Chapter 16 – Using Effective Promotions
16-1
chapter
.
Using Effective
Promotions
what’s new in this edition 16.3
brief chapter outline and learning objectives 16.5
lecture outline and lecture notes 16.7
PowerPoint slide notes 16.43
lecture enhancers 16.60
lecture enhancer 16–1: MURPHY’S LAWS OF MARKETING 16.60
lecture enhancer 16–2: EFFECTIVE ADVERTISING: CELEBRITY VOICE-OVERS 16.61
lecture enhancer 16–3: MOBILE ADVERTISING OVERTAKES PRINT AND RADIO 16.61
lecture enhancer 16–4: FANS PROPEL THE PORTLAND TIMBERS TO DOMINANCE 16.62
lecture enhancer 16–5: UNDER ARMOUR WINS OLYMPIC PR GOLD 16.62
lecture enhancer 16-6: CONAN’S TWITTER TRIUMPH 16.63
critical thinking exercises 16.65
critical thinking exercise 16–1: ADVERTISING ON GOOGLE 16.65
critical thinking exercise 16–2: ADVERTISING APPEALS 16.66
critical thinking exercise 16–3: IDENTIFYING PRODUCT PLACEMENT 16.68
critical thinking exercise 16–4: ETHICS IN ADVERTISING 16.69
critical thinking exercise 16–5: DESIGNING A WEBSITE 16.70
16
Chapter 16 – Using Effective Promotions
16-2
bonus case 16.72
bonus case 16-1: RETAILERS KEEP TABS ON CUSTOMERS WITH BEACONS 16.72
Chapter 16 – Using Effective Promotions
16-3
what’s new in
this edition
additions to the 11th edition:
• Getting to Know Chris Hardwick
• Name That Company: Sony
• Adapting to Change: What Are Companies Yelping About?
• Reaching Beyond Our Borders: What’s in Your Oreo?
• Making Ethical Decisions: Pay-Per-Tweet
• Video Case: SXSW
revisions to the 11th edition:
• Statistical data and examples throughout the chapter were updated to reflect current information.
deletions from the 10th edition:
• Getting to Know Andrew Mason
• Name That Company: Dr. Pepper
• Spotlight on Small Business
• Social Media in Business
• Making Ethical Decisions
• Reaching Beyond Our Borders
Chapter 16 – Using Effective Promotions
16-4
Chapter 16 – Using Effective Promotions
16-5
brief chapter outline
and learning objectives
CHAPTER 16
USING EFFECTIVE PROMOTIONS
Getting to Know CHRIS HARDWICK of NERDIST INDUSTRIES
learning objective 1
Identify the new and traditional tools that make up the promotion mix.
I. PROMOTION AND THE PROMOTION MIX
learning objective 2
Contrast the advantages and disadvantages of various advertising
media, including the Internet and social media.
II. ADVERTISING: INFORMING, PERSUADING, AND REMINDING
A. Television Advertising
B. Product Placement
C. Infomercials
D. Online Advertising
E. Using Social Media to Monitor Ad Effectiveness
F. Global Advertising
learning objective 3
Illustrate the steps of the B2B and B2C selling processes.
III. PERSONAL SELLING: PROVIDING PERSONAL ATTENTION
A. Steps in the Selling Process
B. The Business–to-Consumer (B2C) Sales Process
learning objective 4
Describe the role of the public relations department, and show how
publicity fits in that role.
IV. PUBLIC RELATIONS: BUILDING RELATIONSHIPS
A. Publicity: The Talking Arm of PR
Chapter 16 – Using Effective Promotions
16-6
learning objective 5
Assess the effectiveness of various forms of sales promotion, includ-
ing sampling.
V. SALES PROMOTION: GIVING BUYERS INCENTIVES
learning objective 6
Show how word of mouth, viral marketing, blogging, podcasting, e–
mail marketing, and mobile marketing work.
VI. WORD OF MOUTH AND OTHER PROMOTIONAL TOOLS
A. Viral Marketing
B. Blogging
C. Podcasting
D. E-Mail Promotions
E. Mobile Marketing
VII. MANAGING THE PROMOTION MIX: PUTTING IT ALL TOGETHER
A. Promotional Strategies
VIII. SUMMARY
Chapter 16 – Using Effective Promotions
16-7
Getting to Know CHRIS HARDWICK of NERDIST INDUS-
TRIES
After trying to hit the big time for more than a decade, comedian Chris Hardwick
used his self–promotional knowhow to build a nerdy media empire.
learning objective 1
Identify the new and traditional tools that make up the promotion mix.
I. PROMOTION AND THE PROMOTION MIX
A. PROMOTION consists of all the techniques sellers
use to motivate people to buy their products or ser-
vices.
1. These tools include advertising, personal selling,
public relations, and sales promotion.
2. The combination of promotional tools an organi-
zation uses is called its PROMOTION MIX.
B. INTEGRATED MARKETING COMMUNICATION
(IMC) is a technique that combines all the promotion-
al tools into one comprehensive and unified promo-
tional strategy.
1. All promotional tools and company resources are
used to build better relationships with customers.
2. The emphasis today is integrating traditional me-
dia with social media.
This company put its product into the hands of Spiderman. Viewers watched as the superhero
used the product throughout his latest movie. Name that company.
(Students should read the chapter before guessing the company’s name: Sony.)
Chapter 16 – Using Effective Promotions
16-8
PPT 16-1
Chapter Title
Copyright © 2015 by the McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
Using
Effective
Promotions
CHAPTER 16
PPT 16-2
Learning Objectives
LEARNING OBJECTIVES
16-2
1. Identify the new and traditional tools that make up
the promotion mix.
2. Contrast the advantages and disadvantages of
various advertising media, including the Internet and
social media.
3. Illustrate the steps of the B2B and B2C selling
processes.
PPT 16-3
Learning Objectives
LEARNING OBJECTIVES
16-3
4. Describe the role of the public relations department,
and show how publicity fits in that role.
5. Assess the effectiveness of various forms of sales
promotion, including sampling.
6. Show how word of mouth, viral marketing, blogging,
podcasting, e-mail marketing, and mobile marketing
work.
PPT 16-4
Chris Hardwick
CHRIS HARDWICK
Nerdist Industries
16-4
• Hardwick broke into
entertainment after graduating
from UCLA.
• After his career hit a low, he
started following his nerd
passions and created The
Nerdist.
• Entered a partnership with
Peter Levin and expanded the
Nerdist franchise.
PPT 16-5
Name That Company
NAME that COMPANY
16-5
This company put its product into the hands of
Spiderman. Viewers watched as the superhero
used the product throughout his latest movie.
Name that company!
(See complete PowerPoint slide notes on page 16.43.)
lecture enhancer 16–1
MURPHY’S LAWS OF MARKETING
The study of marketing doesn’t always have to be serious and
academic. For a good shot of irreverence, try Murphy’s Laws by
Arthur Bloch. (See the complete lecture enhancer on page 16.60
of this manual.)
PPT 16-6
Promotion in an Organization
TEXT FIGURE 16.1
The Traditional Promotion Mix
• Promotion Mix — The combination of promotional
tools an organization uses. The traditional mix
includes:
PROMOTION
in an ORGANIZATION
16-6
LO 16-1
PPT 16-7
Integrated Marketing
Communication (IMC)
INTEGRATED MARKETING
COMMUNICATION (IMC)
16-7
LO 16-1
• Integrated Marketing Communication (IMC) —
Combines the promotional tools into one
comprehensive strategy. IMC is used to:
– Create a positive brand image.
– Meet the needs of consumers.
– Meet the strategic marketing and promotional
goals of the firm.
Chapter 16 – Using Effective Promotions
16-9
learning objective 2
Contrast the advantages and disadvantages of various advertising media, including
the Internet and social media.
II. ADVERTISING: INFORMING, PERSUADING, AND
REMINDING
A. ADVERTISING is paid, nonpersonal communication
through various media by organizations and individuals
who are in some way identified in the advertising mes-
sage.
1. PROPAGANDA is nonpersonal communication
that does not have an identified sponsor.
2. Total ad volume exceeded $215 billion in 2013.
a. TELEVISION is the number one advertising
medium in terms of total dollars spent.
b. DIRECT MAIL is number two.
c. NEWSPAPERS and DIRECTORIES are falling
because of mobile media.
3. The public BENEFITS FROM ADVERTISING:
a. Advertising is informative–it provides infor-
mation about products, prices, features, and so
on.
b. Advertising provides us with free TV and radio
programs, because advertisers cover most of
the production costs.
c. Advertising costs cover the major costs of pro-
ducing newspapers and magazines.
4. Newspapers, radio, and the Yellow Pages are es-
pecially attractive to LOCAL ADVERTISERS.
5. Marketers must choose which media and which
programs will best reach the audience they desire.
a. RADIO ADVERTISING is less expensive than
Chapter 16 – Using Effective Promotions
16-10
PPT 16-8
Steps in a Promotional Campaign
TEXT FIGURE 16.2
Steps in a Promotional Campaign
STEPS in a
PROMOTIONAL CAMPAIGN
16-8
LO 16-1
1. Identify a target market
2. Define objectives
3. Determine a promotional budget
4. Develop a unifying message
5. Implement the plan
6. Evaluate effectiveness
PPT 16-9
Classic Campaigns
CLASSIC CAMPAIGNS
Brilliant Marketing Ideas
16-9
Campaign Company Why it’s Cool
A Diamond is Forever De Beers Since 1939, it’s been tapping
into our emotions.
Marlboro ManMarlboro He’s the most successful trade
character ever.
Does she… or doesn’t she? ClairolThe birth of the “shock ad” in
1957.
1984 Apple The uncommercial didn’t
explain the product.
Source: Entrepreneur, www.entrepreneur.com, accessed November 2014.
LO 16-1
PPT 16-10
Advertising in the Firm
ADVERTISING in the FIRM
16-10
LO 16-2
• Advertising — Paid, non-
personal communication
through various media by
organizations and individuals
who are in some way
indentified in the message.
• Major goals of advertising:
– Inform
– Persuade
– Remind
PPT 16-11
Impact of Advertising
IMPACT of ADVERTISING
16-11
LO 16-2
• Total advertising expenditures
exceed $215 billion yearly.
• Consumers benefit because
production costs of TV
programs, radio programs,
newspapers and magazines are
paid for by advertisers.
• Marketers choose ad media
that will reach the target market.
PPT 16-12
Major Categories of Advertising
TEXT FIGURE 16.3
Major Categories of Advertising
MAJOR CATEGORIES of
ADVERTISING
Category What it is
Retail From retail stores to consumers
Trade From manufacturers to wholesalers and retailers
B2B From manufacturers to other manufacturers
Institutional Creates a desirable image for an organization
Product Creates a desirable image for a product or service
16-12
LO 16-2
PPT 16-13
Major Categories of Advertising
MAJOR CATEGORIES of
ADVERTISING
Category What it is
Advocacy Supports a particular view of an issue
Comparative Compares competing products
Interactive Customer-oriented ads that allows customers to
choose information to receive
Online Computer ads featured on different sites
Mobile Ads that reach consumers on cell phones
16-13
LO 16-2
PPT 16-14
Advertising Expenditures by Media
in $ Millions
TEXT FIGURE 16.4
Advertising Expenditure by Media
(in millions of dollars)
ADVERTISING EXPENDITURE by
MEDIA in $ MILLIONS
16-14
LO 16-2
Chapter 16 – Using Effective Promotions
16-11
TV advertising and often reaches people
when they have few distractions.
6. Mobile marketing can include text messages,
reminders, and recipes.
7. Appealing to consumers through green market-
ing has also been successful.
B. TELEVISION ADVERTISING
1. TV has many advantages to national advertis-
ers, but it is expensive.
2. However, few other media can REACH AS
MANY PEOPLE with such impact.
3. TV advertising is still a dominant medium de-
spite growth in alternative media advertising.
4. New services, such as video on demand and
DVRs, make it difficult for TV advertisers to
reach consumers.
C. PRODUCT PLACEMENT
1. PRODUCT PLACEMENT is putting products in-
to TV shows and movies where they will be
seen.
2. Another type of placement puts products into
video games.
D. INFOMERCIALS
1. An INFOMERCIAL is a full-length TV program
devoted exclusively to promoting goods and
services.
2. They are so successful because they show the
product in great detail.
3. A half-hour infomercial is the equivalent of send-
Chapter 16 – Using Effective Promotions
16-12
PPT 16-15
Dear Mr. Postman . . .
1. Plan: What should your mailing accomplish?
2. Get the Right List: The better the list, the better
your chance of success.
DEAR MR. POSTMAN…
Steps in Launching a Direct-Mail Campaign
16-15
LO 16-2
3. Stand Out: Make your ad like
no other.
4. Get Help: Contact a marketing
firm with direct mail experience.
5. Follow Up: One mailing is not
enough.
TEXT FIGURE 16.5
Advantages and Disadvantages of
Various Advertising Media
This text figure presents the advantages and disadvantages of
various advertising media to the advertiser.
PPT 16-16
Match Game
MATCH GAME
Match the Company with the Slogan
16-16
LO 16-2
• “Everybody doesn’t like something, but nobody
doesn’t like ___________.”
• “We bring good things to life.”
• “It takes a licking and keeps on ticking.”
• “With a name like _________, it has to be good.”
• “Good to the last drop.”
• “Betcha can’t eat just one!”
• “Because you’re worth it.”
lecture enhancer 16–2
EFFECTIVE ADVERTISING:
CELEBRITY VOICE-OVERS
Celebrity voice-overs are effective in reaching consumers, but
are most effective when consumers can’t quite identify the ce-
lebrity. (See the complete lecture enhancer on page 16.61 of this
manual.)
PPT 16-17
It’s a Dog’s Life
IT’S a DOG’S LIFE
Famous and Not-so-Famous Dogs in Advertising
16-17
Pooch Company
Nipper RCA
Tige Buster Brown Shoes
Chihuahua Taco Bell
Spuds McKenzie Bud Light
McGruff The Crime Dog
Duke Bush’s Beans
Bullseye Target
LO 16-2
lecture enhancer 16–3
MOBILE ADVERTISING OVER-
TAKES PRINT AND RADIO
By the end of 2014, advertisers spent more on mobile advertis-
ing than old media. (See the complete lecture enhancer on page
16.61 of this manual.)
PPT 16-18
Popular Advertising Media
• TV advertising is still the dominant media.
• Digital Video Recorders (DVRs) challenge TV
advertising because viewers can skip ads.
POPULAR ADVERTISING MEDIA
16-18
LO 16-2
• Product Placement —
Advertisers pay to put
their products into TV
shows and movies where
the audience will see
them.
PPT 16-19
Not Quite the NFL…
NOT QUITE the NBA…
16-19
LO 16-2
Sport Cost Why?
Equestrian $15,000+ The demographic skews to high-
income females.
Bowling $20,000+
It’s shown on television and
lower cost than other televised
sports.
Surfing $25,000+ The young market is responsive
to guerrilla marketing.
Women’s Golf $50,000+
A popular sport in Europe and
Asia and great for global
companies.
Source: Inc., www.inc.com, accessed November 2014.
PPT 16-20
Infomercials and Online Advertising
INFOMERCIALS and
ONLINE ADVERTISING
16-20
LO 16-2
• Infomercial — A full length TV program
devoted exclusively to promote a
particular product.
• Online ads are attempts to get potential
customers to a web site to learn about a
product.
• Interactive Promotion — Allows
marketers to open a dialogue between
buyers and sellers and let them work
together to create a beneficial
exchange.
Chapter 16 – Using Effective Promotions
16-13
ing your best salespeople into a person’s home.
4. Some products, such as real estate programs
and workout tapes, are hard to sell without
showing testimonials.
E. ONLINE ADVERTISING
1. Some advertisers are putting their ads online.
a. Marketers can reach customers as they are
researching their product through advertising
on popular online sites.
b. If users click through an ad to the website,
the company gets to interact with the cus-
tomer.
c. The goal is to GET CUSTOMERS AND PO-
TENTIAL CUSTOMERS TO A WEBSITE
where they can learn more about the com-
pany and its products.
2. E-MAIL MARKETING has become a huge com-
ponent of online advertising.
3. However, advertisers have to be careful not to
overuse it because customers can rebel.
4. INTERACTIVE PROMOTION is a promotion
process that allows marketers to go beyond a
monologue, where sellers tried to persuade
buyers to buy things, to a dialogue in which buy-
ers and sellers can work together to create mu-
tually beneficial exchange relationships.
5. TECHNOLOGY has improved the speed and
potential of Internet dialogues.
Chapter 16 – Using Effective Promotions
16-14
PPT 16-21
Infomercial Hall of Fame
INFOMERCIAL HALL of FAME
The Biggest Hits Over the Past 40 Years
Source: Fortune, www.fortune.com, accessed November 2014. 16-21
LO 16-2
• Veg-O-Matic
• Ginsu Knives
• The Clapper
• Thigh Master
• George Foreman Grill
• Bowflex
critical thinking
exercise 16-1
ADVERTISING ON GOOGLE
A popular method of online advertising is buying an ad on a
search engine such as Google. This exercise lets students ex-
plore exactly what this involves. (See the complete exercise on
page 16.65 of this manual.)
critical thinking
exercise 16-2
ADVERTISING APPEALS
This exercise explores the different advertising appeals that
marketers use in television advertising. (See the complete ex-
ercise on page 16.66 of this manual.)
critical thinking
exercise 16-3
IDENTIFYING PRODUCT
PLACEMENT
This exercise asks students to watch prime-time television to
identify product placements in television shows. (See the
complete exercise on page 16.68 of this manual.)
PPT 16-22
Online Experience
ONLINE EXPERIENCE
How to Avoid Losing Customers Over a Bad Web Site
Source: Entrepreneur, www.entrepreneur.com, accessed November 2014. 16-22
LO 16-2
1. Brand messaging is key.
2. Site must be easy to
navigate.
3. Make sure calls to action
are effective.
4. Users want fast, readable
sites.
5. Users with disabilities
should be able to navigate.
MAKING
ethical
decisions
PPT 16-23
Pay-Per-Tweet
PAY-PER-TWEET
16-23
• Celebrities can earn large sums
of money just buy mentioning a
product or site in their tweets.
• Do you think it is ethical for
celebrities to get paid to tweet
pre-written ads that appear to be
their own personal comments?
Chapter 16 – Using Effective Promotions
16-15
a. Many companies provide online videos, chat
rooms, and other services in a virtual store
where customer can ask questions, examine
goods, and buy products.
b. The Internet is fundamentally changing the
way marketers work with customers.
c. The current trend in Internet marketing is to
BUILD RELATIONSHIPS with customers
over time.
6. Advertisers can track how many people click
through the commercial and what websites they
read and watch.
F. USING SOCIAL MEDIA TO MONITOR AD EFFEC-
TIVENESS
1. Social media have made it possible for compa-
nies to test ads before airing them.
2. The text uses the example of Dr. Pepper’s Fa-
cebook page.
3. Social media also allow top managers into the
customer–company dialogue.
G. GLOBAL ADVERTISING
1. GLOBAL ADVERTISING refers to developing a
product and promotional strategy that can be
implemented worldwide.
2. Because of differences in culture, language, and
buying habits, promotional efforts designed spe-
cifically for individual countries may work best.
3. Getting the words right in international advertis-