[Lecturer] Hi, everyone.
Welcome to the video lecture on Promotion.
Here's an overview.
So, we'll start with a framework
of how to think about
the three kinds of promotion that you may do,
paid, owned, and earned,
then the three aims
that each start with the letter A,
walk through a few types,
and then go through SMART objectives,
with an objective being
what you hope to achieve
with your promotional activities.
Here is the definition
our esteemed textbook author, Frederick Crane,
gives for promotion.
So, it's ways that you communicate with your customers.
It's a very general, but descriptive, way to describe it.
So, one framework I want to bring to your attention,
is to think about promotion
in terms of paid, owned, and earned.
So paid means
things where you are paying to get your message out there.
This is often a variable cost.
So, if you are buying an ad in Seven Daysies,
you know, pushing your message on Facebook, or social media,
a radio advertisement, a billboard,
you're paying money, and that's clearly paid.
Owned, are things that you keep and maintain yourself,
maybe a sandwich sign, maybe your website.
These tend to be more fixed cost.
And then finally,
maybe the more elusive,
but most valuable,
is earned.
It's your good name and reputation.
And, I think, brand plays very closely into this, too.
It's maybe an award that you win,
or just your brand being foremost
in the minds of your customers,
that you are the very best at what you do,
you are the go-to.
Those are all things that you earn,
that you can't buy,
and own or buy,
and have someone say about you,
but you absolutely,
you know, you earn them through doing good work,
and being true to yourself,
and really creating value for customers.
So this is just another slide
which has a bunch of examples
in each of these paid, owned, earned framework.
Promotion has a three-step process, or three goals,
that, sort of, build on each other.
First, you want to create brand awareness.
You want people to know you exist.
Hey, this is what this problem, you know,
these folks are available,
this is what they sell.
When I have this problem or need,
that this is where I can go.
Next, is to build favorable attitudes.
So they think, "Hmm, I like this. This works."
That this can solve a problem.
This is, I'm interested in,
I have a favorable view.
And then last is the action.
Usually sales.
They come to you, they seek out,
they find your product, they buy it,
and hopefully, they keep doing it over and over again.
'Cause, as we've said,
keeping old customers,
you know,
is extremely important.
And having regulars,
that for whom you are the go-to,
and they come to you time and time again,
that's one of the really important goals
of any marketing effort.
Another way of thinking of this is a funnel.
And anybody who's had me in class
know that I love the metaphor of the funnel.
So first, at the top,
that there will be folks that,
there's more folks,
who will be aware.
And then once they're aware,
a smaller number are then, you know, considering you,
so they know a large amount will know you,
a smaller number will like you,
and then, the third is to trust you,
and to say,
yes, I'm going to spend my money, or time, or effort,
or whatever,
on this business, on this product, on this organization.
And then, that yields sort of leads or customers.
So again, at the bottom
are, sort of, your core consumers
that you really hone in on,
that really are the backbone of your revenue stream.
So I'll walk through a number of examples
of the four types of promotion that you might do.
Now they're not mutually exclusive,
but, I think, they're four, sort of, main dimensions,
or types,
that are worth spending some time on.
First, is public relations.
So, this is, basically,
you do it to create a positive image of yourself,
to sort of paint a halo over your head.
I am a good person,
this is a good business,
this is worthwhile,
really good for brand awareness.
And also, for creating publicity,
and just a sense of goodwill.
And this can be things like donations or sponsorships.
So, we learned about the example of Cookies for Good,
a partnership between Cabot Creamery and Sugarsnap,
where they are, they formed a partnership,
and for every cookie they sell,
a portion of it goes to COTS,
which is the organization that helps homeless folks.
Another clear example,
is sponsoring a Little League team.
It gets your name out there,
all the parents and fans,
and everyone else,
sees, oh, this business is a sponsor.
Both, now I've heard of them,
and oh, they're supporting a cool thing.
And so, you know,
I'm aware of them,
and maybe, I like them,
and eventually, hopefully, I will trust them.
Advertising is probably the most familiar.
And many times when people think marketing,
this might be the first thing that they think, too.
And this is, basically,
paying some media organization
to communicate information about your product or service.
It has some
upsides.
It can reach a lot of people.
It can grab attention.
In most cases, it does cost money.
You're paying them to do this.
And, I think, that we're seeing more and more,
that the internet is really good at
honing in on tight target markets
that are really, likely, consumers,
and you can really hone advertising, you know,
to reach those who are your, you know, core targets.
But a lot of advertising
is thinking about who is my target market,
and what's the best media to reach them.
Where are they?
How am I going to best get their attention?
Sales promotion is offering some kind of a deal.
It's buy my stuff.
It's try this.
It's a way to get it into their hands.
Folks who maybe aren't already buying it.
In some cases,
it's related to the hurdle model of price discrimination.
If they have to send in a coupon,
or get a rebate,
or buy one, get one free,
that they do have to go over a hurdle, in some cases,
but it's sort of offering a really good deal.
Try this.
Buy two, get one free.
Really, trying to get it into the hands
of those who aren't already consuming it,
have them try it, and like it, and say, "Yes".
This is a great thing.
It can be overused, though,
so that there is a danger.
If the only time
when folks buy your thing
is when it's on sale,
then they're gonna wait,
and they're gonna wait until it's on sale,
and they might undervalue it.
As we learned,
sometimes price is a signal of quality,
and if you are always positioning yourself
as the buy it cheap,
then they might undervalue it,
think that you're not a high quality product.
And finally,
usually especially with sales,
like a 50% off sale,
it is you who pays the difference.
So, if your product is on a store shelf,
they run a sale,
yes, they wanna sell it,
they want to get your name out there,
but it's not like the store is taking a hit.
You take that hit
for most examples that I know of.
The store is getting the same margin,
or the same proportion,
as they would if it were full price,
and the sale price,
it's you that makes it up.
Next, I'm gonna talk a little bit about social media,
which is obviously a really dominant player
in our
marketing space right now.
Social media can play a very large role
in the promotion of your business organization.
It can do a lot of things.
It can create a buzz,
a viral campaign.
It enables fans to promote,
so it gives fans and customers a vote, and a voice,
in the ability to do promotion for you.
You can facilitate online conversations,
it can build trust and loyalty,
and it also establishes your expertise.
Remember that social media
should be as much a stethoscope as a megaphone.
It's as much listening to what others are saying
than screaming out your message.
And this is really important for trust building.
And as well, it's not about control.
That if you're listening,
and letting others speak,
and initiating a conversation about your product,
or even about the space
in which your product is operating,
it allows others to contribute,
and it really builds trust in you,
that you are a credible voice.
And thinking back to how important trust is
in the funnel that I showed you a little while ago,
this can really be an important part of that.
There are many, many, many social media
and online resources,
that we use now.
Here's a few.
I'm sure that I miss some,
but you can tell me more about it
when we discuss it in class.
All of these fit into an integrated promotion plan.
So these are sort of the tools,
what we were just talking about,
tools that you can use
at your disposal
to incorporate into a plan,
to work through the funnel,
and to achieve your goals.
And so, I'm gonna talk a bit about each one.
The first step,
and we've done a lot of work in this already,
is, who's your target?
Who are you?
To whom are you directing the promotion?
Who are you targeting?
Is it first customers?
Is it opinion leaders?
Is it one of your key segments?
Who's the audience?
Who are you trying to reach here?
Next, you want to make an objective.
So, knowing where you want to end up, is really important.
An objective is very,
a clear statement of,
this is where we want to be,
this is what we want to achieve.
And it might be any of these three A's,
or maybe more than one,
or all three,
but something about awareness, attitudes and action.
And we're gonna talk, in the next slide,
about SMART objectives.
And SMART is an acronym,
specific, measurable, achievable, realistic.
I also like the term relevant, and time bound,
and I'll walk through each one.
So again, SMART objectives are these things,
it's specific,
it tells exactly what you want to achieve.
It's immeasurable.
There's like a numerical,
or a very clear way,
to measure,
"Did I meet this or not?"
It's a specific measurable achievement
that you want to measure.
Is it achievable?
Is it something that you can do
with the resources that you have?
Can you reasonably attain this?
And often, the other A is attainable.
R, it says here, realistic,
again, can you do it?
I also like the R for relevant,
which is,
will it help you achieve the broader,
the broader objective,
and the broader mission of your organization?
And finally, time-bound,
and when do you want this to be done?
So, here's an example
of a not SMART objective,
and a SMART objective.
So, if I really wanna boost enrollment,
I might have wanted,
I want students to enroll in my class.
But, if I would say 50% of C-D-A sophomores
will apply for enrollment in C-D-A-E 168
in a specific semester,
that would be SMART,
because it's specific.
What I want them to do, enroll,
or apply for enrollment.
It's measurable, 50% of all sophomores.
It is achievable,
'cause, you know, hopefully people will do it.
It's realistic, or relevant,
because I want people to enroll
'cause I want to teach,
because I love to teach,
and that's my job.
And it's time-bound,
that when this semester starts,
that's when we look and see
if I've achieved my goal.
And we'll do some practice in class
of writing SMART objectives,
and be assured,
you're gonna see SMART objectives again.
Next, is a budget.
How much do you wanna spend?
And basically, there's four main options.
Again, these may not be mutually exclusive,
but it's four sort of things you can think about first.
Sometimes it's simply a percent of sales.
For every dollar I get in sales,
I'm gonna spend 5 cents, or 10 cents, on promotion.
It's a fairly straightforward in the number,
but it may not pay for itself.
Next, is competitive parody.
And we see this, like, Coke and Pepsi,
that if you see a big boost by Coke,
you can almost be assured,
Pepsi is gonna respond.
So, doing what your competitors are doing.
Third, is all you can afford.
So, once the bills are paid,
and, you know, you made payroll,
you've paid your vendors,
you paid your taxes,
hopefully, you've paid yourself,
you can think, well what's left?
And let's put that toward marketing.
But maybe the best way,
is to think about the objective and the task.
So come up with a really good, one or more,
SMART objectives.
And then, what does it take to accomplish this?
How much money will it take
to actually achieve this smart goal?
And do it like that.
The next consideration is
what is the theme, and the message, of your promotion.
So, the theme should be closely tied to your position.
So each
bit of promotion that you should do,
should be boosting that position,
to be tied very closely,
clearly articulating,
this is where we are in the marketplace,
and I'm going to tell you about it.
So if you're interested
in a product or service
that is in this position,
we are the ones for you.
And finally,
the message is,
you know it's really going to differ by target,
and what kind of media that you use.
Three, very common appeals,
and you'll see these a lot in advertising,
is sex, fear, and humor.
And we'll think about examples of each of those
when we discuss it in class.
And I invite you to watch this and see
which, if any, of those three that you see here,
fear, sex, and humor,
are any of them in play here?
So copy and paste this,
and watch the video.
Next, you wanna circle back,
and see did I meet the objective?
So,
you think about, you know,
since it's measurable and time-bound,
you go to that time and you see, did we make it?
Here's a whole bunch of ways
that you can think about
whether we met our objective or not.
The actual measure can be rather tricky.
So we wanna think about our R-O-I,
or returns on investment.
So marketing expenditure is an investment,
and we, if possible,
wanna think about a cost benefit ratio
for some measurable benefit.
So thinking back, you know,
for sales, or for new customers,
or for folks who've stopped by our store,
or whatever the objective is,
what was the cost per, sort of, successful event?
And calculating that ratio can be helpful.
And again, we can think of terms of know, like, and trust.
What does it cost to achieve each of these steps
down the funnel?
So here are some clear metrics of success,
sales revenue, new orders, new customers,
some kind of action taken,
entering the store,
clicking on an ad,
liking your Facebook page,
joining an email,
purchasing,
download a coupon.
So those are all, like,
clearly measurable outcomes
with clear numbers
that you can measure.
But you also may wanna measure brand awareness,
which is a little bit more nebulous.
So here's some tools that you can use
to measure brand awareness.
You can do an online survey or interview,
and ask about did they see an ad?
When you say,
name a business or an organization that does this,
do you come to mind?
You can try to measure favorability.
Do they, sort of,
remember your tagline,
or know your logo,
and you can ask 'em whether or not they intend to purchase.
So here are ideas that you can use.
So, you can use different promotion codes.
So I know, like, sometimes,
I like to listen to sports talk radio,
and they may doing an ad for,
and I'm just think thinking out loud here,
1-800-FLOWERS,
which is an online, like,
send flowers to your wife, your mother, you know, etc,
or whomever,
and it's like me, you know, mention the, you know,
put the words Mike and Mike for the ESPN radio show.
It has a promo code,
and you'll get, you know,
some percentage off.
So, that lets them know
that whoever enter that code,
heard about this on the Mike and Mike radio show.
In the same way, you can offer different U-R-Ls.
You can use the hurdle model of
mention this ad, and you'll get a thing off,
and then, you know,
that they saw that ad.
Or different coupons.
So you might send one style to one geographic area,
and another to another.
Put one in one newspaper, one in another.
When they redeem them,
then you know who, where they came from,
and what newspaper, or what medium, they used.
It's a really important,
especially, you know,
if you have a storefront,
especially if you're new,
or, you know, people coming to you,
how did you learn about us?
It's really important.
It's a really simple question,
but it can be really important.
And we'll think about other ideas as we go.
So again, here are SMART objectives.
Make sure your objectives are SMART,
and we will do an exercise in class
where you come up with one or more,
'cause I want you to be able to.