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Session 13 Promotion

Marketing Communications

The means by which firms attempt to inform, persuade, and remind consumers, directly or indirectly, about the products and brands they sell.

Marketing Communication
• Communicate with customer:
– Product – Price – Availability – Organization

• The marketing communication system
– Word of mouth – Promotion mix

The Promotion Mix
Advertising Advertising
Any Paid Form of Nonpersonal Any Paid Form of Nonpersonal Presentation by an Identified Presentation by an Identified Sponsor. Sponsor.

Personal Selling Personal Selling Sales Promotion Public Relations Direct Marketing

Personal Presentations by a Firm’s Sales Force.

Short-term Incentives to Encourage Sales. Building Good Relations with Various Publics by Obtaining Favorable Unpaid Publicity. Direct Communications With Individuals to Obtain an Immediate Response.

Figure15.2 Elements in the Communications Process

Steps in Developing Effective Communications
Identify target audience Determine objectives Design messages Select channels Establish budget Decide on promotion mix Manage IMC

Communications Objectives
• Based on Buyer-readiness stages, PM pp.463-464

Category Need Brand Awareness Brand Attitude Purchase Intention

Design Message - Creative Strategy
• Rational and emotional appeals • Positive and negative appeals
– – – – – – – Fear Guilt Shame Humor Love Pride Joy

Select media
• Personal communication channels
– Word of mouth – Opinion leaders

• Non-personal communication channels
– Print – Broadcast – Display

• Integration

Setting the Total Promotion Budget
One of the Hardest Marketing Decisions Facing a Company is How Much to Spend on Promotion.
Affordable
Based on What the Company Can Afford Based on a Certain Percentage Based on a Certain Percentage of Current or Forecasted Sales of Current or Forecasted Sales

Percentage of Sales Percentage of Sales

Objective-and-Task Objective-and-Task

Based on Determining Based on the Competitor’s Based on Determining Based on the Competitor’s Objectives & Tasks, Then Promotion Budget Objectives & Tasks, Then Promotion Budget Estimating Costs Estimating Costs

Competitive-Parity Competitive-Parity

Setting the Promotion Mix
Advertising Advertising Personal Personal Selling Selling Sales Sales Promotion Promotion Public Public Relations Relations Direct Direct Marketing Marketing
Reach Many Buyers, Repeat Reach Many Buyers, Repeat Message Many Times, Impersonal, Message Many Times, Impersonal, Expensive Expensive Personal Interaction, Relationship Personal Interaction, Relationship Building, Most Expensive Promo Building, Most Expensive Promo Tool Tool Wide Assortment of Tools, Wide Assortment of Tools, Rewards Quick Response, Efforts Rewards Quick Response, Efforts Short-Lived Short-Lived Very Believable, Dramatize a Very Believable, Dramatize a Company or Product, Company or Product, Underutilized Underutilized Nonpublic, Immediate, Nonpublic, Immediate, Customized, Interactive Customized, Interactive

Promotion Mix Strategies
Type of ProductMarket Buyer Readiness Product Life-Cycle Stage

Strategy that Calls for Spending A Lot on Advertising and Consumer Promotion to Build Up (Pull) Consumer

Strategy that Calls for Using the Salesforce and Trade Promotion to Push the Product Through the Channels.

The Need for Integrated Marketing Communications
With Integrated Marketing Communications (IMC), the Company Carefully Integrates and Coordinates Its Many Communications Channels to Deliver a Clear, Consistent, and Compelling Message About the Organization and Its Product or Service.

Communication Platforms
Advertising • Print and broadcast ads • Packaging inserts • Motion pictures • Brochures and booklets • Posters • Billboards • POP displays • Logos • Videotapes Sales Promotion • Contests, games, sweepstakes • Premiums • Sampling • Trade shows, exhibits • Coupons • Rebates • Entertainment • Continuity programs

Communication Platforms
Events/ Experiences • Sports • Entertainment • Festivals • Arts • Causes • Factory tours • Company museums • Street activities Public Relations • Press kits • Speeches • Seminars • Annual reports • Charitable donations • Publications • Community relations • Lobbying

Communication Platforms
Personal Selling • Sales presentations • Sales meetings • Incentive programs • Samples • Fairs and trade shows Direct Marketing • Catalogs • Mailings • Telemarketing • Electronic shopping • TV shopping • Fax mail • E-mail • Voice mail

Message Source
Celebrity Characteristics
– Expertise – Trustworthiness – Likeability

Personal Communications Channels

Advocate channels Expert channels Social channels

Nonpersonal Communication Channels
Media Sales Promotion Events and Experiences Public Relations

Discussion
Take an example of the ads/commercials you have recently seen. Discuss the good, the bad and the possible improvement of the selected ads.

Advertising

Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

Developing & Managing an Advertising Program – 5 Ms
Mission: What are the advertising • • • • objectives? Money: How much can be spent? Message: What message should be sent? Media: What media should be used? Measurement: How should the result be evaluated?

Advertising Objectives
Specific Communication Task Accomplished with a Specific Target Audience During a Specific Period of Time

Informative Advertising
Build Primary Demand

Persuasive Advertising
Build Selective Demand

Comparison Advertising
Compares One Brand to Another

Reminder Advertising
Keeps Consumers Thinking About a Product.

Setting the Advertising Budget
• Advertising Budget Methods
– – – – – – – – – Affordable, Percentage of Sales, Competitive-Parity Objective-and-Task Product Differentiation Stage in the Product Life Cycle Market Share Advertising Frequency Competition and Clutter

• Factors in Setting the Advertising Budget

Creating the Advertising Message
Plan a Message Strategy
General Message to Be Communicated to Customers

Develop a Message
Focus on Customer Benefits

Creative Concept “Big Idea”
Visualization or Phrase Combination of Both

Advertising Appeals
Rational Emotional Competitive (Meaningful, Believable, Distinctive)

Selecting Advertising Media
Step 1. Decide on Reach, Frequency, and Impact Step 2. Choosing Among Major Media Types
Media Habits of Target Consumers Nature of the Product Type of Message Cost

Specific Media Within a Given Type, i.e. Magazines. Must Balance Media Cost Against Media Factors:
Audience Quality & Attention, Editorial Quality

Step 3. Selecting Specific Media Vehicles

Scheduling of Advertising Over the Course of a Year Pattern of Ads: Continuity or Pulsing

Step 4. Deciding on Media Timing

Evaluating Advertising Effectiveness
• Communication Effect Research
– Consumer feedback method – Portfolio tests – Laboratory tests

• Sales-Effect Research

Creative Brief
• • • • • Positioning statement Key message Target market Objectives Key brand benefits • • • • • Brand promise Evidence of promise Media Background Creative considerations

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 • Detailed product information • Ability to communicate user imagery • Flexibility • Ability to segment Disadvantages • Passive medium • Clutter • Unable to demonstrate product use

Major Media Types
• • • • • Newspapers Television Direct mail Radio Magazines • • • • • • Outdoor Yellow pages Newsletters Brochures Telephone Internet

Place Advertising
• • • • Billboards Public spaces Product placement Point-of-purchase

Sales Promotion

Collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade.

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

Trade-directed • Price offs • Allowances • Free goods • Sales contests • Spiffs • Trade shows • Specialty advertising

Major Consumer Sales Promotion Tools
Sample Sample Coupons Coupons Cash Refunds Cash Refunds Price Packs Price Packs Premiums Premiums Advertising Advertising Specialties Specialties
Trial amount of a product Trial amount of a product Savings when purchasing specified Savings when purchasing specified products products Refund of part of the purchase price Refund of part of the purchase price Reduced prices marked on the label Reduced prices marked on the label or package or package Goods offered free or low cost as an Goods offered free or low cost as an incentive to buy a product incentive to buy a product Articles imprinted with an advertiser’s Articles imprinted with an advertiser’s name given as gifts name given as gifts

Major Consumer Sales Promotion Tools
Patronage Rewards Patronage Rewards Point-of-Purchase Point-of-Purchase Contests Contests Sweepstakes Sweepstakes Game Game
Cash or other rewards for the use of a Cash or other rewards for the use of a certain product certain product Displays and demonstrations that Displays and demonstrations that take place at the point of sale take place at the point of sale Consumers submit an entry to be Consumers submit an entry to be judged judged Consumers submit their names for a Consumers submit their names for a drawing drawing Presents consumers with something Presents consumers with something every time they buy every time they buy

Public Relations (PR)
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.

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

Role and Impact of Public Relations
– Advantages:
• Strong impact on public awareness at lower cost than advertising • Greater credibility than advertising

– Publicity is often underused – Good public relations can be a powerful brand-building tool

Direct Marketing (DM)
• Avoid dependence on intermediaries • Focus on promotional mix ingredients which deal directly with targeted customers
– Direct mail – Telemarketing – Face-to-face selling – Direct response advertising – Online marketing

Benefits of Direct Marketing to Buyers

– Convenient – Easy to use – Private – Access to a wealth of information – Immediate – Interactive

Benefits of Direct Marketing to Sellers
– Powerful tool for building relationships – Allows for targeting of small groups or individuals with customized offers in a personalized fashion – Offers access to buyers that couldn’t be reached via other channels – Low-cost, effective alternative for reaching specific markets

Forms of Direct Marketing

• Face-to-Face Selling • Telemarketing • Direct-Mail Marketing

• Catalog Marketing • Kiosk Marketing • Online Marketing • Direct-Response TV Marketing

Promotion Strategy along PLC
PLC Stages Introduction Growth Maturity Decline OBJECTIVE Inform Persuade MIX Adv., SP, PS, DM Adv., PS, DM, PR

Remind, reinforce Adv., PS

Relative Importance of Promotion Tools
Consumer Markets
Advertising B2B Markets Personal Selling

Sales Promotion Direct & Online

Public Relations

Public Relations

Direct & Online Sales Promotion

Personal Selling

Advertising