Marketing Management MKT 600

MM BB AA

Promotion & Communication

Lecture Overview

• Introduction• Communications Theory

– Communication Process– Hierarchy of Response Models

• Communication Objectives• Designing a Message

– Choosing the right Channel– Scheduling – Budgeting

• Promotional Tools/Techniques– Persuasion Swing– Advertising– PR– Sales Promotion– Sponsorship– Personal Selling– Direct Marketing

Promotion Mix

INTRODUCTIONHaving the right product available at the right time and at the right price still may not

achieve a sale because the potential customer may not know of the offer. To be

successful companies need therefore to communicate their offer.

Since early days, individuals have used hand signals, sounds, symbolic drawing and

facial expressions for the purpose of communicating some form of message to one

another.

Today the exchange of information takes place through sophisticated media, such as,

interconnecting computers, telephones, text, TV and radio etc. An efficient network of

communication is essential for successful promotional activity. It enables the company

not only to communicate with its customers but also hold up an image with its markets at

large. Such an image will help others to form perceptions and beliefs about what the

company stands for and will influence their attitudes and future behaviour in dealing with

it.

For marketing purposes, communication of products and services contributes to the

persuasion process to encourage the customer to avail themselves of whatever is on

offer.

COMMUNICATIONS THEORYFor organisations to be successful they need to communicate their offer to their target

markets (audience). The process entails sending messages through various channels or

media to create awareness and understanding of why they might wish to buy a particular

product. The process itself is highlighted below;

Communication Process

SenderReceiver

ResponseAll communication requires a response of some sort. Unfortunately, the response

is not always what we expect.

Receiver

Organisations are the senders in the communications process and consumers are the receivers. A sender will put information in a form that a receiver will understand. This might involve a visual, verbal or written message to transmit the ideas. This process is called encoding. The sender will choose a particular medium or channel to carry the message to the receiver (eg television, radio, newspapers etc). The consumer interprets the message through a process called decoding. If the consumer interprets the message as required, it should impact on the receiver and lead to a response indicated by the feedback as shown over.

EncodeSender SenderDecode

Feedback

Message

Message

Channel

Noise

Unfortunately, there is no guarantee the receiver will receive the full message or even understand it fully. This is because of the of interference with the flow of the information which is called noise.

Noise acts as a barrier to the flow and understanding of the information and can include; other competing communication drowning out your information, or it might be poor presentation of the message in terms of the words, visuals or even media chosen to carry the message.

To improve the chances of a message getting through it may be necessary to change the format of the message and repeat the message several times rather than rely on one transmission

Hierarchy of Response Models

These models attempt to predict the sequence of mental stages that the consumer passes through on the way to purchase. As you pass through each stage your propensity to buy increases.

Behavioural Aida Adoption DagmarStage

Unawareness Information Stage

Cognitive Attention Awareness Awareness Knowledge(awareness)

Affective Interest Interest ComprehensionLiking andBeliefs Desire Evaluation Conviction

Trial

Conative Action Adoption Action Persuasion Behaviour StageTendency toBuy or try

COMMUNICATION OBJECTIVESOnce the target audience has been defined, marketing communicators must decide; what

is our objective? What response is sought? The objectives will in part be based around

the buyer’s readiness stages previously discussed.

Objective

Awareness - to build awareness for a new product may begin with simple messages that repeat the company name or product name.

Knowledge - to increase knowledge about the product or products on offer. Liking - this presumes there is some knowledge and awareness for the

product. This is about creating interest for your product. Preference - building customer preference by promoting the products quality,

value etc. Conviction - getting the customer to trial the product/taste it. Purchase- finally getting the customer to buy the product.

NB: Communication on its own cannot create positive feelings and purchase for a

product. It requires the support of the whole marketing mix to do this. It can, however,

speed up the demise of a product.

DESIGNING A MESSAGEIdeally a message should grab attention, hold interest, arouse desire and obtain action

(purchase), ie AIDA model.

In putting a message together, the marketer must decide:

What to say? – message content How to say it? – message structure and format

Message Content

Content relates to an appeal or theme that will produce a desired response.

Rational Appeal - emphasises functional benefits, ie better performance, higher quality, economy eg Volvo crumple zones.

Emotional - stirs up negative or positive emotions that can motivate purchase. This includes; fear, guilt and shame appeals. (Crest, ‘only toothpaste to protect teeth from cavities’) but also love, humour, pride and promise of success appeals. (Haagen Dazs – pleasure appeal ie ‘Now it’s on everyone’s lips’)

Moral Appeal - Directed at an audience’s sense of what is right and proper. Often used by charities and voluntary organisations.

Message Structure

Do not put too much detail into an advertisement. Keep your key messages to 1 maybe 2.

Don’t dilute the message. Decide on a headline, illustration and colour to attract attention. Use

different sounds to project message on radio or TV.

Choosing the right Channel

Important to choose the right channel to reach the target audience (eg young people tend

to frequent the cinema, fashion conscious women read specialist magazines,

professional people read trade/professional magazines/broadsheet newspapers,

commuters listen to the radio going to work.

Scheduling

Schedules are designed to achieve the optimum number of viewing by members of the target audience. The measure is of opportunities to see (or hear) O.T.S.

Learning theory suggests the best learning is cognitive – individuals restructure their cognition with regard to given problem situations and this restructuring leads to greater insight – simply put, the more times and ad is seen, the greater the reinforcement – a form of parrot fashion learning.

Question – Should an ad campaign concentrate ads over a short period (burst scheduling) or over a longer period (drip scheduling)?

Budgeting

All campaigns need to be costed to assess the effectiveness in reaching its target audience (eg TV is very expensive, but can be offered on a regional as well as national basis. It may become even more competitive with digital TV.) £100K budget would be insufficient for TV advertising, but £1M would allow the use of TV nationally.

John Wanamaker, an American department store manager once said,' I know half my advertising is wasted, but I don’t know which half!’

Promotion spending in some industries is highly significant, eg cosmetic industry spending is 20-30% of sales while in others, industrial machinery may be less than 5% of sales.

Budget Methods Used

Affordable Method – What the company can afford. Problem with this method is it ignores

the effect of promotion on sales.

Percentage of Sales Method – (ie 5% of sales revenue will be budgeted). This method is

simple to use and makes managers think about the relationship between promotion and

selling.

Problems relate to: It views sales as the cause of promotion, rather than opportunities It fails to consider spending higher or lower levels of spending Does not explain what percentage level is appropriate

Competitive Parity – Setting budget to match competitors. This is reasonable in way it

represents the collective wisdom of the industry. But why should the competitor know best?

Objective Methods – Sets budget based on what it wants to achieve. Good for making

managers define their objectives, but problems exist because it is difficult to implement.

PROMOTIONAL TOOLS/TECHNIQUES

The promotional mix comprises all the marketing and communication tools used to achieve

the promotional objectives. The diagram below shows a complete range of tools that can be

used to influence a customer or potential customer.

Promotional influences on the customer

The Customer

Sponsorship

Sal

es p

rom

otio

n

Word of m

outh

BrandingPersonal selling

Advertising

Public relations

PackagingC

orporate image

Internal marketing

Exhibitions

Direct marketing

Merchandising

The influence the different tools have on the consumer s are indicated on the Persuasion Swing below –

Attention Interest Desire Action

Advertising

P.R.

Sponsorship

Sales promotion

Selling

Persuasion Swing

Advertising

Definition: ‘Any paid form of non-personal presentation and promotion of ideas, goods

or services by an identified sponsor.’

Objectives – To create awareness, inform about a feature or benefit, remind, reassure,

create an image and sometimes to encourage trial of support a sale.

Copy – Copy lines are words of an advertisement that are crucial to its understanding and

impact on its target audience. Agencies employ copywriters to develop effective copy lines.

3 types of copywriter – apprentice, journeyman and master. Apprentice attends award dinners Journeyman receives the awards Master sends regrets from Bahamas – they are too busy to attend.

Media

Broadcasting - TV, radio, cinema

Print - Magazines, newspapers

Direct Mail - House to house drops, postal service, internet

Outdoor - Posters, hoardings, advertising on buses, trains, taxis, as well as new signs and electronic screens.

Public Relations

Definition: Building good relations with the company’s various publics by obtaining

favourable publicity, building a good corporate image and handling favourable stories

and events.

The role of PR is to create and maintain goodwill and mutual understanding between the

company (or person) and its publics. It is different from advertising, in that, it is not paid for

directly, and it is focused more on behavioural change.

Opinion Leaders Community Potential Employees

Consumers Public Employees

Distributors Money Markets Suppliers

Change Attitudes

From: Negative to Positive

Hostility to Sympathy

Prejudice to Acceptance

Apathy to Interest

Ignorance to Knowledge

Media Relations - Maintain positive contact with journalist – press releases, articles.

Lobbying - Seeking to influence people in authority in order to secure support and achieve a

desired action (political lobbying NW Tourist Board).

Crisis Management - Involves using PR operations to handle any problem that may arise.

Corporate Identity Programmes – Design of Logos

Literature

Corporate Livery

Stationery

Annual Reports

Web site

Special Events – Conferences

Community Programmes

Sponsorship

Internal Newsletter/House Magazines

Sales Promotion

Definition: Short term incentives to encourage the purchase or sale of a product or service.

Sales promotion is clearly geared towards the persuasion stage of the adoption/process. In seeking customer action buy NOW rather than later.

Objectives - To achieve awareness and interest, but moreover, desire.To get customers to switch their buyingTo buy more (ie 3 for the price of 2)To smooth out seasonal dips in demand

Sales Promotional Tools - Samples – trial offersCoupons – saves off future purchasesCash refund offersPrice packs (multi-buys)Premium offersPrice reduction – 20% offPatronage rewards – pointsCompetitionsTailor made – charity donation, stock up ahead of

promotion, test drive.

Activity – take 15 mins to consider how you would use sales promotion to achieve each of the tailor-made examples above

Sponsorship

Definition: Sponsorship is the provision of resources to build a relationship of mutual

benefit.

True sponsorship is expressed in the phrase ‘enlightened self interest!’

A cause is supported with cash in return for satisfactory specific corporate and PR marketing

objectives.

Type of Sponsorship Example

Personality Individual sports people sponsoring kit manufacturer

Bodies Sports teams play with sponsored name on kit

Titles Nationwide Football League

Events Cadbury sponsor Christmas shows in UK theatres. Martell sponsors the Grand National

Tournaments ATP tennis sponsored by Mercedes

Happenings Budweiser sponsor the Kick Off in American Football

Creations Pizza Hut promised every spectator at the Pittsburgh Pirates Baseball game a free soda/pizza if a spectator chosen at

random could catch 3 popping balls. All 3 were caught and 33798 people shared a pizza to the value of £150,000. international headlines more than justified the cost.

Personal Selling

Definition: the presentation of products and associated persuasive communications to potential clients, employed by the supplying organisation.

Different Types

Order taker - shop assistant/sales order office clerkDeliverer - van driverMissionary - builds goodwill, creates ideas and gains specifications in

medical/architectural type markets.Technician - provides technical advice and support for major purchase

decisions – technical consultants (ie computers/telecommunications)

Demand Creator - Merchandiser/seller.

Key objectives/Sales tasks

Prospecting - looking for sales leadsCommunicating - providing informationServicing - providing serviceInformation gathering - market intelligenceAllocating - allocating scarce resourcesSelling - getting the order

Sales Approach

Product Knowledge - know your product features and benefits

Opening - act professionally – gain interest

Establish needs - re-establish what customer wants, ie ask questions

Presentation - a review of what you can offer to meet their needs

Objection handling - chance to review customer needs and reinforce why your product/service is superior

Closing - asking for the order/and follow up

Follow up - checking to make sure customer received the product/service they wanted-chance to get another order.

Negotiations

Definition: Conferring with another with a view to compromise. Negotiation as with

selling is the only promotional vehicle that truly offers 2 way communication

between the seller and the buyer.

Advantages and Disadvantages

Advantages Disadvantages

High level of customer attention Expensive

Can customise message Difficult to interact with more than one

Immediate feedback buyer at a time.

Lots of technical detail can be explained Time consuming

Can demonstrate product

Can develop long term relations

Direct Marketing

Definition: ‘the planned recording, analysis and tracking of customer behaviour to

develop relational marketing strategies.’

Components

Direct Mail - Main medium direct response advertising good for personalising messages, testing messages and is not as visible to competitors as is advertising. The main problem is direct mail does not allow for sound or movement.

Telemarketing - Used a lot with financial services as link ups with direct mail campaigns. Good for immediate 2 way communications. Quick

and accurate, flexible tool. Good for building and cleaning data and bases and for;

Market evaluation and test marketing

Dealer support

Traffic generator

Account servicing

Customer care and loyalty building

The Internet

Enhances customer service and promotes marketing relationships. Can be used for direct

sales or for directing the viewer to some other media.

Can be interactive in gaining further information about the customer.

Rules to consider –

Internet ads need to seize viewers attention Long download times will encourage the viewer to switch Selling must offer price savings All must cross promote sites

Catalogue Marketing

On-line Marketing – with the explosion of PCs and the internet at home this type of service

offers on line information and marketing services free of charge for many customers.

Commercial one line services – are by subscription. The best known are America On Line,

CompuServe and Prodigy who have 12 million subscribers.