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EOM - Unit 4

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EOM - Unit 4

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abishekahss12
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Unit 4

Promotion Mix
(Marketing Communications Mix)
• The specific blend of promotion tools (advertising, public
relations, personal selling, sales promotion, and direct
marketing tools) that the company uses to convincingly
communicate customer value and build customer
relationships.
Advertising
• Any paid form of non-personal presentation and
promotion of ideas, goods, or services by an identified
sponsor via
– print media (newspapers and magazines),
– broadcast media (radio and television),
– network media (telephone, cable, satellite, wireless),
– electronic media (audiotape, videotape, videodisk, CD-
ROM, Web page),
– Mobile media,
– display media (billboards, signs, posters).
Sales promotion
• Short-term incentives to encourage the purchase or sale of a
product or a service.
– consumer promotions
– trade promotions
– business and sales force promotions
• includes discounts, coupons, displays, demonstrations, and
events.
Personal Selling
• Face to face personal interactions with the customer by the
firm’s sales force for the purpose of engaging customers,
making sales, and building customer relationships.
• includes sales presentations, trade shows, and incentive
programs.
Direct marketing
• Direct marketing is the use of consumer-direct (CD)
channels to reach and deliver goods and services to customers
without using marketing middlemen.
• Helps to obtain an immediate response and build lasting
customer relationships.
• includes direct mail, email, telemarketing, catalogs, online and
social media, mobile marketing, and more
Public relations (PR) or Publicity
• Building good relations with the company’s various publics
by obtaining favorable publicity, building up a good
corporate image, and handling or heading off unfavorable
rumors, stories, and events.
• includes press releases, sponsorships, events, and webpages.
Communication Macro Model
• major parties—sender and receiver
• major tools—message and media
• major communication functions—encoding, decoding,
response, and feedback.
• Noise - random and competing messages that may interfere
with the intended communication.
Communication Macro Model
• Senders must know
– what audiences they want to reach
– what responses they want to get.
• They must encode their messages so the target audience can
successfully decode them.
• They must transmit the message through media that reach the
target audience and develop feedback channels to monitor the
responses.
Communication Micro Model
• Concentrate on consumers’ specific responses to communications.
Communication Micro Model
• Awareness. If most of the target audience is unaware of the object,
the communicator’s task is to build awareness.
• Knowledge. The target audience might have brand awareness but not
know much more.
• Liking. Given target members know the brand, how do they feel
about it?
• Preference. The target audience might like the product but not
prefer/ suggest it to others.
• Conviction. A target audience might prefer a particular product but
not develop a faith/belief about buying it.
• Purchase. Finally, some members of the target audience might have
conviction but not quite get around to making the purchase.
Developing Effective Communication Strategies:
1) Identify the Target Audience:
• Process must start with a clear target audience in mind
– potential buyers of the company’s products,
– current users, deciders, or influencers,
– and individuals, groups, particular public, or the general
public.
• The target audience influence on the communicator’s
decisions about what to say, how, when, where, and to whom.
2) Determine the Communications Objectives:
• Establish the Category Need— Ex - A new to the world
product such as electric cars will always begin with a
communications objective of establishing category need.

• Creating Brand Awareness—Raising the consumer’s ability


to recognize or recall the brand in sufficient detail to make a
purchase.
2) Determine the Communications Objectives:
• Building Brand Attitude—Helping consumers evaluate the
brand’s perceived ability to meet a currently relevant need
• Relevant brand needs may be
– negatively oriented (problem removal, problem avoidance)
– positively oriented (sensory satisfaction, intellectual
stimulation, or social approval).
– Household cleaning products - problem solution;
– Food products – sensory oriented ads
• Brand Purchase Intention—Moving consumers to decide to
purchase the brand.
• Promotional offers like coupons or two-for-one deals
encourage consumers to make a mental commitment to buy.
3) Design the Communications:
• What to say (message strategy),
– the appeals or ideas may relate directly to
• product or service performance (the quality, economy,
value of the brand),
• whereas others may relate to (the brand as being
contemporary, popular, traditional).
• Who should say it (message source):
– Celebrity
3) Design the Communications:
• Wow to say it (creative strategy),
• Informational Appeals - elaborates on product or service benefits.
– Ex - problem solution ads (Saridon stops the toughest headache
pain),
– product demonstration ads (M-Seal can withstand intense rain,
snow, and heat),
• Transformational appeal elaborates on a non product-related benefit
or image.
– Communicators use negative appeals such as fear, guilt, and
shame to get people to do things (brush their teeth, have an annual
health checkup) or stop doing things (smoking, abusing alcohol,
overeating).
– Communicators also use positive emotional appeals (Dairy milk)
such as humor, love, pride, and joy.
4) Select the Communications Channels:
• Personal Communications Channels : let two or more
persons communicate face-to-face or person-to-audience
through a phone, mail, or e-mail.
• Ex - direct and interactive marketing, word-of-mouth
marketing, and personal selling.
• Non-Personal (Mass) Communications Channels: are
communications directed to more than one person and include
advertising, sales promotions, events and experiences, and
public relations.
5) Establish the Total Marketing
Communications Budget:
• Affordable Method :
• Some companies set the communications budget at what they think they
can afford.
• Percentage-of-sales Method:
• Some companies (Automobile companies) set communication
expenditures at a specified percentage of current or anticipated sales.
• Competitive-parity Method:
• Some companies set their communications budgets to achieve share of
voice parity with competitors.
• Objective-and-Task Method:
• develop communications budgets by defining specific objectives,
identifying the tasks that must be performed to achieve these objectives,
and estimating the costs of performing them.
6) Deciding on the Marketing
Communications Mix:
Type of product market:
• Consumer marketers tend to spend comparatively more on
sales promotion and advertising;
• Business marketers tend to spend comparatively more on
personal selling.
6) Deciding on the Marketing
Communications Mix:

Buyer Readiness Stage Communication tool


awareness-building Advertising and publicity
Customer comprehension advertising and personal selling
(gaining knowledge)
Customer conviction personal selling
(faith or belief)
Closing the sale (purchase) & Reordering personal selling and sales
promotion
6) Deciding on the Marketing
Communications Mix:
Product Life cycle stage Communication tool

advertising, events and experiences, & publicity - highest


cost-effectiveness,
Introduction personal selling - to gain distribution coverage and
sales promotion and direct marketing - to induce trial

Growth word of mouth and interactive marketing

Maturity Advertising, events and experiences, and personal selling

Decline Sales promotion


7) Measuring Communication Results:
• Calculate the sales before and after the promotional activity.
8) Managing IMC:
• Integrated Marketing Communication is a process of
promoting the products using all possible Communication mix
tools.
• IMC should improve the company’s ability to reach the right
customers with the right messages at the right time and in the
right place.
• Coordinating Media:In order to achieve maximum impact,
the marketers should use all possible personal and non
personal communication channels.
• Implementing IMC:
• To facilitate one-stop shopping, Ad agencies have acquired
promotion agencies, public relations firms, package design
consultancies, Web site developers, and direct-mail houses.
• The result is integrated and more effective marketing
communications at a much lower total communications cost.
Advertising
• Any paid form of non-personal presentation and promotion of
ideas, goods, or services by an identified sponsor via
– print media (newspapers and magazines),
– broadcast media (radio and television),
– network media (telephone, cable, satellite, wireless),
– electronic media (audiotape, videotape, videodisk, CD-
ROM, Web page), and
– display media (billboards, signs, posters).
Developing and Managing an
Advertising Program:
1) Setting the Advertisement Objectives
(Mission):
• Informative advertising: aims to create brand awareness and
knowledge of new products.
• Persuasive advertising: aims to create liking, preference,
conviction, and purchase of a product or service.
• Reminder advertising: aims to stimulate repeat purchase of
products and services.
• Reinforcement advertising: aims to convince current
purchasers that they made the right choice.
2) Deciding on the Advertising Budget
(Money):
• Stage in the product life cycle—
• Market share and consumer base—
• Competition —
• Advertising frequency—
• Product substitutability—Brands in less-differentiated or
commodity-like product classes (beer, soft drinks, banks, and
airlines) require heavy advertising to establish a unique image.
3) Developing the Advertising Campaign
(Message):

• Rational Appeal: Focuses on Measurable benefits of


selecting the product or brand.
• Emotional Appeal: Try to create a good feel about
the product.
• Fear Appeal: Arouses fear by demonstrating the
consequences of not purchasing & using a particular
product.
4) Deciding on Media (Media):
• Reach (R). The number of different persons or households
exposed to a particular media schedule at least once during a
specified time period
• Frequency (F). The number of times within the specified time
period that an average person or household is exposed to the
message
• Impact (I). The qualitative value of an exposure through a
given medium
4) Deciding on Media (Media):
5) Measuring Effectiveness
(Measurement):
Communication Effect Research:
• Communication-effect research, called copy testing, seeks to
determine whether an ad is communicating effectively.
• Copy testing is a specialized field of marketing research that
determines an advertisement's effectiveness based on
consumer responses, feedback, and behavior.
• Marketers should perform this test both before an ad is put
into media and after it is printed or broadcast.
Sales Effect Research:
• What sales are generated by an ad that increases brand
awareness by 20 percent and brand preference by 10 percent?
Sales Promotion
Sales Promotion
• A variety of short-term incentives to encourage trial
or purchase of a product or service including
– consumer promotions.
– trade promotions.
– business and sales force promotions .
Developing & Managing a Sales
Promotion:
1) Establishing Objectives:
• For consumers, objectives include
– encouraging purchase of larger-sized units,
– building trial among nonusers, and
– Attracting switchers away from competitors’ brands.
• For retailers, objectives include
– persuading retailers to carry new items
– encouraging off-season buying,
– encouraging stocking of related items,
– offsetting competitive promotions,
– building brand loyalty, and
– gaining entry into new retail outlets.
• For the sales force, objectives include
– encouraging support of a new product or model,
– encouraging more prospecting, and
– stimulating off-season sales.
2) Selecting Consumer Promotion Tools:

• The promotion planner should take into account the


– type of market,
– sales promotion objectives,
– competitive conditions, and
– each tool’s cost-effectiveness.
• Samples , Coupons , Cash Refund Offers (Rebates),
Premiums (Gifts), Prizes (Contests), Free trials, Tie-
in Promotions & Point-of-Purchase (P-O-P) Displays
and Demonstrations
3) Selecting Trade Promotion Tools:
4) Selecting Business And Sales Force
Promotion Tools:
5) Developing The Program:
• In planning sales promotion programs, marketers are
increasingly blending several media into a total campaign
concept.
6) Implementing And Evaluating The
Program:
• Lead time is the time necessary to prepare the program prior
to launching it.
• Sell-in time begins with the promotional launch and ends
when approximately 95 percent of the deal products is in the
hands of consumers.
Manufacturers can evaluate the program using
• Sales data
• Consumer surveys
• Experiments
Personal Selling
Personal Selling:
• Face-to-face interaction with one or more prospective
purchasers for the purpose of making presentations,
answering questions, and procuring orders.

• Personal presentations by the firm’s sales force for


the purpose of engaging customers, making sales,
and building customer relationships.
Salesperson
• An individual who represents a company to customers
by performing one or more of the following activities:
prospecting, communicating, selling, servicing,
information gathering, and relationship building.
Sales Quota
• A standard that states the amount a salesperson
should sell and how sales should be divided among
the company’s products.
Role of the Sales Force
• Linking the Company with Its Customers
– The sales force serves as a critical link between a company
and its customers. In many cases, salespeople serve two
masters—the seller and the buyer.
• Coordinating Marketing and Sales
– the sales force and other marketing functions (marketing
planners, brand managers, marketing content managers,
and researchers) should work together closely to jointly
create value for customers
Types of Sales Representatives:
• Deliverer—delivers the product.
• Order taker—
– inside order taker (standing behind the counter) or
– outside order taker (calling on the supermarket manager).
• Missionary— Do not take orders, but builds goodwill or
educates the actual or potential user.
• Technician—A salesperson with a high level of technical
knowledge.
• Demand creator—relies on creative methods for selling
tangible products or intangibles.
• Solution vendor—expertise in solving a customer’s problem.
Designing the Sales Force:
1) Sales Force Objectives:
• Prospecting - Searching for prospects or leads
• Targeting - Deciding how to allocate their time among prospects
and customers
• Communicating - Communicating information about the
company’s products and services
• Selling - Approaching, presenting, answering questions,
overcoming objections, and closing sales
• Servicing - Providing various services to the customers —
consulting on problems, rendering technical assistance, arranging
finance
• Information gathering - Conducting market research and doing
intelligence work
• Allocating - Deciding which customers will get scarce products
during product shortages
2) Sales Force Strategies:
Marketing managers face several sales force strategy and
design questions.
• How should salespeople and their tasks be structured?
• How big should the sales force be?
• Should salespeople sell alone or work in teams with
other people in the company?
• Should they sell in the field, by phone, or using online
and social media?
3) Sales Force Structure:
• A company that sells many products to many
types of customers might need a product or
market structure.
(1) a strategic market sales force (composed of
technical, applications, and quality engineers
and service personnel) assigned to major
accounts;
(2) a geographic sales force calling on customers
in different territories;
(3) a distributor sales force for calling & coaching
distributors;
(4) (4) an inside sales force doing marketing and
taking orders via phone and online.
4) Sales Force Size:
• Companies use workload approach to establish
sales force size. This method has five steps:
1. Group customers into size classes according to
annual sales volume.
2. Establish desirable call frequencies (number of
calls on an account per year) for each customer class.
3. Multiply the number of accounts in each size class
by the corresponding call frequency to arrive at the
total workload for the country, in sales calls per year.
4. Determine the average number of calls a sales
representative can make per year.
5. Divide the total annual calls required by the average
annual calls made by a sales representative, to arrive
at the number of sales representatives needed.
Workload approach
Account clients Calls per account Total workload
type per year
A 1000 36 36000
B 2000 12 24000
Total 3000 60000

Average calls/sales rep/year = 1000

Total reps required = total workload / average sales calls


= 60,000/ 1000
= 60 sales reps required

Suppose the company estimates it has 1,000 A accounts and 2,000 B accounts.
A accounts require 36 calls a year, and B accounts require 12, so the company
needs a sales force that can make 60,000 sales calls (36,000 + 24,000) a year.
If the average full-time rep can make 1,000 calls a year, the company needs
60 reps.
5) Sales Force Compensation:
• Fixed amount - salary
• Variable amount - commissions, bonus, or profit
sharing,
• Expense allowances - costs of travel
• Benefits - paid vacations, sickness or accident benefits,
pensions, and health and life insurance
Managing the Sales Force
1) Recruiting and Selecting
Representatives
• One survey revealed that the top 25 percent of the sales
force brought in more than 52 percent of the sales.
• It’s a great waste to hire the wrong people.
• The average annual turnover rate of sales reps for all
industries is almost 20 percent.
• Sales force turnover leads to lost sales, the expense of
finding and training replacements, and often pressure
on existing salespeople to pick up the slack.
2) Training Sales Representatives
• New reps may spend a few weeks to several
months in training.
• The median training period is
– 28 weeks in industrial-products companies,
– 12 weeks in service companies,
– 4 weeks in consumer-products companies.
3) Supervising Sales Representatives

• Sales Reps (paid mostly on commission),


generally receive less supervision.
• Sales Reps (who are salaried), are likely to
receive substantial supervision.
4) Motivating Sales Representatives
Intrinsic versus Extrinsic Rewards:
• Salespeople are highly motivated by pay followed by
promotion, personal growth, and sense of
accomplishment.
• Least valued were liking and respect, security, and
recognition.

Sales Quotas:
• Compensation is often tied to degree of quota fulfillment.
5) Evaluating Sales Representatives
• sales reports.
• personal observation,
• salesperson self-reports,
• customer letters and complaints,
• customer surveys,
• conversations with other sales reps.
Steps in Effective Personal Selling:
1. Prospecting And Qualifying:
2. Pre-approach:
3. Presentation And Demonstration:
4. Overcoming Objections:
5. Closing the Sale:
6. Follow-Up And Maintenance:
1.Prospecting And Qualifying:
• The first step in selling is to identify and
qualify prospects.
• More companies are taking responsibility for
finding and qualifying leads so salespeople can
use their expensive time doing what they do
best: selling.
• IBM qualifies leads according to the BANT
acronym:
– Does the customer have the necessary budget,
– the authority to buy,
– a compelling need for the product or service, and
– a timeline for delivery that aligns with what is
possible?
2. Pre-approach:
• The salesperson needs to learn as much as possible
about the prospect company (what it needs, who
takes part in the purchase decision) and its buyers
(personal characteristics and buying styles).
• How is the purchasing process conducted at the
company? How is it structured?
• Another task is to choose the best contact approach

– a personal visit, phone call, e-mail, or letter.
3. Presentation And Demonstration:
• The salesperson tells the product “story” to the buyer,
using a features, advantages, benefits, and value (FABV)
approach.
• Features describe physical characteristics of a market
offering
• Advantages describe why the features give the customer
an edge.
• Benefits describe the economic, technical, service, and
social pluses delivered.
• Value describes the offering’s worth (often in monetary
4. Overcoming Objections:
• Customers typically pose objections.
• Psychological resistance includes resistance to
interference, preference for established supply sources
or brands, laziness, unwillingness to give up
something, unpleasant associations created by the sales
rep, predetermined ideas, dislike of making decisions,
and a neurotic attitude toward money.
• Logical resistance might be objections to the price,
delivery schedule, or product or company
characteristics.
• To handle these objections, the salesperson maintains a
positive approach, asks the buyer to clarify the
objection, questions in such a way that the buyer
answers his own objection.
5. Closing the Sale:
• Closing signs from the buyer include physical
actions, statements or comments, and questions.
• Reps can ask for the order, recapitulate the points of
agreement, offer to help write up the order, ask
whether the buyer wants A or B, get the buyer to
make minor choices such as color or size, or indicate
what the buyer will lose by not placing the order now.
• The salesperson might offer specific inducements to
close, such as an additional service, an extra quantity,
or a token gift.
6. Follow-Up And Maintenance:
• Follow-up and maintenance are necessary to ensure customer
satisfaction and repeat business.
• Immediately after closing, the salesperson should cement any
necessary details about delivery time, purchase terms, and
other matters important to the customer.
• He or she should schedule a follow-up call after delivery to
ensure proper installation, instruction, and servicing and to
detect any problems, assure the buyer of his or her interest,
and reduce any cognitive dissonance.
• The salesperson should develop a maintenance and growth
plan for the account.
Direct Marketing:
• Direct marketing is the use of consumer-direct
(CD) channels to reach and deliver goods and
services to customers without using marketing
middlemen.
Methods of Direct Marketing:
Direct marketers can use a number of channels to reach individual
prospects and customers:
• direct mail,

• catalog marketing,

• telemarketing,

• interactive TV,

• kiosks,

• Web sites, and

• mobile devices.
Benefits of Direct Marketing:
• Customize and personalize messages (Market
demassification).
• builds a continuous relationship with each customer.
• It is convenient.
• It saves time to introduce more products.
Direct Mail:
• Direct-mail marketing means sending an offer, announcement,
reminder, or other item to an individual consumer.
• Using highly selective mailing lists, direct marketers send out
millions of mail pieces each year—letters, flyers, and
multimedia DVD’s.
• Direct mail is a popular medium because it permits target
market selectivity, can be personalized, is flexible, and allows
early testing and response measurement.
Catalog Marketing:

• In catalog marketing, companies may send


full-line merchandise catalogs, specialty
consumer catalogs, and business catalogs,
usually in print form but also as DVDs or
online.
Telemarketing:
• Telemarketing is the use of the telephone and call centers to
attract prospects, sell to existing customers, and provide service
by taking orders and answering questions.
• It helps companies increase revenue, reduce selling costs, and
improve customer satisfaction.
Companies use call centers for
• inbound telemarketing—receiving calls from customers—and
• outbound telemarketing—initiating calls to prospects and
customers.
• Tele Sales – Taking orders through Tele calling.
• Tele Coverage – Calling customers to maintain good
relationships.
• Tele Prospecting – Identify the qualified Prospects.
• Customer Service – Answering customer Queries.
Public and Ethical Issues in Direct
Marketing
• • Irritation. Many people don’t like hard-sell direct marketing solicitations.
Firms have been popping up to help block unwanted junk mail.
• • Unfairness. Some direct marketers take advantage of impulsive or less
sophisticated buyers or prey on the vulnerable, especially the elderly.
• • Deception and fraud. Some direct marketers design mailers and write
copy intended to mislead or exaggerate product size, performance claims,
or the “retail price.” The Federal Trade Commission receives thousands of
complaints each year about fraudulent investment scams and phony
charities.
• • Invasion of privacy. It seems that almost every time consumers order
products by mail or telephone, apply for a credit card, or take out a
magazine subscription, their names, addresses, and purchasing behavior
may be added to several company databases. As Chapters 3 and 5
discussed, critics worry that marketers may know too much about
consumers’ lives and that they may use this knowledge to take unfair
advantage.
Public Relation / Publicity:
• Public relations (PR) includes a variety of
programs to promote or protect a company’s
image or individual products and handling or
heading off unfavorable rumors, stories, and
events.
• Companies use PR to build good relations with
consumers, investors, the media, and their
communities.
• Public relations is used to promote products,
people, places, ideas, activities, organizations,
and even nations.
Public Relation - functions:
• Press relations—Presenting news and information about the organization
in the most positive way.
• Product publicity or Sponsorship - publicizing specific products and
brands.
• Corporate communications—Promoting, understanding of the
organization through internal and external communications - Publishing
quarterly reports
• Lobbying—Building and maintaining relationships with legislators and
government officials to promote or defeat legislation and regulation
• Counseling—Advising management about public issues, and company
positions and image during good times and bad.
• Investor relations - Maintaining relationships with shareholders and
others in the financial community.
• Development-Working with donors or members of nonprofit
organizations to gain financial or volunteer support.
• Public affairs - Building and maintaining national or local community
relationships.
Marketing Public Relations (MPR):
MPR goes beyond simple publicity and plays an important role in
the following tasks:
• Launching new products.
• Repositioning a mature product.
• Building interest in a product category. Companies and trade
associations have used MPR to rebuild interest in declining
commodities such as egg and milk.
• Influencing specific target groups.
• Defending products that have encountered public
problems. - nestle maggi
• Building the corporate image
Major Decisions in Marketing PR

• Establishing Objectives
• Choosing Messages and Vehicles
• Implementing the Plan and
• Evaluating Results
Sponsorship or Events - Objectives
• 1. To identify with a particular target market —Customers can
be targeted geographically, demographically, psychographically,
or behaviorally according to events.
• 2. To increase salience of company or product name—
Sponsorship offers sustained exposure for a brand, a necessary
condition for reinforcing brand salience.
• 3. To create or reinforce key brand image associations—
Events themselves have associations that help to create or
reinforce brand associations.
Sponsorship or Events Objectives
• 4. To enhance corporate image—Sponsorship can improve
perceptions that the company is likable and prestigious.
• 5. To create experiences and evoke feelings—The feelings
engendered by an exciting or rewarding event may indirectly
link to the brand. Audi models featured prominently in the 2010
blockbuster Iron Man 2.
• 6. To express commitment to the community or on social
issues—Cause-related marketing sponsors nonprofit
organizations and charities.
Sponsorship or Events Objectives
• 7. To entertain key clients or reward key employees
—Many events include lavish hospitality tents and
other special services or activities only for sponsors
and their guests.
• 8. To permit merchandising or promotional
opportunities—Many marketers tie contests, in- store
merchandising, direct response, or other marketing
activities with an event.
Major Sponsorship Decisions

• Choosing the appropriate events,

• Designing the sponsorship program

• Measuring the effects of sponsorship:


Major Sponsorship Decisions
choosing the appropriate events,
• Because of the number of sponsorship opportunities and their
huge cost, many marketers are becoming more selective. The
event must meet the marketing objectives and communication
strategy defined for the brand. It must have sufficient
awareness, possess the desired image, and be able to create the
desired effects. The audience must match the target market and
make favorable attributions for the sponsor’s engagement. An
ideal event is also unique but not encumbered with many
sponsors, lends itself to ancillary marketing activities, and
reflects or enhances the sponsor’s brand or corporate image.
Major Sponsorship Decisions
Designing the sponsorship program:
• Many marketers believe the marketing program accompanying
• an event sponsorship ultimately determines its success. At
least two to three times the amount of the sponsorship
• expenditure should be spent on related marketing activities.
Major Sponsorship Decisions
Measuring the effects of sponsorship:
• Supply-side methods for measuring an event’s success assess
the media coverage, for example, the number of seconds the
brand is clearly visible on a television screen or the column
inches of press clippings that mention it.
• The demand-side method identifies the sponsorship’s effect
on consumers’ brand knowledge. Marketers can survey
spectators to measure their recall of the event and their
resulting attitudes and intentions toward the sponsor.

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