GETTING TO KNOW MEG WHITMAN FROM EBAY
GETTING TO KNOW DAN WIEDEN of WIEDEN AND KENNEDY. The profile at the beginning of the chapter focuses on Dan Wieden. Wieden’s company is known as one of the most creative advertising agencies in the U.S.
I. PROMOTION AND THE PROMOTION MIX.
LEARNING GOAL 1
Define promotion and list the four traditional tools that make up the promotion mix.
A. PROMOTION is an effort by marketers to inform and remind people in the target market and about products and to persuade them to participate in the exchange.
1. These tools include advertising, personal selling, public relations, and sales promotion.
2. The combination of promotional tools an organization uses is called its PROMOTION MIX.
B. INTEGRATED MARKETING COMMUNICATION (IMC) is a technique that combines all the promotional tools into one comprehensive and unified promotional strategy.
1. Lately companies have added Internet promotions to the mix.
2. All the promotional tools and company resources are used to create a positive brand image and meet company goals.
II. ADVERTISING: PERSUASIVE COMMUNICATION.
LEARNING GOAL 2
Define advertising and describe the advantages and disadvantages of various advertising media, including the Internet.
A. ADVERTISING is paid, nonpersonal communication through various media by organizations and individuals who are in some way identified in the advertising message.
1. The total ad volume exceeds $231 billion yearly.
a. Television is the number one advertising medium in terms of total dollars spent (23% of total.)
b. DIRECT MAIL is number two, with 19.3%.
c. NEWSPAPERS are a close third, with 19.2% of the total.
d. INTERNET ADVERTISING still takes less than 2.5% of total expenditures.
2. The public BENEFITS FROM ADVERTISING in the following ways:
a. Advertising is INFORMATIVE–it provides information 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 producing newspapers and magazines.
3. Newspapers, radio, and the Yellow Pages are especially attractive to LOCAL ADVERTISERS.
4. TV has many advantages to national advertisers, but it is expensive.
a. However, there are few other media that reach as many people with such impact.
b. PRODUCT PLACEMENT is putting products into TV shows and movies where they will be seen.
c. Marketers must choose which media and which programs can best be used to reach the audience they desire.
d. RADIO ADVERTISING is less expensive than TV advertising and often reaches people when they have few distractions.
B. THE GROWING USE OF 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. Some products, such as work-out tapes, are hard to sell without showing testimonials.
C. ADVERTISING AND PROMOTION ON THE INTERNET.
1. Advertising on the Internet is a relatively new phenomenon in marketing.
a. Although most people tend to ignore Internet ads, companies continue to use
them hoping to tap into the huge online marketing potential.
b. The goal is to get customers and potential customers to a website where they can learn more about the company and its products.
2. 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 buyers and sellers can work together to create mutually beneficial exchange relationships.
3. The text uses the example of ’s interactive website.
4. Technology has improved the speed and potential of Internet dialogues.
5. The current trend in Internet marketing is to build relationships with customers over time.
D. GLOBAL ADVERTISING.
1. GLOBAL ADVERTISING refers to developing a product and promotional strategy that can be implemented worldwide.
2. Promotion targeted at specific countries may be more successful since each has its own culture, language, and buying habits.
3. Because of cultural differences, promotional efforts designed specifically for individual countries may work best.
4. Getting the words right in international advertising is critical, but tricky.
5. International advertising calls for researching the wants and needs of people in each country.
6. Even in the U.S., selected groups are large enough and different enough to call for specially designed promotions.
7. Advertising today is moving from globalism (one ad for everyone in the world) to regionalism (specific ads for each country or for specific groups within a country.)
III. PERSONAL SELLING: PROVIDING PERSONAL ATTENTION.
LEARNING GOAL 3
Illustrate the steps of B2B and B2C selling process, and discuss the role of a consultative salesperson.
A. PERSONAL SELLING is the face-to-face presentation and promotion of products and services
1. It also involves searching out prospects and providing follow-up service after the sale.
2. Effective selling today is more than persuading others to buy; it is helping them to satisfy their wants and needs.
3. Salespeople now use technology, such as the Internet, portable computers, and fax machines, to help customers and to complete the sale.
4. It is costly to provide personal attention for customers, so some companies are replacing salespeople with Internet services.
5. Nearly 10% of the total labor force is employed in personal selling.
6. The average cost of a single sales call to a potential B2B buyer is about $400.
B. STEPS IN THE SELLING PROCESS.
1. Consumer relationship management (CRM) is becoming critically important to establishing long-term relationships with customers.
a. The selling process is similar for B2B and for consumer products.
b. In both, it is critical for the salesperson to know the product well and know how the product compares to those of competitors.
2. STEP 1: PROSPECT AND QUALIFY.
a. PROSPECTING involves researching potential buyers and choosing those most likely to buy.
b. QUALIFYING means making sure that people have the NEED for a product, the AUTHORITY to buy, and the WILLINGNESS to listen to a sales message (the PROSPECT).
c. The best prospects are people at companies who were recommended to you by others who use your product.
3. STEP 2: PREAPPROACH.
a. Before making a sales call, sales representatives must do further research.
b. Salespeople should learn as much as possible about customers and their wants and needs.
c. All this information should be in a database.
d. Gathering information before the sale takes place is critical.
4. STEP 3: APPROACH.
a. You don’t have a second chance to make a first impression.
b. Try to give an impression of friendly professionalism to create rapport, to build credibility, and to start a relationship.
5. STEP 4: MAKE PRESENTATION.
a. The idea is to match the benefits of your value package to the client’s needs.
b. CRM software provides technical tools to tailor the presentation.
c. This is a good time to use testimonials.
6. STEP 5: ANSWER OBJECTIONS.
a. A salesperson should anticipate potential objections and determine proper responses.
b. Questions should be viewed as opportunities for creating better relationships.
7. STEP 6: CLOSE SALE.
a. The trial close is a step in the selling process that consists of a question or statement that moves the selling process toward the actual close.
b. The final step is to ask for the order.
c. Salespeople must close many times before a long-term relationship is established.
8. STEP 7: FOLLOW UP.
a. Selling is more than simply sales, it is a matter of establishing relationships, not just selling goods and services.
b. Follow-up includes handling customer complaints, making sure that the customer’s questions are answered, and supplying what the customer wants.
c. Often customer service is as important to the sale as the product itself.
9. The selling process varies somewhat among different goods and services, but the general idea is the same.
a. The goal is to help the buyer buy and make sure the buyer is satisfied after the sale.
b. SALES FORCE AUTOMATION (SFA) includes software programs that help salespeople design products, close deals, tap into intranets, and more.
C. USING TECHNOLOGY TO PRACTICE CONSULTATIVE SELLING.
1. B2B customers are buying more goods over the Internet.
2. B2B salespeople will have new roles to play in the future.
3. A CONSULTATIVE SALESPERSON is a salesperson who begins by analyzing customer needs and then comes up with solutions to those needs.
4. Selling to the consumer market will change as dramatically as selling to the B2B market has.
5. Customers will often have already researched the product on the Internet.
6. Consumer market salespeople also must function as consultants.
7. Salespeople need to be computer proficient.
8. There is still a need for traditional salespeople, but such agents will be fewer and will be paid less than consultative salespeople.
D. The Business-to-consumer (B2C) Sales process.
1. B2C selling differs from B2B selling.
a. In B2C sales the salesperson does not have to do much prospecting or qualifying.
b. Retail salespeople don’t usually have to go through a preapproach step.
2. The first formal step in the B2C process is the approach.
3. After the initial approach, a salesperson then makes a presentation to show customers how the company’s products meet their needs.
4. In B2C selling, it is important to make a trial close, walking a fine line between being helpful and being pushy.
5. After-sale follow-up is an important but often neglected step in B2C sales.
IV. PUBLIC RELATIONS: BUILDING RELATIONSHIPS WITH ALL PUBLICS.
LEARNING GOAL 4
Describe the role of the public relations department, and tell how publicity fits in that role.
A. PUBLIC RELATIONS.
1. PUBLIC RELATIONS (PR) is the management function that evaluates public attitudes, changes policies and procedures in response to the public’s requests, and executes a program of action and information to earn public understanding and acceptance.
2. A GOOD PUBLIC RELATIONS PROGRAM HAS THREE STEPS:
a. Listen to the public; start with good marketing research.
b. Change policies and procedures to have practices in the public interest.
c. Inform people of the fact that you’re being responsive to their needs.
3. Public relations demands a dialogue with customers so that information can be exchanged over time.
a. PR is taking a more active role in listening to consumers and working with them to handle problems.
b. PR must establish good relationships with production and service people so they can answer customer questions quickly.
4. It is hard to find a PR firm to work with–PR has become one of the three fastest-growing industries in the country.
5. The text uses the example of Yahoo, whose success is directly attributable to its long-term PR strategy.
6. The public relations department has responsibility for maintaining close relationships with the media, community leaders, government officials, and other stakeholders.
B. PUBLICITY: THE TALKING ARM OF PR.
1. PUBLICITY is any information about an individual, product, or an organization that is distributed to the public through the media, and that is not paid for or controlled by the sponsor.
a. Publicity works only if the media finds the material interesting or newsworthy.
b. The text uses the example of the use of PR in the introduction of the Segway.
2. DISADVANTAGES OF PUBLICITY include:
a. Marketers HAVE NO CONTROL over how, when, or if the media will use the story.
b. Media DOES NOT HAVE TO PUBLISH IT.
c. The story can be ALTERED so it’s not positive.
d. There IS such a thing as BAD publicity.
e. Stories are NOT LIKELY TO BE REPEATED; advertising can be repeated as often as needed.
3. To see that publicity is handled well by the media, the marketer should establish a friendly relationship with the media and cooperate with them.
V. SALES PROMOTION: GETTING A GOOD DEAL
LEARNING GOAL 5
Explain the importance of various forms of sales promotion, including sampling, word of mouth, and viral marketing, and tell how they are affected by new technologies.
A. SALES PROMOTION.
1. SALES PROMOTION is the promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities.
a. Examples of consumer sales promotions include free samples, cents-off coupons, and prizes.
b. Sales promotion programs are designed to supplement personal selling, advertising,
and public relations by creating enthusiasm for the overall promotional program.
2. INTERNAL SALES PROMOTION (within company) generate employee enthusiasm about a product, including:
a. Sales training.
b. Development of sales aids such as flip charts, portable audiovisual displays, and videotapes.
c. Participation in trade shows.
3. EXTERNAL SALES PROMOTION (outside company, including distributors and dealers):
a. It is important to get distributors and dealers involved so they too are enthusiastic.
b. Trade shows are important because buyers are able to see products from many different sellers.
c. Virtual trade shows—trade shows on the Internet—enable buyers to see many products without leaving the office.
4. The next step is to PROMOTE TO FINAL CONSUMERS.
a. Techniques include samples, coupons, cents-off deals, displays, contests, rebates, and so on.
b. Sales promotion is an ongoing effort to maintain enthusiasm.
B. SAMPLING IS A POWERFUL SALES PROMOTION TOOL.
1. SAMPLING is a promotional tool in which a company lets consumers have a small sample of a product for no charge.
2. Using sampling in grocery stores is a quick, effective way of demonstrating a product’s superiority at the time consumers are making a purchase decision.
3. Companies use sampling in conjunction with other techniques such as event marketing.
4. The text uses the example of Pepsi’s introduction of Fruit Works.
C. Word-of-mouth is one of the most effective promotional tools.
1. WORD-OF-MOUTH PROMOTION is a promotional tool that involves people telling other people about products they have purchased.
2. Anything that encourages people to talk favorably about an organization is effective word of mouth.
3. Clever commercials and samples can generate word of mouth.
D. VIRAL MARKETING AND OTHER WORD-OF-MOUTH STRATEGIES.
1. Some companies have begun creating word-of-mouth by paying people to go online and hype the product in chat rooms.
2. These people get free tickets, T-shirts, and other merchandise that the industry calls SWAG.
3. VIRAL MARKETING is the term now used to describe everything from paying people to say positive things on the Internet to setting up multilevel selling schemes whereby consumers get commissions for directing friends to specific websites.
4. Websites such as Barnes & Nobles pay a commission for customer recommendations.
5. An effective strategy for spreading word of mouth is to send TESTIMONIALS to current customers.
a. These are effective in confirming customers’ belief that they chose the right company.
b. Some companies make it a habit to ask customers for referrals.
c. However, negative word of mouth can hurt a firm.
d. Upset customers are now going on the Internet and publishing their complaints.
E. HOW NEW TECHNOLOGIES ARE AFFECTING PROMOTION.
1. As people purchase goods and services on the Internet, companies keep track of these purchases and gather facts about these customers.
2. Using this information companies are able to design catalogs and brochures specifically to meet individual customer needs.
3. Companies are using traditional promotional tools less and putting more money into direct marketing.
4. New technologies offer consumers a continuous connection to the Internet and enable marketers to send video files and to interact with consumers in real time.
5. You can also search the Net for the best prices and find product information.
6. Promotion has become more INTERACTIVE.
VI. MANAGING THE PROMOTION MIX: PUTTING IT ALL TOGETHER.
LEARNING GOAL 6
Describe integrated marketing communication and the role of interactive communications within it.
A. Each target group calls for a separate promotion mix.
1. Large, homogenous groups of consumers are most efficiently reached through ADVERTISING.
2. Large organizations are best reached through PERSONAL SELLING.
3. SALES PROMOTION motivates people to buy now rather than later.
4. PUBLICITY adds support to the other efforts and can create a good impression.
5. WORD OF MOUTH is often the most powerful promotional tool.
B. PROMOTION STRATEGIES.
1. In a PUSH STRATEGY the producer uses advertising, personal selling, sales promotion, and all
other promotional tools to convince wholesalers and retailer to stock and sell merchandise.
2. In a PULL STRATEGY heavy advertising and sales promotion efforts are directed toward consumers so they will request the products from retailers.
3. A company can use both push and pull strategies at the same time.
4. The latest in pull and push strategies are being conducted on the Internet.
5. It is important to make promotion part of a total systems approach to marketing.
a. Thus promotion would be an integral part of supply chain efforts.
b. The idea would be to develop a value package to appeal to everyone: manufacturers, distributors, retailers, and consumers.
C. CREATING AN INTEGRATED MARKETING COMMUNICATION (IMC) SYSTEMS.
1. An INTEGRATED MARKETING COMMUNICATION SYSTEM (IMC) is a formal mechanism for uniting all the promotional efforts in an organization to make it more responsive to its customers and other stakeholders.
a. In the past, advertising was created by ad agencies, public relations by PR firms, and so forth, with little coordination.
b. Customers could receive conflicting messages about products.
2. Today companies are trying to create an integrated approach.
a. To implement an IMC system, you start with customers and stakeholders and their information needs.
b. All messages should be consistent and coordinated.
D. BUILDING INTERACTIVE MARKETING PROGRAMS.
1. An INTEGRATED MARKETING PROGRAM is a system in which consumers can access company information on their own and supply information about themselves in an ongoing dialogue; the basic steps are as follows.
2. Constantly GATHER DATA about the groups affected by the organization (including customers, potential customers, and other stakeholders.)
a. An information database is critical to any successful program.
b. A company can gather such data from sales transactions, letters, e-mail, and faxes–or hire companies that specialize in gathering such data.
3. RESPOND QUICKLY to customer and other stakeholder information by adjusting company
policies and practices and by designing wanted products.
a. A responsive firm adapts to changing wants and needs quickly.
b. It is important for the marketing department to work closely with the information system department to make the process of ordering fast and smooth.
4. Make it possible for customers to OBTAIN INFORMATION that they need to make a purchase.
5. The advantages of interactive marketing include:
a. Information is available 24/7.
b. Ads and catalogs can be updated continually.
c. Buyers and sellers can engage in a dialogue over time.
d. It can be used by small as well as large businesses.
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