacturer to retailer

-Advertising Allowances *Payments by manufacturer to retailer to fund retailer's advertising of the product

-Contests (A.E. stores)

-Sweepstakes

-Point of purchase *Promotional materials placed at the point of purchase, meant to increase impulse purchases

-Increase consumer learning

-Increase/stimulate purchase behavior

-Relatively low cost (because not paying for media and because it's straightforward)

-Easy evaluation (track sales when pop is up and when it is down)

-Monetary incentive(help retailer make money, give them advertising or buying allowance)

-Tied to other items (pair chips with beer/dip/soda)

-Easy to set up (make pops easy to create)

Management function that formulates and executes a program of action to earn the understanding and goodwill of targeting its specific publics

-PR is NOT free advertising (if free, then you have no control)

-Action oriented

-Understanding and goodwill

-Target specific publics

-complements advertising rather than working against it

Goals:

-Advertising

*long term goal to inform and persuade target to buy specific brand of products.

-Public Relations

*Develop understanding and goodwill and favorable attitudes towards a brand

(EX:publicity, not free)

Credibility:

-PR seen as more credible because it is not paid, advrtising is

Cost:

-Major advertising costs = media time and space

-Major PR costs = non media

Control:

-Advertising: More control over message

-PR: don't have control over message

Interest:

-Editorial interest not very important for Advertising BUT critical to success in Public Relations

Personnel:

-In advertising, more likely to have business background. In PR, more likely to have a journalism background

-Stimulate interest in a target group

-Research based situation analysis

-Specific objectives to build plan off of

-Detailed knowledge of media (adv. purchase media, pr. media relations)

-Relatively inexpensive

-Cuts through advertising noise/clutter

-Highly credible

-Develop new sales leads (adv misses some people)

-Difficult to reach some publics w/ advertising (pr helps to reach the people and markets that what adv. misses)

-Benefits overall company image rather than for its products

-not specific to 1 product

(EX: Exxon mobile- show ads(CIA's) that talk up all of the good things that you as a company is doing! ie. show that they care about the future and also about gas and energy)

*Share the same objectives as PR by having understanding and goodwill, and paid time and space provides greater control over message and media

-Direction *overall image, not specific products -Tangibility *corporate image is less tangible than product attributes

-Upper management involvement

-Gain attention

-Involve the audience

-Build Credibility

-Get action

-General image *Designed to enhance the basic image of the company

-Financial *Creates a favorable image in the financial community

-Advocacy *Attitude or behavior with the public on a specific issue, often controversial

-Recruiting *Presents the company favorably to prospective employees

(EX: Army recruitment ad, classified ad in Trade Mag) -Special Situation *corporate giving

-Special purpose often lacking

-Limited results measurement

-What works and doesn't work is NOT always known -Basic lack of research

1. Affordable: Non-advertising expenses and the desired profit are deducted from projected revenues, and part of what's left is the budget

-problems: Don't know if budget is enough bc no situation analysis, leads to underspending

2. Percent of Sales: Budget is some percent of past or projected sales (common in retail businesses)

-problems: Financially based budget, No situation analysis, difficult to use w/ new products (w/ no sales history can't project sales), may lead to under spending toward downward sale time

3. Competitive Parity: Company's share of industry expenditures on advertising should equal its market share (meaning company can compete only compared to its size in the market EX: d3 schools work as hard as d1 but even playing field makes them separate)(EX: coke is huge & Dr. Pepper isn't)

3 stage process:

-Set Objectives (from situation analysis)

-Identify Strategies (how to accomplish goals)

-Estimate costs

-Use of several media, vehicles, messages

-Interaction w/ other marketing variables(advertising doesn't work alone. needs to have stage of develop, kind of product, place of adv., etc.)

-Interaction with marketplace variables(location, economy, competitors)

-Time to achieve objectives(short term  or long term)

Larger budgets neededto produce

-Awareness

-Product trial: half people who try product won't buy it again so try to get as many people to do it first time as possible for bigger customer base

(EX: coke doesn't have to worry about trial, everyone's already used it)

-Double the budget

-Commission (just like realtors)

-Fee(more popular now, hourly rate..billed at the end)

-Combination

-Other

*Bonus amount every time you hit performance platform

*Retainer: fixed monthly fee agency is paid regardless of work being done

     -agencies like this bc they get paid every month

     -clients like it bc they don't pay all at once

     -makes seasonal clients easy to deal with

Activities involved in selling goods/services directly to final consumers for their personal non-business use -Retailing

*Selling products directly to final consumers

*Personal use

-create awareness

-create a unique position (how you perceive a store)

-reduce excess inventory (all about pushing inventory)

-store positioning (EX: Macy's ad, we could tell it wasn't saks 5th ave OR walmart)

-Immediacy *generates sales to reduce inventory -Product vs. location *Retail advertising stresses location because product is available other places. (EX: canon ad helps canon not best buy bc didn't tell you where you can get it bc you can buy it anywhere)

-Breadth of product line *Balance advertising across thousands of products(EX: Best buy doesn't have just canon cams but lots, where as canon just worries about canon)

-Geographic coverage *Often focuses on a specific geographic area (all retailing is really local)

Reg. price line advertisin(nothing on sale/special offers)

-focuses on product line and regular prices, positioning advertising, long term(EX: publix ads, staples ads)

Sale Advertising (most common)

-Reduced prices for a limited time, short-term response (EX: Jcpenney's saturdays til noon get it NOW!), creates a sense of urgency gets rid of stock

Clearance advertising (intense form, on steroids)

-Very immediate, least image oriented (EX: going out of business and interested in moving inventory)

issues: local media and short-term results

Print media

-Newspaper *largest source of retail advertising -Magazines *Awareness building and regular price line advertising (less effective of short term effects but effective at building image of store

Broadcast

-TV *Effective for both sale and regular price line (works in all areas of retail)

-Radio *Effective w/ narrow target markets bc of segmented market

Direct Mail

-current customers (EX: macy's cardholders get sales in mail with bill)

-geographic trading area (trading is where most of customers come from. EX: blockbuster in your area)

Outdoor(not very popular w/ retailers bc long term)

-Limited use (up for long pd of time)

-Image building

-Geographic segmentation(billboards up where store is)

Yellow Pages

-Popular (esp companies that rely heavily on phone service like delivery foods, hotlines, lawyers) but expensive

-more than 75% of visits to YP are ppl you already know just need number

-Manufacturer funds all or part of the retailer's advertising of that product (EX: Kohl's paid for Levis's)

-Stretches the budge(adds money to adv. budget)

-Leverage w/ media (better advertising rates)

-Tie-in to national quality product(helps smaller retailers)

-Advertisements are supplied

-Contrasting goals(manufacturers want something in return)

-message & media restricitons(company that gives money will set restrictions on how you spend it)

Conflicting: Kohls may want 100% of advertising to be in newspapers. Ppl could just remember brand & not store

-High involvement: focus on information (price, characteristics, inventory)

-Low Involvement: Focus on image

-Relationship to national advertisers

   *Strong tie-in by letting national company create image & focus retail ads on information

-Create consistent messages(musical jingle, same font, etc. but unique in some way)

-Avoid ads that don't stand out

-Focus on short and long term in ads

-Short life so RAPID IMPACT is needed

-Grab the reader/viewer/listener...NOW

-Significant component of retailing

-Both focus on short-term behavior

-percentage of sales is the most common

-cooperative advertising increases the budget (pain, but adds mon to the budge)

-image vs. sales *a combo of the 2 is desirable, the amount sales adv. vs image has increased ovr the yrs

-Charity vs. Advertising *Charity (long term) is not advertising(short), set up a separate budget for charity and advertising. Bc if not, you'll short change charity and adv. budget will get all of the money

-is in a less favorable location

-is new, expanding, or changing its positioning

-faces strong competition

-Stresses price(too easy to match by competion. price should not be only strategy, otherwise you'll end up spending way more money)

-Industrial: products like chemicals, parts to computer, large indust. parts, etc

-Government: seats in class=purchased by state of florida but made by seat manufacturer

-Professional: Businesses buy form ad companies, medical equipment such as x-rays and MRI's are sold to businesses

-Making consumer goods

-Making other business & industrial goods and services -Facilitates the operation of a business (cash register, sensors on clothes)

-final users include middlemen (making producting and selling them to final industry) and industry(final product destination)

-complex buying situations

-key decision makers may be outside the company (EX: consultants are often brought in to make recommendations)

-sales reps are often needed to sell the product

-increase awareness of product, company and it's capabilities

-Create a favorable image(buying into partnership, so want to be with a business w/ good and respectable business)

-Lower the cost of selling(make each sale call efficient)

   *can talk more about product and promoting it instead of informing about your company & product bc you didn't advertise

-Markets are small and concentrated

-Each customer is large

-Consumer demand often drives markets (EX: you make bumpers for Cobalt but no one is buying the cars so you don't make as much now, and chevy leather)

-Minimal secondary data compared to consumer market (most research done w/ primary data, so much more expensive than consumer markets)

-Segmentation *markets vary according to geography and size of company

-technical and complex (customized products. EX: IBM makes different products for airports, universities, etc)

-built to specifications (when what 1 customer is buying is likely not what other one is, advertising is often vague EX: Quest)

Professional buyers are less "emotional" than consumer buyers bc purchasing process is different

-price often established through negotiation or bid (so many units of production by a certain date)

-channel is short, often direct right from distributor

1.Trade publications (dominant)- more $ is spent here than any other market in b2b

2.Direct mail(also popular) -Small targets(very segmented. customer base is small), minimal wasted coverage, detailed presentation

3.Catalogs(publication of product and prices)- Extensive list of standard products(not custom made like an office supply store), Independent distributors(sales rep that works for multiple companies)

4.Internet

5.Consumer media- stuff consumers are exposed to,Used w/ broad target markets (mags, phone, tv-super bowl, etc) EX: fed ex ad:overnight shipping every business uses it

-product attributes(most important)

-company attributes(also important)

-price (not as important) because so many of the products are customized

-Priorities differ in different departments of the company

-More rational than consumer advertising w/ B2B.more straightforward and generally won't see Brit Spears but still see emotion.

  *Emotion still important

-Testimonial (not celebs) *experts and peers(work in the field) bc of higher credibility and relatable

-Case history *Third person version of a testimonial (background example of what they have done in the past)

-Demonstration *show what the product does

-News *New product info ("introducing".."Now"..)

-Generic *Positions the company as expert in the field

  EX: IBM

Trade Shows -Very important for B2B. Exhibition of product category vendors' products in shows in large arenas where companies display products to buyers *sales leadsand generate sales(promo tools)

Specialty Items -Keeps the company name in front of the customer/awareness, permanent promo tools  (EX: calendars, post its, coozies, magnets, golf balls, etc)

Samples -Short purchase cycle, and lower priced items

-still a product, just a different type

-An object of a transaction, which does not involve the transfer of ownership of a tangible product (EX: car insurance..cover, protection or disney ad, selling service you don't actually get to take park home with you)

-Task or work that's performed *haircut, dentist, oil changed EX: Supercuts commercial

-Use of a facility *going to movies, hotel, golf EX: YMCA Commercial

-Use of a product *rental car, blockbuster EX: NetFlix

-Intangible

-Not able to be stored

-Not able to be transported

-intangibles are more difficult to assess

-Difficult to portray in advertising

-May need more advertising than physical products

Highly perishable services use strong price advertising and promotions

EX's: *Hotels raise prices when busy, raise prices on season lowers off season->manage demand *Bars have happy hour specials earlier *Movies have matinee prices

*airline flights

Service provider may serve limited geographic area

EX: hotel room availability: can't just move to weekend of graduation to other weekend

-Multiple production centers may mean variable quality control (EX: Mcd's 15,000 production centers can't try before pay for it

-Advertising may create expectations that can't be met (EX: Whopper commercials don't look like actual burger)

companies operating for a profit--

-Convenience: time and place saving, sometimes you have to pay fee for convenience. EX: FSU $5 dollar convenience fee for online payment

-Shopping: Difficult to evaluate prior to usage -Professional: Healthcare, legal, financial

NOT MUTUALLY EXCLUSIVE:

EX: H&R Block is convenient, won't know if you like them doing your taxes til they're done, and profess. cause it deals with your finances.

-issues -ideas -non-profit organizations -government

EX: Dog guide school and meth commercial

PROBLEMS *weak benefits (asks for behavioral change), limited personal satisfaction (EX: texting while driving "won't happen to me"), questionable demand (EX: FLying dwarf, didn't work bc demand wasn't there. men just don't care), psychic costs (sometimes whats asked is too difficult to do emotionally like give blood), insufficient budgets(most important problem, lack of funding, reliance on donations)

-Advertising is a toolto communicate. when used by itself it isn't as beneficial

-Companies use for their own purposes (create a profit and promote product)

Motivates consumers

*creates brand preference; demands created for brands rather than products is created by advertising

Showcases competitive advantages

*Benefits customers, Discussion of unique benefits *Maintain strong competitive position that helps consumer EX: $5 subway fl's vs. quiznos $5 fl's w/ more meat

Improves products

*Clear benefit when improved products meet needs Communication

*Most cost efficient way to communicate with a mass market