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Credit Sprint's Guide to Marketing Unit 10: Promotion, IMC and E-commerce

CLEP® weight 12%

Promotion informs, persuades and reminds. Integrated marketing communications (IMC) makes every message work together. This unit covers the communication process, the promotion mix, advertising, personal selling, sales promotion, public relations, direct marketing and marketing online.

The promotion funnel (AIDA)AttentionInterestDesireActionFewer people at each step: measure with CTR and conversion rate

What you need to know

  • The communication process: sender, encoding, message, channel (medium), decoding, receiver and feedback. Noise is anything that distorts the message.
  • Promotion objectives: inform, persuade and remind. AIDA is a common model: attention, interest, desire, action. The hierarchy of effects runs from awareness to knowledge, liking, preference, conviction and purchase.
  • The promotion mix: advertising, personal selling, sales promotion, public relations (publicity) and direct marketing. IMC coordinates them into one consistent message.
  • Push strategy aims promotion at channel members to push the product through the channel. Pull strategy aims at final consumers so that they demand the product from retailers.
  • Advertising types: product (informative, persuasive, reminder, comparative) and institutional (builds image). Budget methods: percent of sales, competitive parity, objective-and-task and all-you-can-afford.
  • Media terms: reach (people exposed at least once), frequency (average exposures), gross rating points (reach × frequency) and cost per thousand (CPM = cost ÷ audience in thousands).
  • Personal selling is two-way, flexible and costly. Steps: prospecting, preapproach, approach, presentation, handling objections, closing and follow-up. Roles: order taker, order getter and sales support.
  • Sales promotion is short-term incentives: coupons, rebates, samples, premiums, contests and sweepstakes, point-of-purchase displays, trade shows, loyalty programs and trade allowances.
  • Public relations builds goodwill through publicity (unpaid media coverage), events, sponsorships and crisis management. Publicity is credible but not controlled.
  • Direct marketing talks to targeted individuals: direct mail, catalogs, telemarketing and email. Word-of-mouth, buzz and viral marketing spread through people.
  • E-commerce is buying and selling online. Models: B2C, B2B, C2C and D2C. Online tools: search engine optimization (SEO), paid search (PPC), display ads, email, social media, content and influencer marketing, affiliates and mobile marketing.
  • Digital metrics: click-through rate, conversion rate, bounce rate and cart abandonment. Behavioral targeting and cookies raise privacy issues; opt-in email, COPPA and CAN-SPAM set rules.

Formulas and rules

GRP = reach (%) × frequency
CPM = cost of the ad ÷ audience (in thousands)
Click-through rate = clicks ÷ impressions
Conversion rate = purchases ÷ visitors

Exam traps

Watch forPublicity is not paid for and not controlled; advertising is paid and controlled.
Watch forPush targets channel members; pull targets final consumers.
Watch forReach counts different people; frequency counts how often each is exposed.
Watch forSales promotion is short-term; advertising and PR build over time.

Key terms

  • Promotion mix: Advertising, personal selling, sales promotion, public relations and direct marketing.
  • Integrated marketing communications (IMC): Coordinating all promotion so the message is consistent.
  • AIDA: Attention, interest, desire, action.
  • Noise: Anything that distorts a message in the communication process.
  • Push strategy: Promotion aimed at channel members.
  • Pull strategy: Promotion aimed at final consumers.
  • Reach: The number of different people exposed to a message.
  • Frequency: The average number of times each person is exposed.
  • Gross rating points (GRP): Reach multiplied by frequency.
  • CPM: Cost per thousand audience members.
  • Institutional advertising: Advertising that builds a firm's image.
  • Comparative advertising: Advertising that compares a brand with competitors.
  • Personal selling: Direct two-way communication with buyers.
  • Order getter: A salesperson who actively seeks new business.
  • Sales promotion: Short-term incentives to encourage purchase.
  • Premium: An item given free or cheaply with a purchase.
  • Rebate: A refund of part of the price after purchase.
  • Sweepstakes: A game of chance with no purchase required.
  • Point-of-purchase display: A display near the place of sale.
  • Public relations: Building goodwill with the public.
  • Publicity: Unpaid media coverage.
  • Direct marketing: Communicating with targeted individuals to get an immediate response.
  • Telemarketing: Selling by telephone.
  • Word of mouth: Informal talk among consumers.
  • E-commerce: Buying and selling over the internet.
  • SEO: Search engine optimization: improving organic search ranking.
  • Pay-per-click (PPC): Advertising you pay for only when someone clicks.
  • Click-through rate: Clicks divided by impressions.
  • Conversion rate: The percent of visitors who take the desired action.
  • Behavioral targeting: Showing ads based on a person's online behavior.
  • Influencer marketing: Paying people with large followings to promote a brand.
  • Affiliate marketing: Paying partners a commission for sales they send.
  • Opt-in: Permission given by a person to receive messages.

Practice questions

Five of the 56 Unit 10 questions in Credit Sprint. Every choice is explained in the app.

1. The four main elements of the promotion mix are advertising, personal selling, sales promotion and
  1. public relations
  2. pricing
  3. warehousing
  4. packaging
Show answer

public relations. Publicity and PR complete the traditional mix.

2. Public relations aims to
  1. train retailers only
  2. manage warehouses
  3. build goodwill and a positive image with various audiences
  4. set prices
Show answer

build goodwill and a positive image with various audiences. PR manages relationships with the public.

3. A push strategy directs promotion mainly at
  1. competitors
  2. the government
  3. channel members, such as wholesalers and retailers
  4. final consumers
Show answer

channel members, such as wholesalers and retailers. The aim is to push the product through the channel.

4. Which medium offers the most precise targeting of individual consumers?
  1. Billboards
  2. Digital and social media
  3. Network television
  4. Radio
Show answer

Digital and social media. Platforms use data to target by interest and behavior.

5. Pay-per-click advertising means the advertiser
  1. pays only when someone clicks the ad
  2. pays only when a sale is made
  3. pays nothing
  4. pays a flat fee only
Show answer

pays only when someone clicks the ad. Cost is tied to clicks.