Global Marketing g Communications Decisions II: Sales Promotion, Personal Selling, and Special Forms of Marketing Communication

Global Marketing (Global Edition) Chapter h 14 1

Introduction
In addition to advertising, PR, and publicity, the promotion mix also includes: Sales promotion Personal selling Direct mail Catalogs g Infomercials, teleshopping Support media (outdoor ad) Sponsorship, events & experiences Product P d t placement l t
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2010ShanghaiWorldExpoPark
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IMC Builds Brand Equity

Sales Promotion
Sales promotion refers to any paid consumer or trade communication program of limited duration that adds tangible value to a product or brand Price vs. non-price promotions Consumer vs. vs trade vs vs. business & sales force promotions

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Sales Promotion
Provide a tangible incentive to buyers Reduce the perceived risk associated with purchasing a product Provide accountability for communications activity Provide method of collecting additional data for database
Home and garden shows attract homeowners
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Sales Promotion: Global or Local?

In countries with low levels of economic developg of promotional p ment, low incomes limit the range tools available y may y also differ from country y to Market maturity country Local perceptions of a particular promotional tool or program can vary Local regulations may rule out use of a particular promotion in certain countries Trade structure in the retailing industry can affect the use of sales promotions 14-6
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Consumer Promotions
Tools Objectives
Entice Consumers to Try a New Product Lure Customers Away from Competitors Products Get Consumers to Load Up p on a Mature Product Hold & Reward Loyal Customers Consumer Relationship Building

Sampling
Sampling

Samples Coupons Cash Refunds Price Packs Premiums

Advertising g Specialties Patronage Patronage e a ds Rewards Rewards Contests S Sweepstakes k Games

Provides consumer with opportunity to try product at no cost May be distributed in stores, in the mail, through print media, at events, or door-to-door

Wine tasting in South Africa

Point-of-Purchase Displays
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Kikkoman soy sauce launched a sampling program in supermarkets in the US; today the US contributes 85% of profit from international operations
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Couponing
Couponing
the bearer to a price reduction or some other special consideration for purchasing a particular product

Social Couponing
Hot online trend Groupon is industry leader

Printed P i d certificates ifi entitle il

Couponing accounts for 70% of consumer promotion spending d in the h US S Free-standing inserts, in-pack, on-pack, cross coupons
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Deals are made with local retailers with Groupon taking a percentage of proceeds Grown from 1 country to 35 mainly through acquisition 40 million users in 300 global markets by 2010 Over 50% of users are in Europe, 33% in U.S. Founders rejected Googles $6 billion takeover offer
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SP: Issues and Problems

Fraud
Pepsi promotion with Apple

Trade Promotions
Tools Objecti es Objectives
Persuade Retailers or Wh l l Wholesalers to t Carry C a Brand B d Give a Brand Shelf Space Promote a Brand in Advertising P h a Brand Push B d to Consumers C Price-Offs Allowances Buy-Back Guarantees Free Goods Contests Premiums Patronage Displays Rewards d Discounts Push Money Specialty p y Advertising Items

Regulations vary by country Cultural dispositions to coupons and other sales promotions
M Malaysians l i see coupon usage as embarrassing b i Islam frowns on gambling, so sweepstakes may not work

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Business & Sales Force Promotions

Variable

Factors Affecting PS & Adv Adv.

Conditions Favoring Personal Selling Geographically concentrated Relatively low numbers Expensive Technically complex C t Custom made d Special handling requirements Transactions frequently involve trade-ins Relatively high Relatively short Conditions Favoring Advertising Geographically dispersed Relatively high numbers Inexpensive Simple to understand St d di d Standardized No special handling requirements Transactions seldom involve trade-ins Relatively low Relatively long
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Objectives
Generate Business Leads Stimulate Purchases Reward Customers

Consumer

Tools
Conventions Trade Shows Sales Contests

Product

M ti t Salespeople Motivate S l l

Price
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Channels

Personal Selling
Person-to-person Person to person communication between a company representative and prospective buyer(s) Focus is to inform and persuade prospect Short Short-term term goal: make a sale Long-term goal: build a relationship
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Personal Selling Hurdles

Political Risks unstable or corrupt governments change the rules for the sales team Regulatory Hurdles governments can set up quotas or tariffs that affect the sales force Currency Fluctuations increase / decrease in local currencies can make certain products unaffordable g of Market Unknowns lack of knowledge market conditions, the accepted way of doing business, or positioning of the product may d il the derail h sales l teams efforts ff
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Sales Force Structures

Prod ct Product

Sales Force Compensation

Fixed + Variable + Expenses + Benefits Straight salary secure income - willing to do non-sales work Straight commission high performers, performers motivating, control costs but emphasis is on sales not relationships sales,

G Geographic hi

Customer

Complex

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Combination plan is best

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Strategic/Consultative Selling Model

Evolved in response to: Increased competition More complex products More emphasis on customer needs Long-term relationships

Strategic/Consultative Selling Model

Personal Selling Philosophy commitment to the marketing concept and a willingness to adopt the role of problem solver/partner Relationship Strategy game plan for establishing and maintaining high-quality relationships with prospects/customers Product Strategy plan that can assist the sales representative in selecting and positioning products to satisfy customer needs

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Strategic/Consultative Selling Model

Customer Strategy plan that ensures that the sales professional will be maximally y responsive p to customer needs Presentation Strategy consists of setting objectives for each sales call and establishing a presentation plan to meet those objectives j
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Strategic/Consultative Selling Model

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The Presentation Plan

Approach pp Presentation D Demonstration t ti Negotiation g Close S i i the Servicing h sale l
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Sales Force Nationality

Expatriates Host-country Host country nationals Third-country nationals Other options

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Expatriates
Advantages
S Superior i product d t knowledge Demonstrated commitment to service standards Train for promotion Greater HQ control

Host Country Nationals

Advantages
Economical Superior market k knowledge l d Language skills Superior cultural l l knowledge Fast F ti implementation l t ti

Disadvantages
Hi Higher h cost t Higher turnover Cost C tf for l language and d cross-cultural training

Disadvantages
Needs product training May M be b held h ld in i low l esteem Language skills may not be important Difficult to ensure loyalty
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Third Country Nationals

Advantages
Cultural sensitivity Language skills Economical Allows regional sales coverage

Other Options
Sales agents Exclusive license arrangements Contract manufacturing or production Management only agreements Management-only Joint ventures

Disadvantages
May face identification problems May be blocked for ti promotions Income gaps Needs N d product d t and/or d/ company training Loyalty not assured

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Special Forms of Marketing Communications

Direct Marketing
Direct mail Catalogs g Infomercials, teleshopping

Direct Marketing
Any communication with a consumer or business recipient that is designed to generate a response in the form of:
An order Request for further info A visit to a store or other place of business

Event Sponsorship
Concerts, sporting events Product P d t placement l ti in movies i

Internet Communication
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Direct Marketing: Going Global

Growth of direct marketing: Market demassification Effort of traditional shopping Continuous access Next-day delivery Specialty items Increase I i in computer t power Public issues: Irritation Unfairness Deception/fraud Invasion of privacy
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Benefits of Direct Marketing

For Customers
Fun Convenient & Hassle Fun, HassleFree Saves Time Larger Merchandise Selection Comparison Shopping Order Products for Themselves Th l or Oth Others

For Companies
M ili Lists Mailing Li t for f Almost Al t Any A Market Customized Cus o ed Offers O es Ongoing Relationships with Customers Timed for Higher Readership & Response Alternative Media/Message Testing Privacy Measurable Response

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Direct vs. vs Mass Marketing

Direct vs. vs Mass Marketing

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One-to-One One to One Marketing

Building from Customer Relationship M Management t

Catalogs
Catalog:magazinestyle publicationthatfeatures photographs,illustrations,and extensiveinformationabouta companys company sproducts U.S.1/3ofworldmarket,17billion mailedin2008 EU:Eliminationofbarriershasled toaboom HongKongand dSingaporehave h efficientpostalsystemsandhighly educatedconsumerswithcredit cards
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Identify customers and accumulate detailed information about them Differentiate customers and rank them in terms of e value a ue to o the e co company pa y their Interact with customers and develop more cost efficient and effective forms of interaction Customize the product/service offered to the customer
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Infomercials and Teleshopping

An infomercial is a form of p paid TV in which a particular product is demonstrated, explained, and offered for sale to viewers who call a toll-free number on the screen Teleshopping on channels like HSN and QVC is exclusively devoted to demonstration and selling
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Interactive Television
ITV allows viewers to interact with the programming content they are viewing In the UK, more than half of pay-TV subscribers use ITV Remote controls have buttons to push to order o de products p od t shown ho n on screen een
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Challenges of Online Marketers

Limited consumer exposure p & buying y g Skewed user demographics & psychographics Chaos & clutter Security Ethical concerns Consumer backlash
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Support pp Media Outdoor Ads

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Expenditures for Outdoor Advertising (% of Total)

Sponsorships
A company pays a fee to be associated with an event, team, athletic association, or sports facility Combines elements of p public relations and sales promotion Draws media attention

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Sponsorship Events & Experiences

To identify with a particular target market or life style To T increase i brand b d awareness To create or reinforce consumer perceptions of key brand image associations To enhance corporate image p and evoke feelings g To create experiences To express commitment to community To entertain key clients or reward employees To T permit it merchandising h di i or promotional ti l opportunities t iti Effectiveness varies across countries Expenditures are rising
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Product Placement
Arranging to have the company companys s products and brand names appear in TV shows, h movies, i and d other th types t of f entertainment Marketers also lend or donate products to celebrities and other public figures
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Why sponsor events?

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