The Marketing Mix

Week 8 Chapter 10: Promotion

© Jonathan Groucutt 2006 Foundations of Marketing 1

 Learning Outcomes

• Explain and critically evaluate the various

communication models.
• Critically evaluate the different types of promotional
activities organisations can use
• Discuss the different models used in persuading a
consumer to purchase a product or service.
• Evaluate the concept of integrated marketing
communications.
• Understand the elements of pricing as it
relates to the marketing mix

© Jonathan Groucutt 2006 Foundations of Marketing 2

 4 key Promotional Objectives

Creating a primary demand or market – especially when introducing

new product or creating new market

Creating brand awareness – tactical re features & benefits especially

in saturated markets where risk of new entrants is high & competition
fierce

Enhancing attitudes and influencing intentions – seeking a positive

view to create the right attitude. Psychologically linking customers
needs, wants and desires to how the product will benefit the customer

Facilitating purchase – making it easy to purchase. The more intense

the promotion the higher the risk of failing to meets customers
expectations

The promotional objectives must link effectively & efficiently

with the marketing mix elements to achieve lifecycle equity & brand
awareness. Adapted from Groucott, J
© Jonathan Groucutt 2006 Foundations of Marketing 3
 Communication Model (after Schramm, 1955)

Field of experience Field of experience

Sender Encoder Signal Decoder Receiver

Noise

 
Schramm believed that the communication only occurs when
the Field of experience of the sender and receiver overlaps,
however we communicate with people with little or nor
equivalent field of experience. Communicating knowledge
which can be easily understood is critical to the process of
promotion as a marketing tool.
© Jonathan Groucutt 2006 Foundations of Marketing 4
 Communication Feedback

• Communication feedback provides

• A discussion, comment and analysis of the issue(s)
being communicated.
• A mechanism for clarification of points and issues –
e.g. focus groups.
• A critical response to the message, which could be
translated, e.g into a boycott of a product or service.
• A positive response to the message, e.g increase in
purchases

© Jonathan Groucutt 2006 Foundations of Marketing 5

 Communication Noise:
elements which lead to distortion of the
communication message
This can be described as the interruptions or distortions that influence
the communications process or understanding of the message. Noise
can be:

Physical does the train block your view?

Semantic words linked to culture – a risky business!
Competitive often unethical use of tactics by one
company to distort how customers interpret messages
from other companies
Channel
overload world cluttered by communication signals!

© Jonathan Groucutt 2006 Foundations of Marketing 6

 Promotional Strategy & Tactics

• Advertising
• Direct marketing Promotional strategies and
• tactics can be stand-alone
Sales promotion -
tactics or part of an
• Sponsorship integrated strategy. The
• Product placement decision of which to use
• Merchandising must be based on how
• Public relations best to use the tactic or
• Word of mouth tactics to achieve the
promotional objectives
• Exhibitions
Advertising is not a new concept –
consider cave drawings!
© Jonathan Groucutt 2006 Foundations of Marketing 7
 Advertising
3 basic functions:
Inform
Persuade
Sell Advertising can be described
as:

‘A paid for communication vehicle

that is intended to inform,
influence and/or persuade one or
more individuals (to take action).’

© 2006 Jonathan Groucutt

© Jonathan Groucutt 2006 Foundations of Marketing 8

 AIDA Model (after Lewis 1898)
Sequencing models known
as the Hierarchy of Effects
(Barry 1987) have been
developed over the years.

Early Development - 1898

Modern Development - 1961
Challenge & Defence Phase
- 1973

© Jonathan Groucutt 2006 Foundations of Marketing 9

 Types of Advertising Primary
stimulate demand

Selective product or
Selective service
focus on single brand with
no reference to corporate
identity
         Product or service range
Range highlights the features and
benefits

Institutional
Promoting Corporate
Primary Identity, Image and Values
© Jonathan Groucutt 2006 Foundations of Marketing 10
 Types of Advertising Media
• Print
– Daily newspapers • Television
– Local and regional • Cinema
newspapers • Radio
– Consumer • Outdoor billboard
magazines • Ambient
– Trade and • Internet - Online
professional
magazines
– Customer magazines

© Jonathan Groucutt 2006 Foundations of Marketing 11

 Outdoor or Billboard Advertising

• Usually strategically located

near high-density areas. Thus
high visibility.

• Can be static or moving –

changing from one
advertisement to another.

• Can incorporate lighting and

effects.

© 2006 Jonathan Groucutt • Can vary in size.

• Can be restricted by local
government – location, size and
subject.
© Jonathan Groucutt 2006 Foundations of Marketing 12
 Celebrity endorsements
Using a celebrity as a
‘Brand Ambassador’
•Clarity needed of what
own brand is and which
characteristics the
celebrity stands for
•Synergies need to be
achieved
David Beckham has deals with:
Adidas,Gillette, Got Milk?, Marks &
•Which characteristics is
Spencer, Pepsi, Snickers, TBC the celebrity going to
Cosmetics,Vodafone advertise?

© Jonathan Groucutt 2006 Foundations of Marketing 13

 Ambient Media
Aerial - e.g. airships, balloons

Giveaway cards – e.g featuring an event, product or service

Maps – e.g. tourist maps carry adverts for local products & services

Taxis – e.g exterior and interior advertisements

Tickets – e.g cinema ticket with soft drink advert on the reverse

Trolleys – e.g airport, supermarket & train trolleys carry adverts

Washrooms – e.g one of the fastest growing forms of ambient advertising

Others – carrier bags, pavements, rubbish bins, lamp posts, petrol pumps,
fast-food cartons, etc.
But beware Guerilla fly-posting!
Sony & BMG both engaged in fly-posting in 2004 saving an estimated total
of £8m in advertising costs by using unauthorised poster sites – ASBOS!
© Jonathan Groucutt 2006 Foundations of Marketing 14
 Online Concerns
Banner
Internet sales • Credit card fraud Pop - up
by UK
Button • Cloning of sites
businesses • Data protection
rose to • Quality and delivery of goods
Button

Skyscraper
£163bn in purchased
2007 (Office • Trust in suppliers
of National
• Spamming – (US 9 million per month
Statistics
2003)
SO • Viruses – worms and Trojan horses
• Hackers
what’s the • Pop-ups
problem? • Failure of computing networks

© Jonathan Groucutt 2006 Foundations of Marketing

Banner 15
             Shock Advertising
(shockvertising)

“The inclusion of frightening, visceral, offensive,

taboo an emotion-provoking imagery and words to
promote a product, service, concept or idea.”
(Groucott, J)

BENEFIT: Can be used to cut through the

communication clutter.
DANGER: But society can become immune to
‘issues’ and offensive media advertising.
Or Society can raise complaints against
the advertisers

© Jonathan Groucutt 2006 Foundations of Marketing 16

 Direct Marketing

• Tapp (1998) suggest that:

‘Direct marketing focuses on using a
database to communicate (and sometimes
distribute) directly to customers so as to
attract a direct response.’
• An example of ‘distribution’ cited above is
online airline ‘tickets’.

© Jonathan Groucutt 2006 Foundations of Marketing 17

 Advantages of Direct Marketing

• Organizations have the opportunity to

track single and/or segmented groups
of customers via their database
• Opportunity for a ‘dialogue’
• Opportunity for enhanced
customization

© Jonathan Groucutt 2006 Foundations of Marketing 18

 Direct Marketing Techniques
• Door drops (door-to- • Direct mail
door distribution) – Physical mail
• Door-to- door selling – email
• Inserts • Telemarketing
– Newspapers – Outbound
– Magazines – Inbound
– Bills/invoices
– Bank/credit card
statements

© Jonathan Groucutt 2006 Foundations of Marketing 19

 Word of Mouth =
Viral or contagion Marketing
‘…people like to share their experiences with one another…..
and when those are favourable, the recommendations can
snowball, resulting in runaway success…..[this can be dubbed]
self-generating demand.’
Dye, R. (2000) The buzz on buzz. Harvard Business Review, Vol 78 No 6. pp:139 – 148.

• ‘…these viral ambassadors can be valuable, low-cost avenues

for building existing relationships, recruiting new customers and
keeping old customers happy for life’

Blackshaw, P. (2001) Viral consumers. Executive Excellence. July Vol 18 No 7. p: 20.

© Jonathan Groucutt 2006 Foundations of Marketing 20

 Product Placement

• This is where a product or service appears

within a television programme or movie
• It is also known as:
• Alternative Advertising
• Entertaining Marketing
• Product or Brand Integration

© Jonathan Groucutt 2006 Foundations of Marketing 21

 Product Placement Objectives
• Overcome Noise –
attempts to break through
the clutter
• Local and global reach
• Cost-effectiveness and
frequency
• Helps to build a brand’s
awareness – exposure for
new brands. Reinforces
current brands
© Jonathan Groucutt 2006 Foundations of Marketing
• Positive association –
‘think of wearing the same
Omega watch as James
Bond?’
• Helps to build brand
loyalty – develops from
the positive association.
Buy the watch and
become loyal to the brand.
22
 James Bond & Product Placement
• Goldeneye (1995) BMW replaced Aston Martin. BMW introduced
Z-3 two-seat convertible. It was launched 3 months after the
movie’s release and was supported by a series of James Bond-
themed television ads in the US. The result:
- 12 months worth of orders
- Through the movie the Z-3 achieved global recognition

• Tomorrow Never Dies (1997) –£20 million of product placement

included:
• BMW – cars and bikes
• Ericsson mobile phones
• Avis care rental
• Omega watches
• Bollinger Champagne
• Value to BMW estimated at over US$100 million
© Jonathan Groucutt 2006 Foundations of Marketing 23
 A New Version of Product Placement –
Product Parody
• Companies are increasingly
working with TV and movie
• Examples:
companies on brand parodies. It Shrek and Shrek 2:
is believed that this might be a
• Farbucks for Starbucks™
way to find a niche within the
growing product placement • VERSARCHERY for
market. Versace™ (clothes)
• Basking Robinhood for
• The key is that the consumer can Baskin Robbins™ (ice
recognize the the brand that is cream)
being parodied so that they can
• Tower of London Records
buy into the brand.
for Tower Records™

© Jonathan Groucutt 2006 Foundations of Marketing 24

 Sponsorship
‘Sponsorship is a
contribution to an
activity by a commercial
organization in cash, or
in kind, with the
expectation of achieving
corporate and
marketing objectives.’
© 2006 Jonathan Groucutt Berrett, T.(1993) The sponsorship of amateur
sport – government, national sport organization
and corporate perspectives. Society and
Leisure, 16. pp: 323 – 346.

© Jonathan Groucutt 2006 Foundations of Marketing 25

 Potential Benefits of Sponsorship

• The value of the association itself – for

example, arts festivals or a
charity.Thus can enhance reputations.

• Exposure – can be global. Consider,

for example, the global audience for
Formula 1 racing, football matches, etc

© Jonathan Groucutt 2006 Foundations of Marketing 26

 Growth of Sponsorship
• Different from traditional advertising and marketing.
Can be used to breakthrough the clutter of traditional
techniques.
• Creation of favourable association. The physical and
emotional link with the sponsored organization.
• Overcomes cultural barriers. Consider Sport, Arts
and Music.
• Wide and multiple target audience appeal.

• Can overcome legal barriers – For example,

Alcopops!

© Jonathan Groucutt 2006 Foundations of Marketing 27

 SALES PROMOTION can be used to:
• Promote a new product or service.
• Reinvigorate interest in an established product or service.
• Discount a product or service due to, for example, overstocking or
to increase off-peak sales.

Types of Sales promotion

• Free samples • Buy One Get One Free
• Money-off coupons • Special offer bins or shelves
• Extra value offers • Bundling
– More product for the • Privilege points
same price
– Addition products added
to the pack
© Jonathan Groucutt 2006 Foundations of Marketing 28
 Exhibitions & their value
• Can be B2B or B2C
• Can be large events
• Can be niche markets
• Attendees are receptive to what exhibitors have to
market
• Cost of lead generation is relatively low

• Target audience
VALUE • Quality audience
• Time spent
• Launch potential
© Jonathan Groucutt 2006 Foundations of Marketing 29
 What is PR?

The Chartered Institute of Public Relations (UK) definition ‘………the

planned and sustained effort to establish and maintain goodwill and
mutual understanding between the organization and its publics.’

Image
Reputation
Information
Communication

© Jonathan Groucutt 2006 Foundations of Marketing 30

 Public Relation’s Publics…
• Direct • Indirect
– They have a direct – Individuals or
relationship with the organizations that
organization or
may be influenced by
individual
•
the actions of an
Employees
• Customers organization or
• Suppliers individual. For
• Competitors example, proposed
• Local community regulations.
• The media

© Jonathan Groucutt 2006 Foundations of Marketing 31

 Scope of Public Relations
• Corporate relations • Investor relations
• Community relations • Market or supply
chain relations
• Customer relations
• Media relations
• Employee relations
• New product and
• Industrial relations service launches
• Government • Promotion
relations • Public affairs
• Issues management • Publicity

© Jonathan Groucutt 2006 Foundations of Marketing 32

 Merchandising & Examples
• The creation of a range of products that reflect an organization’s
brand. These are in turn marketing to raise the profile of the
original brand.

• A university – this can be • A City – reflects the city’s

everything from pens to
umbrellas.
• A movie – consider the Star
Wars™ sagas. Everything
from the book – the making
of – to toys not only
promotes the movie but is
also revenue generating.
past and present.
• An airline – from postcards
of planes to videos.
• Food manufacturers –
Heinz™ produce a range
from watches to footballs. All
with the distinctive logo.

© Jonathan Groucutt 2006 Foundations of Marketing 33

 Further Readings
Dye, R. (2000) The buzz on buzz. Harvard Business
Review, Vol 78 No 6. pp:139 – 148.
L. Percy & R. Elliott (2005) Strategic Advertising
Management, 2nd ed. , Oxford University press.
Vaughn, R. (1980) How advertising works: a planning
model. Journal of Advertising Research 20 (October)
pp: 27-33.

•Chartered Institute of Public Relations: www.cipr.co.uk

•Public Relations Society of America: www.prsa.org

© Jonathan Groucutt 2006 Foundations of Marketing 34

 Next Session

• Pricing Tactics (ch.11)

• People (ch.12)
© 2006 Jonathan Groucutt

© 2006 Jonathan Groucutt

© Jonathan Groucutt 2006 Foundations of Marketing 35