MGTA02H3 Chapter Notes - Chapter 5: Life Insurance, 8 Seconds, Maximum Exposure
Chapter 5
Promotion & Place: Making Products Known, Easy To Find and Easy To Get
Promotion
A business cannot sell the product if people in the target market do not know about it
Educate, excite, and inform potential customers about self and products
Promotion: Any technique used to inform, education, and excite potential customers about a
business and its products, and to induce them to buy
oRaise awareness
oCreate interest
oStimulate sales
4 Goals of Promotion:
oMake customers aware of products
oMake customers knowledgeable about products
oPersuade customers to like products
oPersuade customers to purchase products
The Buyer Decision Process
Buyers go through a Five Stage Process:
1. Problem or need recognition
2. Information search
3. Evaluation of alternatives
4. Purchase decision
5. Post-purchase evaluation
a. Comparing what one has received to ones expectations
Not all customers go through all stages every time
Buyer Decision Process: A five stage process that most consumers go through before and after
buying a good or service
Promotional Mix
Four Promotional Methods
1. Advertising Need Recognition, Search for and evaluate alternatives, Post-Purchase evaluation
2. Personal selling Information Seeking, Purchase Decision, Post-Purchase Evaluation
3. Sales Promotion Search for and evaluate alternatives, Purchase Decision
4. Publicity and Public Relations Post-Purchase Evaluation
Image Building
oAdvertising helps in building brand image
oMost effective in delivering message regarding perceived value of the product/service
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oBusinesses are required to take responsibility for the content
Most companies spend 10% of their revenues on promotion
Promotional Mix: The combination of advertising, personal selling, sales promotions, publicity, and
public relations – that a business uses
Advertising
Advertising: Paid, non-personal communication used to raise awareness about the business and its
products
Advertising messages are most effective after they have been repeated and reinforced
The human attention span is 8 seconds
Useful for raising awareness
Must be strategic about who sees the advertisements and what mediums are used
Radio advertisements last up to 30 seconds, and we look at print ads for less than that time
Ads are less effective at educating
Not effective at closing the sale
Customers tend to ignore most of the advertising messages they receive
Advertising media: The specific communication devices or channel used to carry a seller’s message
to the target market
Good campaigns use lots of these media to address potential customers at each stage of purchasing
process
Try to reinforce the awareness as much as possible
Who do I want to reach? What do I want them to learn or to know?
Spending more money on internet advertising
It’s not good for educating or closing the sale
Ethical advertising?
Television
oLargest amount of advertising revenue
oSight sound and motion – appealing
oViewer demographics
oInternet is now the most preferred medium of advertising
oHundreds of stations to watch TV on – so there are less people watching
oProliferation means you can also target specific audiences who watch specific TV shows
oNew technology allows people to fast-forward past the ads
oPoor medium to education people about complex products
Internet
oLargest medium of advertisement
oAllows consumers to browse products – 24 hours a day
oAbility to access customers anywhere in the world
oPromote products without having to invest in bricks-and-mortar store
oInformation overload for consumers
oImpersonal – concerns about authenticity
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find more resources at oneclass.com
Newspapers
oNumber of ads in newspapers has declined as advertisers have shifted emphasis to the
internet
oNewspapers thrown out after one day – do not have good reproduction quality
Magazines
oPinpoint target customers; many magazines
oProduct reviews and forums – opportunity to provide detailed product information
oLong life and tend to be passed from person to person
Radio
oHigh degree of customer selectivity
oRadio ads are very short – less than 30 seconds
oPeople tend to use radio as background while they are doing other things
oLimited medium
Outdoor Advertising
oBillboards and signs
oGeographically specific
oMultiple times to be viewed by locals
oUseful to consumers who are searching for alternatives
oLimited information presented
Personal Selling
Personal selling: Promotional tool in which a person communicates one-on-one with potential
customers
People want to be able to interact with someone before making a sale
Credibility and trust between seller and consumer
Appropriate promotional method if the product is complex and has many features
Cars, houses, life insurance, and investment products
Consumer products can rely on personal selling if they are simple too i.e. Avon, Mary Kay etc.
Disadvantage: cost; labour intensive, travel, food, and lodging
Effective in education customers about product features
Specific questions can be answered, spark enthusiasm, etc.
Salesperson deals directly (one-on-one) with potential buyers
Appropriate for complex product with many features
Most expensive form of promotion
Educating, enthusiasm, closing the sale (info search, evaluating, purchase decision, raising
awareness)
Sales Promotion
Sales promotion: A variety of short term incentives intended to stimulate immediate interest and
excitement in a product, and to stimulate sales
Addresses: Purchase Decision
Sales promotion offers reasons to buy the product now
find more resources at oneclass.com
find more resources at oneclass.com
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