Marketing Theory and practice

BAHIR DAR UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MARKETING MANAGEMENT
POST GRAGUATE PROGRAM
Group Presentation On promotion/marketing
communication
Group members
Name (I.D No.)
Ahmed /id no..120
Eskedar yirga /id no..1208126/
Nuru baye /id no..1209281
Marketing Theory and practice

Chapter Eight

promotion/marketing
communication
Marketing Theory and practice
Outline
8.1 The communication process
8.2. Types of promotion
8.3. Promotional message and media
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Meaning of Promotion
The heart of every transactional exchange is
communication between parties. The buyer
seeks certain basic information about product
features, price, quality, support service,
reputation of the seller, and so forth.
Few goods or services, no matter how well
developed, priced, or distributed, can survive in
the marketplace without effective promotion.
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Promotion is the communication by

marketers that informs, persuades, and
reminds potential buyers of a product in
order to influence an opinion or elicit a
response.
The marketing manager’s main promotion
job is to tell target customers that the right
Product is available at the right Place at the
right Price.
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The Goals of Promotion
 Effective promotion will achieve one or more of three goals:
It will inform the target audience, persuade the target
audience, or remind the target audience. Often a marketer will
try to achieve two or more of these goals at the same time.
1. Informing
 Informative promotion seeks to convert an existing need into
a want or to stimulate interest in a new product. It is generally
more prevalent during the early stages of the product life
cycle.
 People typically will not buy a product or service or
support a nonprofit organization until they know its purpose
and its benefits to them. Informative messages are important
for promoting complex and technical products such as
automobiles, computers, and investment services
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PERSUADING
 Persuasive promotion is designed to stimulate a purchase or
an action—for example, to eat more Juice or use Verizon
wireless mobile phone service. Persuasion normally
becomes the main promotion goal when the product enters
the growth stage of its life cycle. By this time, the target
market should have general product awareness and some
knowledge of how the product can fulfill their wants.

 Therefore, the promotional goal switches from informing

consumers about the product category to persuading them
to buy the company’s brand rather than the competitor’s.
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REMINDING
 Reminder promotion is used to keep the product and brand
name in the public’s mind.
 This type of promotion prevails during the maturity stage
of the life cycle.
 It assumes that the target market has already been
persuaded of the good’s or service’s merits.
 Its purpose is simply to trigger a memory. Crest
toothpaste, Tide laundry detergent, St. George beer, and
many other consumer products often use reminder
promotion. Similarly, Philips Magnavox could advertise
just the brand rather than the benefits of the product.
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Informative promotion
 Increasing the awareness of a new brand, product class,
or product attribute
 Explaining how the product works
 Suggesting new uses for a product
 Building a company image

Persuasive promotion
 Encouraging brand switching
 Changing customers’ perceptions of product attributes
 Influencing customers to buy now
 Persuading customers to call
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Reminder promotion
Reminding consumers that the product may be
needed in the near future
Reminding consumers where to buy the
product
Maintaining consumer awareness
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8.1 The communication process

A modern company manages a complex marketing
communications system .
The company communicates with its
intermediaries, consumers and various publics. Its
intermediaries communicate with their consumers
and publics.
Consumers have word-of-mouth communication
with each other and with other publics. Meanwhile,
each group provides feedback to every other
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Marketing communication process
• encoding  decoding  response  feedback
• elements in the communication process: sender
 encoding message  decoding  receiver
• sender: the party sending the message to
another party.
• encoding: the process of putting thought into
symbolic form.
• message: the set of symbols that the sender
transmits.
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• media: the communication channels through which
the message moves from the sender to the receiver.
• decoding: the process by which the receiver assigns
meaning to the symbols encoded by the sender.
• receiver: the party receiving the message sent by
another party.
• response: the reaction of the receiver after being
exposed to the message.
• feedback: the part of the receiver’s response
communicated back to the sender.
• noise: the unplanned static or distortion during the
communication process.
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Steps in developing marketing communication
1. identifying the target audience
• a market communicator start with a clear target
audience in mind.
• the audience may be current users or potential buyers.
• the audience may be individuals, groups, special
publics, or the general public.
2. Determining the communication object
• the target audience may be in any of six buyer-
readiness stages: awareness, knowledge, liking,
preference, conviction, and purchase.
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buyer readiness stages:- the stage consumers
normally pass through on their way to a purchase,
including awareness, knowledge, liking,
preference, conviction/confidence/, and finally the
actual purchase.
3. Designing a message
 ideally, the message should get attention, hold
interest, arouse desire, and obtain action.
 when putting the message together, the marketing
communicator must decide what to say(message
content), and how to say it(message structure and
format).
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 message content: there are three types of appeals:
 rational appeals: relate to the audience's self interest. They show that
the product will produce the desired benefits. E.g. messages showing
quality, economy, value, or performance.
 Emotional appeals: attempt to stir up either negative or positive
emotions that can motivate purchase.
 Moral appeals: are directed to an audience's sense of what is “right”
and “proper”.
• Message structure: three message structure issues
1. Whether to draw a conclusion or leave it to the audience.
2. Whether to present the strongest argument first or last.
3. Whether to present a one-sided argument( mentioning only the
product’s strengths) or a two-sided argument(touting the product’s
strengths while also admitting its short coming)
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• Message format: in a print ad, the communicator has to
decide on the headline, copy, illustration, and colors. If
the message is to be carried out on TV or in person, the
all these elements plus body language must be planned.
4. Choosing media
• there are two broad types of communication channels :
personal and non personal
• Personal communication channels: channels through
which two or more people communicate directly with
each other, including face to face, on the phone, via
mail or e-mail, or even through internet “chat"
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• non personal communication channels: media that carry
messages without personal contact or feedback, including
major media, atmospheres, and events.
5. Select the message source
• in either personal or non personal communication, the
message’s impact also depends on how the target audience
views the communicator. Thus, many food companies
promote to doctors, dentists, and other health- care providers.
6. Collect feedback
• after sending the message, the communicator must research
its effect on the target audience.
• how many people bought the product, talked to others about
it, or visited the store.
 Elements in the Communication Process

SENDER
SENDER Message
(source)
(source) Encoding
Encoding Decoding
Decoding RECEIVER(s)
Media

Noise
Noise
Feedback
Feedback
Response
Response
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8.2. Types of promotion
ADVERTISING paid, no personal
communication regarding goods, services,
organizations, people, places, and ideas
that is transmitted through various media
by business firms, government and other
nonprofit organizations, and individuals
who are identified in the advertising
message as the sponsor.
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It includes the use of traditional media
like magazines, newspapers, radio and
TV, signs, transit cards (advertisements on
buses and taxis and at bus stops) and
direct mail as well as new media such as
the Internet.
While advertising must be paid for,
another form of mass selling—publicity—
is “free.”
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 All advertisements (Ads, for short) have four (4)
features:
 A verbal and /or visual non-personal message
 An identified sponsor
 Delivered through one or more media
 Payment by the sponsor to the medium carrying the
message.
 Although some advertising is directed to specific
individuals (as, for example, in the use of direct mail),
most advertising messages are tailored to a group, and
employ mass media such as radio, television,
newspaper, and magazines.
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Its Nature
 The many forms of advertising make it hard to generalize
about its unique qualities. However, several qualities can
be noted:
 One of the primary benefits of advertising is its ability to
communicate to a geographically dispersed large number
of people at one time. LC/e
 The public knows who is behind the advertising because
the sponsor is openly identified in the advertisement.
Also, payment is made by the sponsor to the media that
carry the message. The case of sponsor and payment
differentiate advertising from propaganda and publicity.
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 Advertising enables the seller to repeat a message
many times, and it lets the buyer receive and compare
the messages of various competitors.
 Large-scale advertising by a seller says something
positive about the seller's size, popularity and success.
 Advertising is also very expensive, allowing the
company to dramatize its products through the artful
use of print, sound and colour.
 On the one hand, advertising can be used to build up a
long-term image for a product (such as Coca-Cola
ads). On the other hand, advertising can trigger quick
sales (as when a department store advertises a
weekend sale).
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Advertising also has some shortcomings:
 Although it reaches many people quickly, advertising is
impersonal and cannot be as persuasive as company
salespeople.
 Advertising is only able to carry on a one-way
communication with the audience, and the audience does
not feel that it has to pay attention or respond.
 In addition, advertising can be very costly. Although
some advertising forms, such as newspaper and radio
advertising, can be done on smaller budgets, other forms,
such as network TV advertising, require very large
budgets
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Types of Advertising:
Advertising types can be classified in to
different categories according to different
basis.
1. Based on audience: B-2-C and B-2-B
advertising
Business –to-consumer advertising: the ads
target individual buyers
Business-to-business advertising : the ads
target business customers
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2. Based on demand: Primary and selective advertising
 Primary demand advertising: aim at stimulating demand for
generic category of a product like coffee. This type of
advertising is used when the product is in the introductory stage.
This is called pioneering advertising. Its objective is to inform,
rather than persuade, the target market.
 Selective demand advertising: intended to stimulate demand for
individual brands like Yirgachefe, Harrar, Jimma coffee etc.
This is essentially competitive advertising—that pits one brand
against another. This type of advertising typically is used when
a product has gone beyond the introductory stage of its life
cycle. The objective of competitive advertising is to persuade
the potential customers, and it emphasizes particular benefits of
the brand being advertised.
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PERSONAL SELLING involves oral
communication with one or more prospective
buyers by paid representatives for the purpose of
making sales.

Itincludes several different forms, such as sales calls

by a field representative (field selling), assistance by
a sales clerk (retail selling), having an Avon
representative call at your home (door-to-door
selling), and so forth.
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Personal selling involves direct spoken
communication between sellers and potential
customers. Face-to-face selling provides
immediate feedback—which helps salespeople
to adapt.
Although some personal selling is included in
most marketing mixes, it can be very expensive.
So it’s often desirable to combine personal
selling with mass selling and sales promotion.
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Recently, both business-to-business and
business-to-consumer selling focus on building
long-term relationships rather than on making a
onetime sale.
Compared to advertising, personal selling has
several unique qualities;
a. It involves personal interaction between two or
more people, so each person can observe the
other's needs and characteristics and make quick
adjustments.
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b. Personal selling also allows all kinds of relationships
to spring up, ranging from a matter-of-fact selling
relationship to a deep personal friendship. The
effective salesperson keeps the customer's interests at
heart in order to build a long-term relationship.
c. Finally, with personal selling the buyer usually feels
a greater need to listen and respond, even if the
response is a polite 'no thank you'.
These unique qualities come at a cost, however. A
sales force requires a longer term commitment than
does advertising - advertising can be turned on and
off, but sales force size is harder to change. Personal
selling is also the company's most expensive
promotion tool,
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 SALES PROMOTION Involves…
paid….marketing communication activities(other than
advertising, publicity, or personal selling) that are
intended to stimulate consumer purchases and dealer
effectiveness.
Sales promotion may be aimed at consumers, at
middlemen, or at a firm’s own employees. Examples are
listed in the following exhibit.
Relative to other promotion methods, sales promotion can
usually be implemented quickly and get results sooner.
In fact, most sales promotion efforts are designed to
produce immediate results.
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Sales promotion is generally a short-run tool
used to stimulate immediate increases in
demand.
In fact, marketers often use sales promotion to
improve the effectiveness of other ingredients
in the promotional mix, especially advertising
and personal selling.
Research shows that sales promotion
complements advertising by yielding faster
sales responses.
Exhibit1: example of sales promotion activity
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PUBLIC RELATIONS / PUBLICITY
Publicity is no personal public relations
that is transmitted Public relations
includes any communication to foster a
favorable image for goods, services,
organizations, people, places, and ideas. It
may be personal or no personal, paid or
nonpaid, and sponsor controlled or not
controlled through media but not paid for
by an identified sponsor.
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Concerned about how they are perceived by
their target markets, organizations often
spend large sums to build a positive public
image.
Public relations is the marketing function
that evaluates public attitudes, identifies
areas within the organization the public may
be interested in, and executes a program of
action to earn public understanding and
acceptance.
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 Public relations helps an organization communicate with its
customers, suppliers, stockholders, government officials,
employees, and the community in which it operates.
 Marketers use public relations not only to maintain a positive image
but also to educate the public about the company’s goals and
objectives, introduce new products, and help support the sales
effort.
 PR is a non-personal stimulation of demand for a product, service,
or business unit by planting commercially significant news about it
in a published medium (i.e., publicity) or obtaining favorable
presentation of it through vehicles not paid for by the sponsor.
Although commissions are not paid to the various media, there are
salaries and other expenses that mean that public relations is not a
costless form of promotion.
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 Publicity is any unpaid form of non-personal presentation
of ideas, goods, or services. Of course, publicity people
are paid. But they try to attract attention to the firm and its
offerings without having to pay media costs.
 For example, movie studios try to get celebrities on TV
talk shows because this generates a lot of interest and sells
tickets to new movies without the studio paying for TV
time.
 Publicity is mention in the media. Orgs usually have little
control over the message in the media, at least, not as they
do in advertising. Regarding publicity, reporters and
writers decide what will be said.
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 Public relations or PR offers several unique qualities. It is all
those activities that the organization does to communicate
with target audiences which are not directly paid for.
 PR is very believable: news stories, features and events seem
more real and convincing to readers than ads do.
 Public relations can reach many prospects who avoid
salespeople and advertisements, since the message gets to the
buyers as 'news' rather than as a sales-directed
communication.
 And, like advertising, PR can dramatize a company or
product. The Body Shop is one of the few international
companies that have used public relations as a more effective
alternative to mass TV advertising-
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The Institute of Public Relations defines public
relations as follows:
“The planned and sustained effort to establish and
maintain goodwill and mutual understanding
between an organization and its publics”
What is meant by the term “publics” in the above
definition?
A business may have many “publics” with which it
needs to maintain good relations and build goodwill.
For example, consider the relevant “publics” for a
publicly-quoted business engaged in medical research:
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• Shareholders, Employees
• Trade unions, • Members of the “general public”
• Customers (past and present), • Pressure groups
• The medical profession
• Charities funding medical research
• Professional research bodies and policy-forming
organizations
• The media, • Government and politicians
The role of public relations is to:

• Identify the relevant publics

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Influence the opinions of those publics by:
o Reinforcing favorable opinions
o Transforming perhaps neutral opinions into positive ones
o Changing or neutralizing hostile opinions
Public relations techniques
There are many techniques available to influence public
opinion, some of which are more appropriate in certain
circumstances than others:
a. Consumer communication
Customer press releases, Trade press releases, Promotional
videos, Consumer exhibitions
Competitions and prizes, Product launch events
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Celebrity endorsements, Web sites
B. Business communication
Corporate identity design, Company and product
videos, Direct mailings, Web site, Trade exhibitions
C. Internal / employee communication
In-house newsletters and magazines
Intranet
Notice boards
Employee conferences
Email
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D. External corporate communication
Company literature (brochures, videos etc.)
Community involvement programmers'
Trade, local, national and international media relations
E. Financial communication
Financial media relations
Annual report and accounts
Meetings with stock market analysts, fund managers
etc
Shareholder meetings (including the annual general
meeting
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 Given the wide range of techniques used in public
relations, how is it possible to measure the
effectiveness of public relations?
 It is actually quite difficult to measure whether the key
messages have been communicated to the target public.
In any event, this could be quite costly since it would
involve a large amount of regular research. Instead, the
main measures of effectiveness concentrate on the
process of public relations, and include:
• Monitoring the amount of media coverage obtained
(press cuttings agencies play a role in keeping
businesses informed of this)
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8.3. Promotional message and media
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