Business Marketing

Topic 9:
Promotional strategies
and processes
Marketing Communications

Marketing communications are the means by which

firms attempt to inform, persuade, and remind
consumers—directly or indirectly—about the products
and brands they sell.
Modes of Marketing Communications
1. Advertising is any paid form of non-personal
presentation and promotion of ideas, goods, or
services by an identified sponsor.
2. Sales promotion is any variety of short-term
incentives to encourage trial or purchase of a product
or service.
3. Public relations and publicity are a variety of
programs directed internally to employees of the
company or externally to consumers, other firms, the
government, and media
4. Direct marketing is the use of mail, telephone, fax,
e-mail, or face-to-face interaction, Internet to
communicate directly with or solicit response or
dialogue from specific customers and prospects.
Elements in the Communications Process
An Ideal Ad Campaign
• The right consumer is exposed to the message at the
right time and place
• The ad causes consumer to pay attention
• The ad reflects consumer’s level of understanding
and behaviors with product
• The ad correctly positions brand in terms of points-
of-difference and points-of-parity
• The ad motivates consumer to consider purchase of
the brand
• The ad creates strong brand associations
Select Communication Channels

Personal communications channels let two or

more persons communicate face-to-face or
person-to-audience through a phone, surface
mail, or e-mail.

Non-personal channels are communications

directed to more than one person and include
advertising, sales promotions, events and
experiences, and public relations.
Establish the Budget
• Affordable: The affordable method completely ignores the
role of promotion as an investment and the immediate
impact of promotion on sales volume.
• Percentage-of-sales: Some companies set communication
expenditures at a specified percentage of current or
anticipated sales or of the sales price.
• Competitive parity: Some companies set their
communication budget to achieve share-of-voice parity with
competitors
• Objective-and-task: The objective-and-task method calls
upon marketers to develop communication budgets by
defining specific objectives, determining the tasks that must
be performed to achieve these objectives, and estimating
the costs of performing them. The sum of these costs is the
proposed communication budget.
Factors in Settin Communications Mix

• Type of product market

• Buyer readiness stage

• Product life cycle stage

The Five M’s of Advertising
Developing an Advertising Program

Setting Objectives

Deciding on the Budget

Developing the Campaign

Deciding on Media

Making Measurement Plans

Advertising Objectives
Informative advertising aims to create brand awareness and
knowledge of new products or new features of existing
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.
Factors to Consider in Setting an Advertising Budget
1. Stage in the product life cycle. New products typically merit large
advertising budgets to build awareness and to gain consumer trial.
Established brands usually are supported with lower advertising
budgets, measured as a ratio to sales.
2. Market share and consumer base. High-market-share brands
usually require less advertising expenditure as a percentage of
sales to maintain share. To build share by increasing market size
requires larger expenditures.
3. Competition and clutter. In a market with a large number of
competitors and high advertising spending, a brand must advertise
more heavily to be heard. Even simple clutter from advertisements
not directly competitive to the brand creates a need for heavier
advertising.
4. Advertising frequency. The number of repetitions needed to put the
brand’s message across to consumers has an obvious impact on
the advertising budget.
5. Product substitutability. Brands in less-differentiated or commodity-
like product classes (soft drinks, banks, and airlines) require heavy
advertising to establish a unique image.
Viral Power of Advertising
Television
Advantages
• Reaches broad spectrum of
consumers
• Low cost per exposure
• Ability to demonstrate
product use
• Ability to portray image and
brand personality
Disadvantages
• Brief
• Clutter
• High cost of production
• High cost of placement
• Lack of attention by viewers
Print Ads
Advantages Disadvantages
• Detailed product • Passive medium
information • Clutter
• Ability to communicate • Unable to demonstrate
user imagery product use
• Flexibility
• Ability to segment
Variables in Media Selection
Reach is the number of different persons or households
exposed to a particular media schedule at least once during a
specified time period

Frequency is the number of times within the specified time

period that an average person or household is exposed to
the message

Impact is the exposure to the ad message. Exposure depends

upon Reach, Frequency, and Impact.

Exposure to the ad message. Exposure depends upon Reach,

Frequency, and Impact.
Choosing Among Major Media Types

• Target audience and media habits

• Product characteristics
• Message characteristics
• Cost
Major Media Types

• Newspapers • Outdoor
• Television • Yellow Pages
• Direct mail • Newsletters
• Radio • Brochures
• Magazines • Telephone
• Internet
Place Advertising
Measuring Sales Impact of Advertising
Share of Expenditures

Share of Voice

Share of Mind and Heart

Share of Market
Sales Promotion

Sales promotion consists of a collection of incentive tools,

mostly short term, designed to stimulate quicker or greater
purchase of particular products or services by consumers or
the trade.
Consumer-Directed Sales Promotion Tactics

• Samples • Premiums
• Coupons • Prizes
• Cash refund offers • Patronage rewards
• Price offs • Free trials
• Tie-in promotions
Trade-Directed Sales Promotion Tactics

• Price offs • Spiffs

• Allowances • Trade shows
• Free goods • Specialty advertising
• Sales contests
Why Sponsor Events?

• To identify with a particular target market or life style

• To increase brand awareness
• To create or reinforce consumer perceptions of key brand
image associations
• To enhance corporate image
• To create experiences and evoke feelings
• To express commitment to community
• To entertain key clients or reward employees
• To permit merchandising or promotional opportunities
Public Relations Functions

• Press relations
• Product publicity
• Corporate communications
• Lobbying
• Counseling
Major Tools in Marketing PR

• Publications
• Events
• Sponsorships
• News
• Speeches
• Public Service Activities
• Identity Media
Tutorial Questions
• What is the role of marketing communications?
• How do marketing communications work?
• What are the major steps in developing effective communications?
• What is the communications mix and how should it be set?
• What steps are required in developing an advertising program?
• How should sales promotion decisions be made?
• How can companies exploit the potential of public relations and
publicity?
END