-Promotional Goals -Integrated Marketing Communications -Factors affecting the promotional mix [SLIDE 1] While there may be multiple interim promotional goals (read a specific target market, stay within budget), the ultimate goal of any promotion is to get someone to purchase a good or service. In the case of nonprofits, that means taking an action such as donating or volunteering. One classic model for reaching promotional goals is AIDA, an acronym that stands for Attention, Interest, Desire, and Action. [SLIDE 2] The AIDA model puts forward four phases of the promotional process. Attention The advertiser must first gain the attention of the target market. Customers will not buy a product they do not know exists. For instance, for iPads and iPhones, Apple first had to make the market aware that the products had been released. Interest Marketing must then create interest in the product. Advertising often is not sufficient. Apple demonstrated the products to the media and directly to the market. Desire After there is interest, want or need for the product must be addressed. Apple created a brand preference through a focus on iTunes, lighter weight than competitive products, and other benefits and features that helped created desire. Action Get the market to purchase the product. Once there is desire, the product must be available for purchase the product. Continued advertising, including information about how to purchase, helped Apple gain a significant portion of the tablet and smart phone markets. [SLIDE 3] There are a number tools mentioned in the previous lesson for building the promotional mix. They can address the different steps of the AIDA model. -Advertising & public relations: These tools are best utilized in creating attention and interest while not being effective in creating action. -Sales promotion: Primarily used to create desire and to drive the purchase action. -Personal selling: This tool is similar to sales promotions but the personal relationship can also help create interest. -Social media: This is best used to create attention and drive interest, but it can also be more effective than advertising and PR for creating desire and action. [SLIDE 4] We have discussed the variety of promotional tools and communications channels available to marketing. The danger is that messages can vary and provide confusion to the target market. Integrated marketing communications is the coordination of all promotional messages for a product to ensure the consistency of messages at every contact point at which a company meets the market. Decades ago, cable television began the major breakdown of the mass market mindset. Today, the Internet provides enough information that more finely-tuned markets and even one-to-one targeted marketing is happening. That means that integrated marketing must be a core part of the promotional strategy. [SLIDE 5] Promotional mixes vary a great deal from one product or industry to the next. While the previously mentioned tools (advertising, public relations, sales promotions, personal selling, social media) are universal, the nature of markets have an impact on how the tools are used to create a promotional mix. The major factors impacting the promotional mix are: -Nature of the product -Stages in the product life cycle -Target market characteristics -Type of buying decision -Available funds -Push and pull strategies [SLIDE 6] The nature of the product can have an impact on the promotional mix. The previously discussed difference between business and consumer products has a clear impact. Business products are more likely to be customized and at a higher price. That means more personal selling is used and advertising is often limited to getting attention. Consumer products are more likely to be mass produced and widely distributed, with radio and television advertising reaching the wider audience. The cost of product, as mentioned above, has an impact on the marketing mix. Just as in the B2B world, luxury goods aimed at B2C can be a higher price that requires more personal selling. Cars and homes are examples of infrequently purchased items which require far more personal selling that most consumer goods. Previous lessons have discussed the impact of social views on buying decisions. The advent of social media has increased that impact. People who perceive a social risk in a purchase require a different promotional mix than do people who do not consider the same in a purchase. For instance, some people will buy a loaf of bread as a standard without any significant consideration. Other buyers want organic products and recyclable packaging. The latter group needs to be addressed differently than the former by a promotional mix that provide both information and emotional support for a social need. [SLIDE 7] Purchasers in different stages of the product lifecycle are looking for different things in their decision-making processes so the promotional mix must change with the product life cycle stage. Some of the basics for each stage are: -Pre-Introduction: Publicity; small amounts of advertising near introduction; public relations. -Introduction: Heavy advertising and public relations to build awareness; sales promotion to induce trial; personal selling to obtain distribution. -Growth: Heavy advertising and public relations to build brand loyalty; decreasing use of sales promotion; personal selling to maintain distribution., -Maturity: Advertising slightly decreased and more persuasive and reminder in nature; increased use of sales promotion to build market share; personal selling maintained. -Decline: Advertising and public relations drastically decrease; sales promotion and personal selling maintained at low level. [SLIDE 8] Many differences in target markets can impact the promotional mix. Three key variables are: -Concentrated or dispersed: The more dispersed a market is, the more advertising is key to reaching the target market. -Educated: The more educated the buyers are about the products, the less personal selling is usually needed. However, high priced products still require personal selling even with an educated market in order to build the relationship. -Brand loyalty: The lower brand loyalty is, the more advertising is needed to reach customers and take market share, but personal selling can still be important to retain that loyalty. One caveat about dispersed and hard to find audiences: the Internet is a critical avenue to the promotional mix that can lower the costs to reach those customers. Online queries and phone calls can also now be used to provide personal selling without the need for a physical presence. [SLIDE 9] The type of buying decision also impacts the promotional mix. For instance, the purchase of milk or toothpaste is a fairly standard, relatively non-complex purchase. Advertising to remind people about the brands and sales promotions can help drive routine purchases. Some purchases are not routine but are also not that complex, such as an occasional purchase of a special wine for a dinner. Public relations and advertising can help drive awareness of a specific brand of wine. Social media can be used to share reviews of the wine. The more complex a purchase decision, the larger part that can be played by personal selling. Cars, as often mentioned, fall in this category. While lots of information is online, from price guides such as the Kelly Blue Book, to product review sites such as Consumer Reports, a purchaser can find much information about vehicles. Still, the person is still most likely to show up at a dealership to talk to a salesperson and test drive a car. Personal selling can be the deciding factor [SLIDE 10] Money, or the lack of it, may easily be the most important factor in determining the promotional mix. Just as money matters for the buyer, it matters for what kind of a marketing mix a seller can create. Advertising costs vary greatly. Some online sites are very inexpensive and Search Engine Marketing (SEM) can be affordable. However, linking an ad to a highly searched term can be expensive. In the same way, advertising costs will be lower in a local newspaper or web site than in the Wall Street Journal. Late night television in a local market is far less expensive than an ad during the Super Bowl. A company must look at the target market, calculate the cost per contact for the different promotional methods, and then pick a promotional mix that best reaches the widest contacts within budgetary constraints. [SLIDE 11] There are two key techniques for getting product to the markets. While companies usually create a blended approach, it is important to understand the difference. A push strategy is where the manufacturer aggressively advertises and uses personal selling to convince a wholesaler or retailer to carry and sell the products. In a competitive environment, such as that for gaining access to crowded grocery store shelf space, a push strategy is the primary one for most producers. A pull strategy is where the manufacturer focuses on the purchasers, creating a demand for the product so that the distribution channel wants to meet that demand. A new product launch typically involves leveraging both strategies. By driving consumer demand through advertising and social media while the manufacturer also uses personal selling and public relations within the channels, a manufacturer can better convince a distribution channel to carry the product.