Marketing Mix - Promotion

Marketing Mix Promotion Modern marketing calls for more than developing a good product, pricing it attractively, and making it accessible. Companies must also communicate with present and potential stakeholders as well as the general public. For most companies, the question is not whether to communicate but rather what to say, to whom, and how often. Common communication platform The marketing communications mix consists of advertising, Events and experiences, sales promotion, public relations and publicity, personal selling, and direct and interactive marketing and word of mouth marketing, although marketers know that communication goes beyond these methods.

Communication model

Macro Model of the communication process - This contains nine elements, two represent major parties in the communication—sender and receiver. Two represent the the major communication tools—message and media. Four represent major communication functions– encoding and decoding, response and feedback. The last element in the process is noise.

DEVELOPING EFFECTIVE MARKETING COMMUNICATIONS Step 1: Identifying the Target Audience The first step is to identify a clear target audience: potential buyers of the company’s products, current users, deciders, or influencers; individuals, groups, particular publics, or the general public. Further analysis helps the company assess the audience’s current image of the company, its products, and its competitors. (Image is the set of beliefs, ideas, and impressions that a person holds regarding an object)

Step 2: Determining the Communication Objectives

Step 3 – Design the communication Formulating the communications to achieve the desired response will require solving three problems. What to say ( message strategy), how to say it (creative strategy) and who should say it ( message source) Message strategy - Ideally, the message should gain attention, hold interest, arouse desire, and elicit action. but the AIDA framework suggests the desirable qualities of any communication. Formulating the message will require solving four problems: what to say (message content), how to say it logically (message structure), how to say it symbolically (message format), and who should say it (message source).

Step 4: Selecting Communication Channels Now that the message has been designed, the communicator must select efficient communication channels to carry it. Personal Communication Channels Personal communication channels involve two or more persons communicating directly with each other face to face, person to audience, over the telephone, or through e-mail. These channels derive their effectiveness through the opportunities for individualizing the presentation and feedback. Nonpersonal Communication Channels Nonpersonal channels include media, sales promotion, and events and experience and public relations. Media consist of print media (newspapers, magazines, direct mail), broadcast media

(radio, television), electronic media (audiotape, videotape, CD-ROM, DVD, Web page), and display media (billboards, signs, posters). Most nonpersonal messages come through paid media. Events are occurrences designed to communicate particular messages to target audiences. Direct Mail Direct mail is very highly focused upon targeting consumers based upon a database. As with all marketing, the potential consumer is 'defined' based upon a series of attributes and similarities. Creative agencies work with marketers to design a highly focused communication in the form of a mailing. The mail is sent out to the potential consumers and responses are carefully monitored. For example, if you are marketing medical text books, you would use a database of doctors' surgeries as the basis of your mail shot. Trade Fairs and Exhibitions. Such approaches are very good for making new contacts and renewing old ones. Companies will seldom sell much at such events. The purpose is to increase awareness and to encourage trial. They offer the opportunity for companies to meet with both the trade and the consumer. Expo has recently finish in Germany with the next one planned for Japan in 2005, despite a recent decline in interest in such events. Sponsorship. Sponsorship is where an organization pays to be associated with a particular event, cause or image. Companies will sponsor sports events such as the Olympics or Formula One. The attributes of the event are then associated with the sponsoring organization. Factors in Setting the Marketing Communications Mix Companies must consider several factors in developing their promotion mix: 

Type of product market. As Figure 5-6 shows, promotional allocations vary between consumer and business markets.

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Push-versus-pull strategy. A push strategy involves the manufacturer using sales force and trade promotion to induce intermediaries to carry, promote, and sell the product to end users. This is especially appropriate where there is low brand loyalty in a category; brand choice is made in the store; the product is an impulse item; and product benefits are well understood. A pull strategy involves the manufacturer using advertising and consumer promotion to induce consumers to ask intermediaries for the product, thus inducing the intermediaries to order it.

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Buyer-readiness stage. Promotional tools vary in cost effectiveness at different stages of buyer readiness,

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Product-life cycle stage. Promotional tools also vary in cost effectiveness at different stages of the product life cycle.

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Company market rank. Market leaders derive more benefit from advertising than from sales promotion

Step 7: Measuring Results After implementing the promotional plan, the communicator must measure its impact. Members of the target audience are asked whether they recognize or recall the message, how many times they saw it, what points they recall, how they felt about the message, and their previous and current attitudes toward the product and company. Eg -Suppose that 80 percent of the targeted customers are aware of the brand, 60 percent have tried it, and only 20 percent who have tried it are satisfied. This indicates that the communications program is effective in creating awareness, but the product fails to meet consumer expectations. However, if 40 percent of the targeted customers are aware of the brand and only 30 percent have tried it but 80 percent of those who have tried it are satisfied the communications program needs to be strengthened to take advantage of the brand’s power.

Step 8: Managing the Integrated Marketing Communications Process To do this most effectively, companies must embrace integrated marketing communications. As defined by the American Association of Advertising Agencies, integrated marketing communications (IMC) is a concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communications disciplines—for example, general advertising, direct response, sales promotion and public relations—and combines these disciplines to provide clarity, consistency, and maximum communications’ impact through the seamless integration of discrete messages.

Step 5: Establishing the Marketing Communications Budget Affordable method. Many companies set the promotion budget at what management thinks the firm can afford. Percentage-of-sales method. Many firms set promotion expenditures at a specified percentage of sales (either current or anticipated) or of the sales price. Competitive-parity method. Some companies set their promotion budget to achieve share-ofvoice parity with competitors. Objective-and-task method. Here, marketers develop promotion budgets by defining specific objectives, determining the tasks that must be performed to achieve these objectives, and estimating the costs of performing these tasks

Step 6: Developing and Managing the Marketing Communications Mix

Advertising Advertising is a 'paid form' communication. It is used to develop attitudes, create awareness, and transmit information in order to gain a response from the target market. There are many advertising 'media' such as newspapers (local, national, free, trade), magazines and journals, television (local, national, terrestrial, satellite) cinema, outdoor advertising (such as posters, bus sides). Personal Selling. Personal Selling is an effective way to manage personal customer relationships. The sales person acts on behalf of the organization. They tend to be well trained in the approaches and techniques of personal selling. However sales people are very expensive and should only be used where there is a genuine return on investment. For example salesmen are often used to sell cars or home improvements where the margin is high Sales Promotion. Sales promotion tend to be thought of as being all promotions apart from advertising, personal selling, and public relations. For example the BOGOF promotion, or Buy One Get One Free. Others include couponing, money-off promotions, competitions, free accessories (such as free blades with a new razor), introductory offers (such as buy digital TV and get free installation), and so on. Public Relations (PR) Public Relations is defined as 'the deliberate, planned and sustained effort to establish and maintain mutual understanding between an organization and its publics' (Institute of Public Relations). It is relatively cheap, but certainly not cheap. Successful strategies tend to be longterm and plan for all eventualities. Direct Mail Direct mail is very highly focused upon targeting consumers based upon a database. As with all marketing, the potential consumer is 'defined' based upon a series of attributes and similarities. Creative agencies work with marketers to design a highly focused communication in the form of a mailing. The mail is sent out to the potential consumers and responses are carefully monitored. For example, if you are marketing medical text books, you would use a database of doctors' surgeries as the basis of your mail shot. Trade Fairs and Exhibitions. Such approaches are very good for making new contacts and renewing old ones. Companies will seldom sell much at such events. The purpose is to increase awareness and to encourage trial. They offer the opportunity for companies to meet with both the trade and the consumer. Expo has recently finish in Germany with the next one planned for Japan in 2005, despite a recent decline in interest in such events.

Sponsorship. Sponsorship is where an organization pays to be associated with a particular event, cause or image. Companies will sponsor sports events such as the Olympics or Formula One. The attributes of the event are then associated with the sponsoring organization. Factors in Setting the Marketing Communications Mix Companies must consider several factors in developing their promotion mix: Type of product market. As Figure 5-6 shows, promotional allocations vary between consumer and business markets. Push-versus-pull strategy. A push strategy involves the manufacturer using sales force and trade promotion to induce intermediaries to carry, promote, and sell the product to end users. This is especially appropriate where there is low brand loyalty in a category; brand choice is made in the store; the product is an impulse item; and product benefits are well understood. A pull strategy involves the manufacturer using advertising and consumer promotion to induce consumers to ask intermediaries for the product, thus inducing the intermediaries to order it. Buyer-readiness stage. Promotional tools vary in cost effectiveness at different stages of buyer readiness, Product-life cycle stage. Promotional tools also vary in cost effectiveness at different stages of the product life cycle. Company market rank. Market leaders derive more benefit from advertising than from sales promotion

Step 7: Measuring Results After implementing the promotional plan, the communicator must measure its impact. Members of the target audience are asked whether they recognize or recall the message, how many times they saw it, what points they recall, how they felt about the message, and their previous and current attitudes toward the product and company. Eg -Suppose that 80 percent of the targeted customers are aware of the brand, 60 percent have tried it, and only 20 percent who have tried it are satisfied. This indicates that the communications program is effective in creating awareness, but the product fails to meet consumer expectations. However, if 40 percent of the targeted customers are aware of the brand and only 30 percent have tried it but 80 percent of those who have tried it are satisfied the communications program needs to be strengthened to take advantage of the brand’s power.

Step 8: Managing the Integrated Marketing Communications Process

To do this most effectively, companies must embrace integrated marketing communications. As defined by the American Association of Advertising Agencies, integrated marketing communications (IMC) is a concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communications disciplines—for example, general advertising, direct response, sales promotion and public relations—and combines these disciplines to provide clarity, consistency, and maximum communications’ impact through the seamless integration of discrete messages. For more marketing notes -

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