Chapter 16

Very few goods and services can survive in the marketplace without good promotion. Marketers, such as those touting Levi’s Dockers, promote their products to build consumer demand. Promotion is an attempt by marketers to inform, persuade, or remind consumers and industrial users to engage in the exchange process.

Once the product has been created, promotion is often used to convince target customers that it has a differential advantage over the competition. A differential advantage is a set of unique features that that target market perceives as important and better than the competition’s features. Such features may include high quality, fast delivery, low prices, good service, and the like. Lexus, for example, is seen as having a quality differential advantage over other luxury cars. Therefore, promotion for Lexus stresses the quality of the vehicle.

This chapter presents the goals of promotion, the last element of the marketing mix. You will also learn about advertising and how personal selling and public relations fit into the promotional mix.

Most firms use some form of promotion. The meaning of the Latin root word is “to move forward.” Hence, actions that move a company toward its goals are promotional in nature. Because company goals vary widely, so do promotional strategies. The goal is to stimulate action. In a profit-oriented firm, the desired action is for the customer to buy the promoted item. Mrs. Smith’s, for instance, wants people to buy more frozen pies. Not-for-profit organizations seek a variety of actions with their promotions. They tell us not to liter, to buckle-up, join the army, and attend the ballet.

Promotional goals include creating awareness, getting people to try products, and identifying potential customers. Any promotional campaign may seek to achieve one or more of these goals.

people don’t know they exist or what they do. Small restaurants often have this problem. Simply putting up a sign and opening the door is rarely enough. Promotion through ads on local radio or television, coupons in local papers, fliers, and so forth can create awareness of a new business or product.

used to get people to try a new product or to get nonusers to try an existing product. Sometimes free samples are given away. Lever, for instance, mailed over 2 million free samples of its Lever 2000 soap to target households. Coupons and trial-size containers of products are also common tactics used to tempt people to try a product. Pepsi spent $100 million trying to get consumers to try Pepsi One when it was introduced.

3. Providing information. Informative promotion is more common in the early stages of the product life cycle. An informative promotion may explain what ingredients (like fiber) will do for your health, tell you why the product is better (high-definition television versus regular television), inform you of a new low price, or explain where the item may be bought.

People typically will not buy a product or support a not-for-profit organization until they know what it will do and how it may benefit them. Thus, an informative ad may change a need into a want or stimulate interest in a product. Consumer watchdogs and social critics applaud the informative function of promotion because it helps consumers make more intelligent purchase decisions. Star-Kist, for instance lets customers know that its tuna is caught in dolphin-safe nets.

from switching brands. Slogans such as Campbell’s “Soups are mmmm good” and American Airlines’ “Something special in the air” remind consumers about the brand. Marketers also remind users that the brand is better than their competition. Dodge Ram trucks claim that they have superior safety features. For years, Pepsi has claimed it has the taste that consumers prefer. Continental Airlines brags of its improvement in on-time ratings. Such advertising reminds customers about the quality of the product.

Firms can also help keep customers loyal by telling them when a product or service has improved. Blockbuster guarantees that the hit movie you want to rent is in stock or it’s free.

used to get people to use more of a product and to use it more often. When smoking was banned on domestic flights, Wrigley’s began promoting its chewing gum as a good alternative to smoking. The most popular promotion to increase the use of a product may be frequent flyer programs. American Airlines, the pioneer, has enrolled over five million frequent flyers. Hotel chains like Marriott and Hyatt now have frequent user programs.

way to do this is to list a Web site. For instance, the Wall Street Journal and Business Week include Web addresses for more information on computer systems, corporate jets, color copiers, and other types of business equipment, to help target those who are truly interested. Charles Schwab ads trumpet “Learn more about investing online; go to www.schwab.com.” A full-page ad in the Wall Street Journal for Compaq notebook computers invites potential customers to visit www.compaq.com/whoa, or call 1-800-AT-COMPAQ.

The combination of advertising, personal selling, sales promotion, and public relations used to promote a product is called the promotional mix. Each firm creates a unique mix for each product. But the goal is always to deliver the firm’s message efficiently and effectively to the target audience. These are the elements of the promotional mix:

Most Americans are bombarded daily with advertisements to buy things. Advertising is any paid form of nonpersonal presentation by an independent sponsor. It may appear on television or radio; in newspapers, magazines, books, direct mail; or on billboards or transit cards.

The money that big corporations spend on advertising is mind-boggling. Total advertising expenses in this country are estimated at more than $190 billion a year.

…In this section, you will learn about the different types of advertising, the strengths and weaknesses of advertising media, the functions of an advertising agency, and how advertising is regulated.

The form of advertising that most people know is product advertising, which features a specific good or service. It can take many different forms.

One special form is comparative advertising, in which the company’s product is compared with competing, named products. Coca-Cola and Pepsi often use comparative advertising. MCI claims that the only major difference between it and AT&T is that AT&T is more expensive.

Another special form is reminder advertising, which is used to keep the product name in the public’s mind. It is most often used during the maturity stage of the product’s life cycle. Reminder advertising assumes that the target market has already been persuaded of the product’s merits and just needs to memory boost. Miller beer, V-8 vegetable juice, and the FTD florist association use reminder promotion.

In addition to product advertising, many companies use institutional advertising. This type of advertising creates a positive picture of a company and its ideals, services, and roles in the community. Instead of trying to sell specific products, it builds a desired image and goodwill for the company. Some institutional advertising supports product advertising that targets consumers. Other institutional advertising is aimed at stockholders or the public.

Advocacy advertising takes a stand at on social or an economic issue. It is sometimes called grassroots lobbying. Energy companies often use this type of advertising to influence public opinion about regulation of their industry.

The channels through which advertising is carried to prospective customers are the advertising media. Both product and institutional ads appear in all the major advertising media: newspapers, magazines, radio, television, outdoor advertising, direct mail, and the Internet. Exhibit 16-1, page 476, summarizes the advantages and disadvantages of these media. Each company must decide which media are best for its products. Two of the main factors in making that choice are the cost of the medium and the audience reached by it.

The Internet is the hot new medium for the new millennium. Some are concerned that the Web will soon be full of clutter, like network television, as explained in the Applying Technology box, page 477.

Cost per contact is the cost of reaching one member of the target market. Naturally, as the size of the audience increases, so does the total cost. Cost per contact enables an advertiser to compare media vehicles, such as television verses radio, or magazine verses newspaper, or, more specifically, Newsweek verses Time. An advertiser debating whether to spend local advertising dollars for TV spots or radio spots could consider the cost per contact of each. the advertiser might then pick the vehicle with the lowest cost per contact to maximize advertising punch for the money spent.

Reach is the number of different target customers who are exposed to a commercial at least once during a specific period, usually four weeks. Media plans or product introductions and attempts at increasing brand awareness usually emphasize reach. For example, an advertiser might try to reach 70 percent of the target audience during the first three months of the campaign. Because the typical ad is short-lived and often only a small portion of an ad may be perceived at one time, advertisers repeat their ads so consumers will remember the message.

Frequency is the number of times an individual is exposed to a message. Average frequency is used by advertisers to measure the intensity of a specific medium’s coverage.

Media selection is also a matter of matching the advertising medium with the product’s target market. If marketers are trying to reach teenage females, they might select Seventeen magazine. If they are trying to reach consumers over 50 years old, they may choose Modern Maturity.

A medium’s ability to reach a precisely defined market is audience selectivity. Some media vehicles , like general newspaper and network television, appeal to a wide cross section of the population. Others—such as Brides, Popular Mechanic, Architectural Digest, MTV, ESPN, and Christian radio stations—appeal to very specific groups.

Advertising agencies are companies that help create ads and place them in the proper media. Many firms rely on agencies to both create and monitor their ad campaigns.

Full-service advertising agencies offer the five services shown in Exhibit 16-2, page 478. Members of the creative services group develop promotional themes and messages, write copy, design layouts, take photos, and draw illustrations. The media services group selects the media mix and schedules advertising. Researchers may conduct market research studies for clients or help develop new products or gauge the firm’s or product image. Merchandising advice may include developing contests and brochures for the sales force. Campaign design and planning are often wholly in the hands of the agency, although some firms prefer to do much of the work in-house, relying on the agency only for scheduling media and evaluating the campaign.

Besides planning advertising campaigns and scheduling media, advertising agencies must also cope with the growing role and scope of advertising regulation.

To avoid increasing government regulation, in 1971 advertising industry leaders set up procedures for self-regulation.

The National Advertising Division (NAD) of the Council of Better Business Bureaus is a complaint bureau for consumers and advertisers.

The National Advertising Review Board (NARB) is an appeals board that may be used if the NAD is deadlocked on an issue or if the losing party wishes to appeal.

After receiving a complaint about an advertisement, the NAD investigates. It collects and evaluates information and then decides whether the ad’s claims are substantiated. If the ad is deemed unsatisfactory, the NAD negotiates with the advertiser to obtain a change in the ad or its discontinuation. Star-Kist, for example, recently complained that Bumblebee’s ads claimed that its tuna was preferred 2 to 1. The NAD ruled that Bumblebee’s research was not adequate to support the claim. Bumblebee agreed to drop the ads.

Advertising managers want to avoid having to drop or modify advertisements for commercials. Not only does the controversy create ill will for the company, but the ad must be remade, which can be expensive. In addition, if a substitute commercial is unavailable, the timing of the campaign my be destroyed.

When self-regulation doesn’t work, in the United States the Federal Trade Commission (FTC) steps in. The FTC’s main concern is with deception and misrepresentation in advertising. The FTC defines deception as “a representation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer’s detriment.” The courts have ruled that deception can include what the consumer infers from the advertisement, as well as what is literally said.

The FTC’s traditional remedy for deceptive advertising is a cease-and-desist order barring use of advertising claims found to be false or deceptive. In some cases, the FTC also requires a corrective message.

Corrective advertising is an advertisement run to correct the false impressions left by previous ads. For example, after investigating several diet-program companies for false and deceptive advertising, the FTC required them to revise their weight-loss claims so that they accurately reflected the programs’ success in helping customers keep off the weight they lose.

Advertising acquaints potential customers with a product and thereby makes personal selling easier.

Personal selling is a face-to-face sales presentation to a prospective customer. Sales jobs range from salesclerks at clothing stores to engineers with MBAs who design large, complex systems for manufacturers. About 6.5 million people are engaged in personal selling in the United States. Slightly over 45 percent of them are women. The number of people who earn a living from sales is huge compared, for instance, with the half a million workers employed in the advertising industry.

the product. This capability is especially desirable for complex or new goods and services.

interests of each prospective customer. Moreover, when the prospect has questions or raises objections, the salesperson is there to provide explanations. In contrast, advertising and sales promotion can respond only to the objections the copywriter thinks are important to customers.

forms of promotion include some unavoidable waste because many people in the audience are not prospective customers.

sales force (and resulting expenses) in one-person increments. In contrast, advertising and sales promotion must often be purchased in fairly large amounts.

considerably more effective than other forms of promotion in obtaining a sale and gaining a satisfied customer.

Companies that recruit college graduates to enter the field of selling want to develop professional sales people. A professional salesperson has two main qualities: complete product knowledge and creativity. The professional knows the product line from A to Z and understands what each item can and cannot do. He or she also understands how to apply the product to meet customer needs. For instance, a sales rep may find a way to install conveyor equipment that will lower the cost of moving products in the prospective customer’s plant.

Professional salespeople develop long-term relationships with their clients. Most salespeople rely on repeat business, which depends, of course, on trust and honesty. Most professional selling is not high pressured. Instead, the sales process is more a matter of one professional interacting with another, such as a salesperson working with a purchasing agent. Professional salespeople are largely sources of information and creative problem solvers. they cannot bully a professional buyer into making an unwanted purchase.

College graduates have many opportunities in sales. Among them are the following:

resale, its main concerns are buying the right product and getting it promptly. Often retailers expect the manufacturer’s salesperson to stock the merchandise on the shelves and to set up promotional materials approved by the store. Sometimes these sales jobs are entry-level training positions that can lead to better opportunities.

government agencies, manufacturing firms, and institutions (hospitals and schools). Purchasing agents look for credibility (Can the salesperson deliver merchandise of the proper quality when needed?), service after sale, and a reasonable price. The message the salesperson must get across is one of complete dependability and reliability.

most professionalism and creativity is selling to a buying committee. When a purchase decision is so important that it will have a big impact on the buyer’s long-run success, it is usually made by a committee. When United Airlines decides to order 100 new airplanes, for instance, a committee decides what type of plane to buy. A committee sales presentation requires careful analysis of the potential buyer’s needs. It commonly includes an audiovisual display.

Selling is a process that can be learned. Scholars have spelled out the steps of the selling process, shown in Exhibit 16-3, and professional salespeople use them all the time. These steps are as follows:

Satisfied

customer

6. Following

up sale

5. Closing sale

4. Handling

objections

3. Presenting and

demonstrating

product

2. Approaching

customers

1. Prospecting and

qualifying

looks for sales prospects, those companies and people who are most likely to buy the seller’s offerings. This activity is called prospecting. Because there are not sure-fire ways to find prospects, most salespeople try many methods.

For many companies , the inquires generated by advertising and promotion are the most likely source prospects. Inquires are also known as sales leads. Leads usually come in the form of letters, cards, or telephone calls. Some companies supply salespeople with prospect lists compiled from external sources, such as Chamber of Commerce directories, newspapers, public records, club membership lists, Internet inquiries, and professional or trade publication subscription lists. Meetings, such as professional conventions and trade shows, are another good source of leads. Sales representatives attend such meetings to display and demostrate their company’s products and to answer the questions of those attending. The firm’s files and records can be another source of prospects. Correspondence with buyers can be helpful. Records in the service department can identify people who already own equipment and might be prospects for new models. Finally, friends and acquaintances of salespeople can often supply leads.

One rule of thumb is that not all prospects are “real.” Just because someone has been referred or has made an inquiry does not mean that the person is a genuine prospect. Salespeople can avoid wasting time and increase their productivity by qualifying all prospects.

Qualifying questions are used to separate prospects from those who do not have the potential to buy. The following three questions help determine who is a real prospect and who is not. (1) Does the prospect have a need for our product? (2) Can the prospect make the buying decision? (3) Can the prospect afford our product?

salesperson explains the reason for wanting an appointment and sets a specific date and hour. At the same time, the salesperson tries to build interests in the coming meeting. One good way to do this is to impart an interesting or important piece of information—for instance, “I think my product can cut your shipping and delivery time by two days.”

demonstration can be fully automated, completely unstructured, or somewhere in between. In a fully automated presentation, the salesperson shows a movie, slides, or a laptop and data projector and then answers questions and takes any orders. A completely unstructured presentation has no format. It may be a casual conversation, with the salesperson presenting product benefits that might interest the potential buyer.

unstructured, meets with some objection. Rarely does a customer say “I’ll buy it” without asking questions or voicing concerns. The professional salesperson tries to anticipate objections so they can be countered quickly and with assurance. Read what Mack Jarvis, sales vice-president, Oracle Corporation, has to say about handling objections:

computer industry—where often you are selling a vision rather than a product. It requires passion and emotion. When I’m in the selling zone, every cell in my body is working toward the same goal. I give myself instant feedback: if I’m emotionally drained after trying to make a sale, I know that I’ve done a good job.

When I prepare for a sales presentation, I try to think like my client and like my competitor. I try to pinpoint every objection that either of them could make to my presentation. I write these objections down, and then I figure out a way to respond to each one in three lines or less. I’ve given these “scripts” to sales reps, who then used them in their presentations. It’s staggering how even the most boring sales rep can become a great salesperson simply by learning to convey a few simple points. If you can move a customer so that he or she can’t argue against your point, then you’ve won.

time to close the sale. Even old pros sometimes find this part of the sales process awkward. Perhaps the easiest way to close a sale is to ask for it: “Ms. Jones, may I write up your order?” Another technique is to act as though the deal has been concluded: “Mr. Bateson, we’ll have this equipment in and working for you in two weeks.” If Mr. Bateson doesn’t object, the salesperson can assume that the sale has been made.

sale is made. In fact, the sale is just the start. The salesperson must write up the order properly and turn it in promptly. Often this part of the job is easy. But an order for a complex piece of industrial equipment may be a 100 pages of detail. Each detail must be carefully checked to ensure that the equipment is exactly what was ordered.

After the product is delivered to the customer, the salesperson must make a routine visit to see that the customer is satisfied. This follow-up call may also be a chance to make another sale. But even if it isn’t, it will build goodwill for the salesperson’s company and may bring future business. Repeat sales over many years are the goal of professional salespeople.

Sales promotions are marketing events or sales efforts—not including advertising, personal selling, and public relations—that stimulate buying. Today, sales promotion is an $80 billion industry and growing. Couponing alone is a $6 billion industry with over 275 billion coupons being distributed annually. Sales promotion is usually targeted toward either of two distinctly different markets. Consumer sales promotion is targeted to the ultimate consumer market. Trade sales promotion is directed to members of the marketing channel, such as wholesalers and retailers.

Immediate purchase is the goal of sales promotion, regardless of the form it takes. Therefore, it makes sense when planning a sales promotion campaign to target customers according to their general behavior. For instance, is the consumer loyal to your product or to your competitor’s? Does the consumer switch brands readily in favor of the best deal? Does the consumer by only the least expensive product, no matter what? Does the consumer buy any products in your category at all?

The objectives of promotion depend on the general behavior of target consumers as described in Exhibit 16-4, page 484. For example, marketers who are targeting loyal users of their product don’t want to change behavior. Instead, they want to reinforce existing behavior or increase product usage. Frequent buyer programs that reward consumers for repeat purchases can be effective in strengthening brand loyalty. Other types of promotions are more effective with customers prone to brand switching or with those who are loyal to a competitor’s products. Cents-off coupons, free samples, or an eye-catching display in a store will often entice shoppers to try a different brand. Store signs and displays have been given some catchy names by the sales promotion industry. Several are listed in Exhibit 16-5, page 484.

Sales promotion offers many opportunities for entrepreneurs. Entrepreneurs design contests, and sweepstakes, fabricate displays, manufacture premiums, and deliver free samples, among other things.

Like sales promotion, public relations can be a vital part of the promotional mix. Public relations is any communication or activity designed to win goodwill or prestige for a company or person.

Its main form is publicity, information about a company or product that appears in the news media and is not directly paid for by the company. Publicity can be good or bad. Children dying from eating tainted Jack-In-The-Box hamburgers is an example of negative publicity.

Naturally, firms’ public relations departments try to create as much good publicity as possible. They furnish company speakers for business and civic clubs, write speeches for corporate officers, and encourage employees to take active roles in such civic groups as the United Way and the Chamber of Commerce.

The main tool of the public relations department is the press release, a formal announcement of some newsworthy event connected with the company, such as the start of a new program, the introduction of a new product, or the opening of a new plant. Public relations departments may perform any or all of the functions described in Exhibit 16-6, page 486.

Publicity is instrumental in introducing new products and services. Publicity can help advertisers explain what’s different about their new product by prompting free news stories or positive word-of-mouth about it. During the introductory period, an especially innovative new product often needs more exposure than conventional, paid advertising affords. Public relations professionals write press releases or develop videos in an effort to generate news about their new product. They also jockey for exposure of their product or service at major events, on popular television and news shows, or in the hands of influential people.

Public relations managers may sponsor events or community activities that are sufficiently newsworthy to achieve press coverage; at the same time, these events also reinforce brand identification. Sporting, music, and arts activities remain the most popular choices of event sponsors. For example, almost all the major college football bowls are sponsored by a product such as the Tostitos Fiesta Bowl, the FedEx Orange Bowl, and the Nokia Sugar Bowl. Many sponsors are also turning to more specialized events that have tie-ins with schools, charities, and other community service organizations.

Promotional mixes vary a great deal from product to product and from one industry to the next. Advertising and personal selling are usually a firm’s man promotional tools. They are supported by sales promotion. Public relations helps to develop a positive image for the organization and its products. The specific promotional mix depends on the nature of the product, market characteristics, available funds, and whether a push or a pull strategy is used.

Selling toothpaste differs greatly from selling overhead industrial cranes. Personal selling is most important in marketing industrial products and least important in marketing consumer nondurables. Print media are used for all types of consumer products. Industrial products may be advertised through special trade magazines. Sales promotion, branding, and packaging are roughly twice as important (in terms of percentage of the promotional budget) for consumer products as for industrial products.

When potential customers are widely scattered, buyers are highly informed, and many of the buyers are brand loyal, the promotional mix should include more advertising and sales promotion and less personal selling. But sometimes personal selling is required even when buyers are well informed and geographically dispersed, as in the case with mainframe computers. Industrial installations and component parts may be sold to knowledgeable people with much education and work experience. Yet a salesperson must still explain the product and work out the details of the purchase agreement.

Salespeople are also required when the physical stocking of merchandise—called detailing—is the norm. Milk and bread, for instance, are generally stocked by the person who makes the delivery, rather than by store personnel. This practice is becoming more common for convenience products as sellers try to get the best display space for their wares.

Money, or the lack of it, is one of the biggest influences on the promotional mix. A small manufacturer with a tight budget and a unique product may rely heavily on free publicity. The media often run stories about new products.

If the product warrants a sales force, a firm with little money may turn to manufacturers’ agents. They work on commission, with no salary, advances, or expense accounts. The Duncan Co., which makes parking meters, is just one of the many that rely on manufacturers’ agents.

Manufacturers may use aggressive personal selling and trade advertising to convince a wholesaler or retailer to carry and sell their merchandise.

This approach is known as a push strategy. The wholesaler, in turn, must often push the merchandise forward by persuading the retailer to handle the goods. A push strategy relies on extensive personal selling to channel members, or trade advertising, and price incentives to wholesalers and retailers. The retailer then uses advertising, displays, and other promotional forms to convince the consumer to buy the “pushed” products. This approach also applies to services. For example, the Jamaican Tourism Board targets promotions to travel agencies, which are members of its distribution channel.

At the other extreme is a pull strategy, which stimulates consumer demand in order to obtain product distribution. Rather than trying to sell to wholesalers, a manufacturer using a pull strategy focuses its promotional efforts on end customers. As they begin demanding the product, the retailer orders the merchandise from the wholesaler. The wholesaler, confronted with rising demand, then places an order from the manufacturer. Thus, stimulating consumer demand pulls the product down through the channel of distribution. Heavy sampling, introductory consumer advertising, cents-off campaigns, and couponing may all be used as part of a pull strategy. For example, using a pull strategy, the Jamaican Tourism Board may entice travelers to come to its island by offering discounts on hotels or airfare. The push and pull promotional strategies are illustrated in Exhibit 16-7 on p. 488.

Rarely does a company use a pull or a push strategy exclusively. Instead, the mix will emphasis one of these strategies. For example, pharmaceutical company Marion Merrell Dow uses a push strategy, emphasizing personal selling and trade advertising, to promote its Nicoderm patch nicotine withdrawal therapy to physicians. Sales presentations and advertisements in medical journals give physicians the detailed information they need to prescribe the therapy to their patients who want to quite smoking. Marian Merrell Dow supplements its push promotional strategy with a pull strategy targeted directly to potential patients through advertisements in consumer magazines and on television. The advertisements illustrate the pull strategy in action: Marion Merrell Dow directs consumers to ask their doctors about the Nicoderm patch.

Companies are adopting new promotional strategies to hone their marketing message and reach more customers. They are also reacting to new technologies, such as digital VCR, that make it harder to measure audience size. Integrated marketing communications, the explosive growth of Internet advertising, and the impact of the digital VCR on television advertising are discussed in this section.

Ideally, marketing communications from each promotional mix element (personal selling, advertising, sales promotion, and public relations) should be integrated. That is, the message reaching the consumer should be the dame regardless of whether it comes from an advertisement, a salesperson in the field, or a magazine article, or a coupon in a newspaper insert.

From the consumer’s standpoint, a company’s communications are already integrated. Typical consumers do not think in terms of advertising, sales promotion, or public relations, or personal selling. To them everything is an “ad.” Unfortunately, many marketers neglect this fact when planning promotional messages and fail to integrate the various elements of their communications efforts. The most common rift typically arises between personal selling and the other elements of the promotional mix.

This unintegrated, disjointed approach to promotion has propelled many companies to adopt the concept of integrated marketing communications (IMC). IMC involves the carefully coordinating all promotional activities—media advertising, sales promotion, personal selling, and public relations, as well as direct marketing, packaging, and other forms of promotion—to produce a consistent, unified message that is customer focused. Following the concept of IMC, marketing managers carefully work out the roles the various promotional elements will play in the marketing mix. Timing of promotional activities is coordinated, and the results of each campaign are carefully monitored to improve future use of the promotional mix tools. Typically, a marketing communications director is appointed who has overall responsibility for integrating the company’s marketing communications.

The explosive growth of the Internet has led to similar growth in Web advertising. For companies whose businesses are based on the Internet, building a recognized brand name is important. With nothing to pick up or touch and hundreds of similar-sounding sites to chose from, online consumers have little to go on except a familiar name. In cyberspace, anyone with enough resources to rent space on a server and build some buzz for its brand is a potentially dangerous competitor.

There’s growing recognition among marketers, however, that the advertising tactics they have tried so far on the Web have been ineffective. The emotion-laden vignettes that work so well on TV simply don’t excite viewers in cyberspace. Meanwhile, the established methods of Internet advertising don’t do much better. Pop-up ads that just pop up on the screen are annoying interruptions to the online experience. Spending on banner ads is expected to drop as companies conclude that computer users are ignoring them. On the Internet, the consumer is in charge. That means marketers set on building their brands in the online world have to persuade consumers to participate in their marketing efforts.

The latest theory on how to do that is called rational branding. The idea is to marry the emotional sell of traditional brand marketing—the message that links “Disney” with “family” or “Volvo” with “safety”—with a concrete service that is offered only online. Rational branding strives to both move and help the online consumer at the same time. In essence, the advertiser “pays” the consumer to endure the brand message by performing some kind of service. But the tactic poses a real challenge to makers of consumer products. There are very few ways to make soap or soda useful in the virtual world. Indeed, most of the top five buyers of TV Advertising (General Motors, Procter & Gamble, Johnson & Johnson, Phillip Morris, and Ford) are nearly invisible online.

MasterCard has found a way to use rational branding by offering Shop Smart, a type of MasterCard seal of approval given to e-commerce sites that use advanced credit card security systems. The program lets MasterCard slap its logo all over the hottest new online shopping sites. It also gives the company a chance to promote its Internet image.

Though the digital VCR is made of little more than a few integrated circuits, a power supply, and a massive multi-gigabyte hard drive, it will render traditional VCRs obsolete. Here’s why. Most people these days use VCRs to play prerecorded tapes. Although you can use a VCR to tape your favorite programs and watch them on your own time, that doesn’t happen very often. The gadgets are too hard to use. This won’t be the case with digital VCRs. With some simple programming through remote control, a digital VCR will proactively record the shows you want to see. Tell it you are an Oprah Winfrey fan, and it automatically records all Oprah shows so that you can watch them when its convenient. These devices take note of which programs you watch and recommend shows you didn’t know about. They’ll even record more than one show at a time.

Why will this technology affect advertising? The reason is that TV advertisers—not to mention viewers—are used to a world of synchronous viewing. For the past 50 years, shows have belonged in times slots, and people have watched whatever is on at that particular time. As a result, ad sales are typically based on Nielsen audience ratings, which measure how many people are watching a show at a given moment.

But the digital VCR makes it very easy to watch shows on your own time—in other words, asynchronously. Watching TV will be more like surfing the Web than viewing a movie. That may reduce the Nielsen influence and make it even more difficult to measure the size of the audience watching and single program. This, in turn, will make it difficult for the television networks to price their airtime for commercials. It will also make it difficult for advertisers to know if a price is fair.

A second technology that will impact TV advertising is Gemstar’s interactive program guide. Essentially Gemstar is creating and controlling a TV portal—the first screen viewers will see when they turn on their TVs to navigate hundreds of choices. It has been called the Yahoo! of television. Because more people watch TV than use the internet, Gemstar claims it will be than Yahoo!. It is estimated that viewers will click on the TV portal at least four times per hour, generating hundreds of millions of page-views. Each page-view represents an opportunity to place banner ads.

Two important points from this chapter apply directly to you now. By understanding how advertising is changing to benefit you, you will be a better informed consumer. By realizing the importance of selling yourself, you will be better able to take advantage of life’s opportunities.

More and more advertising dollars will directed to online promotion in the future. For the online advertiser, the challenge is to educate, entertain, or otherwise give you a benefit. Advertisers know that no one can be compelled to pay attention online—they must deliver benefits up front. If Colgate Palmolive wants to advertise toothpaste online, it needs more than photogenic lovers with toothy smiles. Unilever has created a Web site for Mentadent toothpaste that offers potential customers the chance to order a free sample, get oral-care advice, and send questions to a dental hygienist. Every week American Airlines sends email to more than a million Net-SAAver subscribers listing rock-bottom fares for under-subscribed flights on the coming weekend. You can and should expect to receive benefits from online advertisers.

Email advertising is also becoming more personal and more valuable to you. Although users of email have long complained about unwanted direct marketing—commonly called spam—that hasn’t stopped companies from looking for new and improved ways to exploit email as a marketing tool. Now, by using sophisticated data-mining techniques to develop far more tailored messages, marketers may well be succeeding. Lured by the speed, cost savings, and personal pitches that are possible online, companies such as 1-800-Flowers, Amazon.com, and Macy’s are testing the tactic. “If the customer is willing, it’s the ideal opportunity for a personalized dialogue,” say Kent Anderson, president of Macys.com, the department store’s online entity.

If you stop and think about it, all of us must be salespeople. If you are going to be successful in business, and in life in general, you must be a salesperson. You must be able to effectively explain and sell your plans, ideas, and hopes. A straight A student who can’t do this will not be successful. Conversely, a C student who can will be successful. Always be prepared to sell yourself and your ideas. It’s the best way to get ahead in business and in life.

Promotion aims to stimulate demand for a company’s goods or services. Promotional strategy is designed to inform, persuade, or remind target audiences about those products. The goals of promotion are to create awareness, get people to try products, provide information, keep loyal customers, increase use of a product, and identify potential customers.

The unique combination of advertising, personal selling, sales promotion, and public relations used to promote a product is the promotional mix. Advertising is any paid form of nonpersonal promotion by an identified sponsor. Personal selling consists of a face-to-face presentation in a conversation with a prospective purchaser. Sales promotion consists of marketing activities—other than personal selling, advertising, and public relations—that stimulate consumers to buy. These activities include coupons and samples, displays, shows and exhibitions, demonstrations, and other selling efforts. Public relations is the marketing function that links the policies of the organization with the public interest and develops programs designed to earn public understanding and acceptance.

Institutional advertising creates a positive picture of a company. Advocacy advertising takes a stand on controversial social or economic issues. Product advertising features a specific good or service. Comparative advertising is product advertising in which the company’s product is compared with competing, named products. Reminder advertising is used to keep a brand name in the public’s mind.

The main types of advertising media are newspapers, magazines, radio, television, outdoor advertising, direct mail, and the Internet. Newspaper advertising delivers a local audience but has a short life span. Magazines deliver special interest markets and offer good detail and color. Radio is an inexpensive and highly portable medium but has not visual capabilities. Television reaches huge audiences and offers visual and audio opportunities, but it can be very expensive. Outdoor advertising requires short messages but is only moderately expensive. Direct mail can reach targeted audiences, but it is only as good as the mailing list. The Internet is global in scope and can offer a personalized message response by email, but as yet not everyone is on the Net. Media are evaluated on a CPM (cost per thousand contacts) basis and by reach and frequency.

About 6.5 million people in the United States are directly engaged in personal selling. Personal selling enables a salesperson to demonstrate a product and tailor the message to the prospect; it is effective in closing a sale. Professional salespeople are knowledgeable and creative. They are also familiar with the selling process, which consists of prospecting and qualifying, approaching customers, presenting and demonstrating the product, handling objections, closing the sale, and following up on the sale.

Immediate purchase is the goal of sales promotion whether it is aimed at consumers or the trade (wholesalers or retailers). The most popular sales promotions are coupons, samples, premiums, contests, and sweepstakes. Trade shows, conventions, and point-of-purchase displays are other types of sales promotion.

Public relations is mostly concerned with getting good publicity for companies. Publicity is any information about a company or product that appears in the news media and is not directly paid for by the company. Public relations departments furnish company speakers for business and civic clubs, write speeches for corporate officers, and encourage employees to take active roles in civic groups. These activities help build a positive image for an organization, which is a good backdrop for selling its products.

The factors that affect promotional mix are the nature of the product, market characteristics, available funds, and whether a push or a pull strategy is emphasized. Personal selling is used more with industrial products, and advertising is used more heavily for consumer products. With widely scattered, well-informed buyers and with brand-loyal customers, a firm will blend more advertising and sales promotion and less personal selling into its promotional mix. A manufacturer with a limited budget may rely heavily on publicity and manufacturers’ agents to promote the product.

Integrated marketing communications (IMC) is being used by more and more organizations. It is the careful coordination of all the elements of the promotional mix to produce a consistent, unified message that is customer focused. A second trend is the growth of the Internet. Advertisers have found that they must use rational branding. A final trend is that digital VCRs may make the measurement of television audiences more difficult.