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Promotion Management

by: Dixie Olson

Promotion Management Mktg 477

Dixie Olson
GPA 3.7

Darrel Muehling

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About this Document

Darrel Muehling
Class Notes
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This 11 page Class Notes was uploaded by Dixie Olson on Thursday September 17, 2015. The Class Notes belongs to Mktg 477 at Washington State University taught by Darrel Muehling in Fall. Since its upload, it has received 35 views. For similar materials see /class/205950/mktg-477-washington-state-university in Marketing at Washington State University.


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Date Created: 09/17/15
MKTG 477 EXAM 2 NOTES 09292011 Promotional Plan Outline 1 Executive Summary 2 3 4 E a An abstract of the entire plan Situational Analysis a Company Product History i Product Evaluation i Consumer Evaluation i Who goes to the store The Target Market Other ForcesTrends eg Regulatory i See date These are all the things you need to know about a company before you create an Ad Includes a report of past history advertising campaigns amp past budgets 5 Research w consumer for possible new spin 3 amp Marketing Goals a Report with the other 4p Price Place and Product b Company s goal Budget a Detailed explanation of proposed promotion expenditures i EX Media Creative Production Research etc Creative a Advertising Objective 0 b Creative Strategy amp Execution i What do you hope to accomplish What s your objective The actual basic idea of what you ve envisioned to this point Media Recommendation a Media Objectives research and frequency b Media Strategies Plans how media objectives will be met These both explain the quotWherequot amp quotWhjf Other Promo Mix Recommendations a Sales Promotion b Public Relation c Direct Personal Selling 339 Evaluation a Propose how the plan s goals and objectives that can be measured and assessed for effectiveness 9 Summary and Conclusion a Final synopsis of entire plan b Addresses why choose usyour opportunity to quotpitchquot yourself 10042011 Why Set a Promotional Objective 0 Requires management at carious levels of the organization to agree upon a Course of Action 0 Objectives guide a number of other aspects of the promotional plan 0 Budget 0 Creative 0 Media 0 Provide standard for how results could me measured 0 Objectives tell us where we are where we re going and how we know whether or not we got there llf you don t set a promotional objective any creative execution would appear to be 0 potentially effectivequot The Process of Setting quot 39 39 quot39 39 39 39 nhiertiue rape was look at what s Point you want to on quot creative Create Assess as met its A Good Promotional Obiective Should Include the Following 0 Benchmarks 0 Starting point Current status quantified MUST be a number for example a scale of 110 0 o Goa 0 End point quantified and coinciding with benchmark 0 Will still deal w the same item from the benchmark 0 Target Market who are you hoping to influence w your promotion 0 Can have more than 1 For example WSU target students alumni and future students 0 Time Frame 0 When do you hope to achieve your goal Be specific 0 6mo is a reasonable time frame 0 Include a specific date of completion 0 Measurement Technigue o Tells reader of promotional plan specifically how to measure benchmark or goal 0 Supply a close ended precise question and answer EX quotWhat is your attitude towards Pepsiquot Bad Excellent 1 2 3 4 5 No Class 10062011 10112011 See quotSample Promotional Objectivequot Handout for a speci cperfect objective statement Example Automaker National Campaign After the ad campaign wrapped up research was conduced and resulted in a huge positive impact on awarenessimage of the brand However the car dealerships said the campaign did not spark sales and that the overall numbers were lower than competitors Was the Ad Campaign Successfu Depends on the objective If sales was the goal then no If communication was then yes Communications Agencies They are imageawareness focused and are not responsible for the product Sales Advertisers Profit focused When Are Sales an OK Obiective 1 When a direct marketingadvertisement effort is used a EX 1800 ads b If there is only one way to purchase product like through the number sales is a good measure because there won t be another product to compare to 2 Local quotSalequot Advertisement a 30 bomb of Busch on sale b The sales number before vs during the sale or vs last year 3 lf When other marketing mix variables are stable within market place Mature Market a Peanut butter has remained relatively the same over the years lfjiffy developed a new campaign and sales go up then the ad was successful ha nae A theoremcar moder or consumer adver sr ng process r s eve process Ex quotStavAlert Gum a caffeinated gum doesn39t have high awareness a E u r d g RQ gt Use g 2 53 Trio G g Prefarenaa g 39s g g Liking AHirLda lt 8 Knovwedge Beeierf 3 Brand NamerAwareness Have onefocus at a time ltemsto measure on handout sheet quot quotAwareness to quotr39ts row fatquot Know edge EX Weidman Beer 4 H L 5moothquot n H n hrrrrn n rrefused to change M r r39n n r A w quotRegr39steredquotr rrrru anurnber 39 39 m r r r h and MORAL Ves sa es Increase butr39t doesn39t a ways happen for the Intended reason EX Luckv Beer Puzzles under the Cap why dr39d they do W57 Serr Puzzres notbeer7 10132011 Promotional Budget 0 Where does go 0 Creative Media Research 0 How do you Set a Budget What techniques are there 0 of Sales Expense I AdvertisingSSS fsales I On average 35 with this technique 0 Arbitrary Allocation Expense I No system 0 All You Can AffordMAffordability Expense I SalesExpenses Advertising SSS I EX Radio ad promoting against this technique Competitive Parity Expense if done just to match competitors Investment if done 0 strategically I Match competitor s action of sales amount I 2quotd best way I EX Wendy s matching McD s prediction Droprise in from last year 0 Ob39ective amp Task Investment 0 Set a promotional objective and determine what task what s involved plus the estimated cost and ten set the budget accordingly 0 Downside it s difficult to calculate which is why most companies don t use this although it is one of the best ways 10182011 How Do You Set a Budget Is used on promotion an investment or an expense Expense Cost of doing business There is no future goal Investment Attempt to achieve objectivegoal See quotThings to Consider When Setting a Promotional Advertising Budgetquot Handout for notes on application Considerations when settin a Promotional Bud et HANDOUT EXTRA 5 The ad to sales relationship is ever changingso what makes it change If Oon mpo fa 305 out 01 Business Why is there CarryOver 1 Delayed Response a See the Ad React later EX 21 Beer Mikes Student ran out Igt No They waited till after class 2 HoldOver a Information retailed in memory They don t have to see the ad to know the deal EX 50 beer at the ZZU on Tuesday If Cm lpo lor Bodies Advertising gt 10202011 What regulatory body is probably most influential in scrutinizing advertising practices The Federal Trade Commission FTC 0 Most complaints to the PFC come from competitors 0 FTC Act 1914 o Focus s on competitive injury on a national level 0 WheelerLea Amendment 1938 0 Amended FTC act added llconsumer injury and llintent to defraud and that it didn t have to be proven guiltynot guilty to rule that deception occurred 0 The FI39C specifically protects 0 Consumers re fairness amp deception I Fairness people who are vulnerable and easily mislead like kids old people economically disadvantaged Mentally disadvantaged not included I AKA the Consumer Protection Division o Businesses re competitive practices I Antitrust Competitive Division Question Are diet pills ads deceptive No no one should actually believe the claim THREE CRITERIA TO TELL IF AD IS DECEPTIVE AND FTC SHOULD INTERVENE 1 Misleadingness a Are thing that people believe after seeing the ad different from reality b Misrepresentations Statement contrary to fact c Omission Qualifying information is not disclosed EX Heat resistant car wax demonstration time spend lit not specified Dog food containing quotMilk proteinquot digs don t need it Child Surgeon 2 Reasonable Consumer a Ignorant Man If anyone could be deceived then the ad is deceptive EX Permanent hair color people thought you d only have to dye your hair once everthey were deceived Could mean even 1 person Typically it s judged by who s impacted not percentage b Are the individuals that are holding afore mentioned belief acting quotreasonablyquot c A quotnormalquot expected reaction by people from a target market cl A quotnotablequot percentage of people 3 Materiality a Do deceptive claims influence buyer behavior to consumer s determent b Is one of the reasons consumers consider buying the product due to their exposure to and beliefs about the quotdeceptivequot claims made in ad EX Disposable Razor ad Claimed it was durable had a pretty variety of colors and it float if dropped into the water If after normal use the blade is still sharp you like the color still but it doesn t float Would this have been deceptive Depends on ifthe Consumer Cares or not 10252011 Applying theThree Criteria Stouffer s Case Background This huge debate was over the deceptiveness of the fine print on the ad The product claimed it was on sodium containing less than 1gram of sodium per entre dinner The part lead to fine print that read 1gram 1000mg which sodium is usually measured in Basically the product wasn t as low sodium as it sounded and there was a debate whether or not consumers were influenced by the fine print Stouffer s was Found guilty All 3 criteria misleadingness reasonable consumer and materiality must be present to be established as deceptive FTC Orders And Remedies Orders 0 Consent Order I Signed by both the FTC and the defendant rebock They consent to with whatever the FTC says without question I When consent order accepted defendant is found llnot guilty and does not require an omission from the defendant No further punishment is made beside the initial one EX Rebock had to pay 25million and exclude the deceptive material in their East Tone ads I Most will sign 0 Ceaseanddesist Order I If a consent order is not signed by the defendant the FTC will tell them to stop the debated advertisement immediately or face more penalties Then there will be a hearing EX Stouffer s rejected signing the consent order and took the case to a court ran by an Administrative Law Judge hired by the FTC not an actual Court of Law Companies can have a lot of capital invested in a product and it s campaign so changing the product can easily hurt them and send their consumers to competitors who don t lieactually have what they wanted This route has a steeper punishment Remedies PREVENTION 0 Trade Regulation Rule TRR I Requires all companies within an industry to abide by certain regulations for advertising I Even if you haven t done anything wrong just don t In place to PREVENT you from breaking them EX Telemarketers and Funeral Homes 0 Ad Substantiation I If claim is made it must have proof it s true m the ad appears EX Lysol paper was signed saying dirt and grime used in the making of the commercial what actually a substance that people would typically clean up with their product I Companies hold onto the information in case of FTC questioning 0 Code of Conduct I General recommendations I These are routinely broken EX llDon t make competitors look bad in a comparative ad o RESTIUTION definition if product is deceptivesomething bad happens to the consumer the good amount spent is returned These are dictated in the Order to a company from the FTC o Affirmative Disclosure I Requires company to ad a clarification statement to it s claim EX American Spirit s quotadditive free alternativequot claim sounds like it s a healthier cigarette They had to ad Not a safer cigarettequot to its carton as well as the surgeon general warning This counts as restitution because the consumer returns back to their original beliefs before the ad was released EX Medication ads The ones that made no claim in their advertisement vs the ones that make claims like quotOnly effectivequot and having to include the proof 0 Corrective Advertising Clarifies the claim just like an affirmative disclosure but it has to make reference to the previous misleading ad EX Medication that used quotonly effectivequot in their first ad has to release another ad with a paragraph apologizing for misleading them This recently happened with Yaz and had a female narrator correcting the advertisement In the book A quotfewer caloriesslice breadquot had thinner slices not less calories This isn t considered a punishment from the FTC s standpoint but causes negative press for the company THE FOLLOWING ARE MORE RESTIUTIONS but not as important as the last two 0 RESTIUTIONS cont 0 Cooling off Period I Applies to doortodoortemporary establishments and grants the consumer a 72hr grace period to return product and 100 void the contact I Automotive sales and normal stores are exempt o Refunds I Giving cash back to consumer Rebock did this o PUNISMENTS o Fines I Sometimes can be millions of dollars for a single violation and often puts companies out of business This happens when the rules are violated or the FTC is ignored 0 m I EX A man in Utah quotfound guilty in contemptquot of the FTC and received Zyears in federal prison for punishment I Who goes to jail Anyone that was aware it was going on 0 Negative Publicity I Not a formal punishment by the FTC but a PR nightmare none the less 102711 quotRegulatoryquot Bodies 39 Advertising Government national state local SelfRegulatory agencies and groups 0 Companies that get together to help their own industries ie better buying bureau Media Consumers 0 Don t seek and destroy but Regulatory influence exists Federal Government 0 FTC Trade 0 FCC Communication 0 FDA Food amp Drug 0 Postal Service 0 Bureau of Alcohol Tobacco and Fire Arms State Government 0 State Attorney General I Many states pattern their laws and regulations on the FTC o EX State of WA known for getting rid of Joe Camel in Camel Cigarette ads Local Government 0 City Ordinances o EX quotGreen River Ordinancequot that doortodoor sales men need a permit to do so Self Regulatory Bodies 0 National Advertising Review Council NARC I National Advertising Division NAD I Investigative body requests substantiation I EX Huntz ketchup complains to NAD They go to Heinz and look for proof then determines I Continue they find nothing wrong I Discontinue Stop using the ad I Modification Request to adremove certain aspects of the ad SO f NAD s decision is challenged I National Appeal Review Board NARB I Look at NAD s findings and decides if the decision stands I Made up of a 5 member panel 0 2 represent companies 0 2 represent advertising agencies 0 1 represents consumers I Their judgment typically is final word STILL UNRESOLVED Then the FTC steps in 0 Which route is more preference Just stick to your own business If you re an NARC member go that way 0 Media Regulatory 0 Only one to review ads before they re exposedair on TV 0 m restrictive o If ad is taken to certain media they look at it and decide if it is okay for their target market EX National Association of Broadcasters Magazines TV Networks and Local stations EX2 NBC banned adsPETACatholic Pro Life Ad Rebock pump shoe 0 Consumer o Advocacy Groups I Ralph Nader Nader s Raiders I Consumer Action 0 Individual Consumer I If you got beef w localregionalnational ad you can make a difference I Snowballs when media starts to take notice


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