PROMOTION OR MARKETING COMMUNICATION : NOTES

PROMOTION

Definition: The Marketing Communication refers to the means adopted by the companies to convey messages about the products and the brands they sell, either directly or indirectly to the customers with the intention to persuade them to purchase.

In other words, the different medium that company adopts to exchange the information about their goods and services to the customers is termed as Marketing Communication.

BASIC COMMUNICATION PROCESS:

·         Source – A source is also referred to as a sender.  The sender has a message to convey to others. The sender can be anyone from sales person to an organization.  At times, celebrities are used to endorse products and act as a sender for the product.  It is always important to make sure that the source is credible and trustworthy. 

·         Encode – The source encodes or translates ideas into a message. 

·         Message – After defining the target market, the marketer designs an effective message that will achieve the communication objectives. 

·         Receiver – The receiver is the person or group with whom the sender attempts to share ideas.  Marketers want a response, the reactions of the receiver, after being exposed to the message: for example, a consumer receiving the message about the new product.

·         Decode – The receiver decodes or interprets the message. For a message to be decoded by a receiver the way it was intended by the sender, the sender and receiver need to have common experiences.  In other words, a receiver may not decode a message the way it was intended to if her background and experience differ greatly from the sender’s.  A marketer has to be sensitive to the intended audience.

·         Response: is how customer reacts to message, will the customer purchases product or not.

·         Noise – Noise interferes with or disrupts effective communication.  This can include a poor television picture or radio signal.

·         Feedback – Feedback is monitoring and evaluating how accurately the intended message is being received.  This can be done by conducting market research. Essentially, this involves asking consumers if they have seen the message, if they recall the message, and what their attitude was towards the product. Simply it measures how successful the campaign was.

Objectives of promotion

Ø It informs and makes potential customers aware of a firm’s products.

Ø  It attempts to persuade current and potential customers of the desirability of buying and using a product.

Ø  It reminds people of a need they might have or a problem that is currently not satisfied or

solved or reminds them of the benefits of past transactions and so convince them that they should enter a into a similar exchange.

Ø  It acts as a basis of differentiation, especially in a market where there is little to distinguish between competing products and brands.

THE PROMOTION-MIX

It consists of a set of tools which can be used in different combinations in order to communicate with target audiences. There are four major promotional tools i.e. advertising, sales promotion, publicity and public relations, and personal selling, direct marketing.

ADVERTISING:

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

OR

It is any form of non-personal communication about a firm and its products that is transmitted through the mass media (television, radio, newspaper, magazines, outdoor displays, the internet etc.)

Types of advertising:

Ø  Product advertising: Is the type that promotes goods and services.

Ø  Institutional advertising: The type that promotes organizational images and ideas.

Ø  Pioneer advertising: Tries to develop the primary demand for a product category rather

Ø  than a specific product. It is usually done in the early stages of the product life-cycle to inform potential customers about the new product.

Ø  Competitive advertising: Aims at offsetting the effects of competitor’s promotion

Ø  campaigns.

Ø  Reminder & reinforcement advertising: It targets at letting consumers to know that an established brand still exists. Its purpose is to assure current users of the products benefits.

DEVELOPING AN ADVERTISING CAMPAIGN:

An advertising campaign involves designing a series of advertisements and placing them in various advertising media to reach a particular target market.

Developing and implementing the campaign consists the following six major steps

Ø  Identifying and analyzing the target market.

Ø  Defining the advertising objectives (mission)

Ø  Developing the advertising budget (money)

Ø  Developing the media plan (media)

Ø  Developing the advertising message.

Ø  Evaluating the effectiveness of the advertising (measure).

1) Identifying and analyzing the target market

This is the group at which advertisements are aimed. The analysis of the group may include; the geographic distribution and the location of the group, Age structure, Income, Gender, Educational levels, and Consumer attitudes regarding the firm’s products.

2) Defining advertising objectives

The objectives should be stated clearly, precisely, in measurable terms and should be realistic and specify a time frame within which the objectives should be achieved e.g.

·         Increase sales volume or market share

·         Increase product or brand awareness

·         Make consumers’ attitudes favourable, etc.

3) Developing the advertising budget

This is the total amount of money that a marketer allocates for advertising over a period of time. Factors to consider are such as; The geographic size of the market, Type of product, Business sales volume relative to competitors, and Distribution of buyers within the market.

Methods used to determine the budget are;

a) Objective and task approach: A technique that involves determining advertising

objectives and then attempting to list the tasks required to accomplish objectives and how much each task will cost.

b) Percentage of sales approach: Involves multiplying a firm’s predicted sales by a

standard percentage based on what the firm traditionally spends on advertising.

c) Competition matching approach: Is where a firm either matches its major competitors’budget or allocates the same percentage of sales for advertising as competitors.

d) Arbitrary/ affordable approach: Is an advertising budgeting technique in which high

level executives decides how much can be spent on advertising over a certain product.

4) Developing the media plan

This is the process of establishing the exact media channels to be used for advertising. The plan should determine how many people in the target will be exposed to the message and the effects of the messages on the individuals.

The aim is to reach the largest possible number of people in the advertising target and achieve the appropriate message reach and frequency for the target.

Reach: The percentage of consumers in the advertising target actually exposed to a

particular ad in a stated time period.

Frequency: The number of times target consumers are exposed to a particular

advertisement.

The plan must decide which media to use e.g. radio, television, newspapers, magazines,

outdoor displays, the internet etc

5) Creating the advertising message

The content and form of an advertising message depends on factors such as the product’s features and benefits and characteristics of the market such as sex, age, education etc. Advertising objectives also determine the content of message e.g. when the major objective is to increase brand awareness, the message may use much repetition of the brand name. The message should contain the following:

·         Identify a specific need/ problem of consumers

·         Suggest that the product is the best to solve the problem.

·         State the advantages/ benefits of the product.

·         Substantiate the claims/ advantages.

·         Ask the buyer for action.

As a guide to the message development, most marketers use the concept of A.I.D.A., i.e.

advertising should aim at;

·         Getting Attention (A)

·         Holding Interest (I)

·         Arousing Desire (D)

·         Obtaining Action (A)

6) Measuring/ evaluating the effectiveness of advertising.

If the advertisement objective was in terms of product awareness, brand awareness or attitude change, qualitative research (focus group and depth interviews) is used during and after the campaign to monitor shifts in consumer perceptions. Changes in demand of the product may also be measured.

Advantages of advertising

·         Advertising’s public nature suggests that the advertised product is standard and legitimate.

·         It lets the seller repeat a message many times.

·         It helps build the long term image of the product and company.

·         It can reach masses of geographically dispersed buyers at a low cost per person.

Disadvantages

·         It is impersonal and cannot be as persuasive as a salesperson.

·         The audience may not feel obliged to pay attention or respond.

·         It may unnecessarily increase the price of a product.

PERSONAL SELLING:

It is the process of using personal communication in an exchange situation (face to face communication) to inform customers and persuade them to purchase products. It is a process by which;

·         

While face to face with prospects, sales people can get more attention than an advertisement.

The sales person is seen as a representative of the company, responsible for explaining the

company’s total effort to target customers rather than just selling products.

The sales person is often the only link between the company and customers. He/she may

provide information about products, explain and interpret the company’s policies, negotiate

prices and identify technical problems when a product does not work well.

Tasks of sales people

a) Prospecting; gathering information to gain sales and prospective clients.

b) Communicating; providing information about the organization, its products and after sales

service.

c) Information gathering; collecting information about customers, competitors and the

general market situation.

d) Customer relationship building; i.e. developing and sustaining long-term customer

relationships.

e) Customer consultants; they help the customer to buy by understanding the customers needs and presenting the merits and demerits of their products.

Approaches to personal selling:

1) Sales oriented approach;

It assumes that customers are not likely to buy except under pressure, that they are

influenced by a sleek and smart representation. The sales person is only interested in achieving high sales volume and does not care what happens when the deal is through i.e. whether the customer is satisfied or not.

2) Customer oriented approach;

In this case the sales person learns how to listen and ask questions in order to identify customer needs and come up with solutions. This is a customer problem-solving approach which assumes that customers appreciate suggestions and will be loyal to sellers who have customers’ long term interests at heart.

Steps in the personal selling process

Prospecting & Qualifying

Pre Approach & Approach

Presentations

Overcoming or Handling objections

Closing

Follow-up

Types of sales people

1)Order getters; are concerned with getting new businesses through selling potential buyers with well organized presentations designed to sell a product. They locate new customers, open new accounts and seek new opportunities.

2) Order takers; they deal with regular customers by receiving their orders at the place of supply or through telephone, fax, mail, e-mail etc.

3) Support sales people; they facilitate the selling function by locating prospects, educating the customer, building goodwill and providing after-sales service.

Advantages of personal selling

·         A sales person can observe a potential customer’s needs and make adjustments in the sales presentation.

·         Sales people help in market information gathering.

·         The buyer usually feels a greater need to listen and respond.

·         Helps build closer customer relationships.

Disadvantages

·         It is expensive.

·         It tends to be intrusive due to its personal nature.

PUBLIC RELATIONS & PUBLICITY:

Definitions;

Publicity refers to communication in news story form about a firm and its products that is transmitted through the mass media at no charge.

Public relations are a planned and sustained effort to establish and maintain goodwill

between a firm and its target publics e.g. customers, employees, shareholders, suppliers, the government, environmentalists and the public in general.

Objectives

·         To create and maintain the corporate and brand image of the firm i.e. to enhance the position and standing of the firm in the eyes of the public.

·         To disseminate information about the firm to the public.

·         To undertake corrective measures to overcome bad publicity.

Public Relations and Publicity Tools:

Press release; using various media channels to highlight on specific information or events of the firm e.g. product launches, expansions etc.

Press conferences; meetings called by the firm to announce major news events or to

respond to a crisis.

Events; like trade shows, exhibitions, anniversaries etc. which may be used to draw attention

to the firms products.

Corporate social responsibility activities; i.e. building goodwill by contributing money,

time and other resources to good causes

Lobbying; Influencing people in government and other authority in order to secure their support to achieve a desired action e.g. to promote a legislation or regulation favourable to the firm’s business.

Feature articles; longer than press releases and usually prepared for a certain publication.

Sponsorship; this refers to financial or material support of an event, activity, person, organization or product by an unrelated organization or donor. Resources are given to the recipient of the sponsorship deal in return for the exposure of the sponsor’s name or brands. The sponsorship of events also helps to improve the firm’s corporate image.

Identity media; refers to a firm’s visual identity that the public recognizes and attributes to the firm. The visual identity may be in the form of company logo, stationery, brochures, signs,business cards etc.

SALES PROMOTIONS

Definition:

It is an activity or material that acts as a direct inducement and offers added value to buy the product. It is often a short-term incentive to encourage purchase of the product.

Objectives of sales promotion

Sales promotion activities are designed to achieve the following targets;

o   To introduce new products

o   To attract new customers

o   To increase sales during periods of low demand

o   To encourage intermediaries to carry large stocks

o   To improve the public image of the firm

o   To induce current customers to buy more

Sales promotion techniques:

There are two types; 1; Consumer sales promotion, and 2; Trade sales promotion

1. Consumer sales promotions:

These are often aimed at the final consumers. They include the following;

Coupons: certificates entitling the bearer to a price reduction of a product. The coupons are

distributed through the print media, direct mail and attached to other products.

Demonstrations: are occasions at which a manufacturer shows how a product works in order

to encourage trial use and purchase of the product.

Loyalty cards: offer discounts or free merchandise to regular customers. They are normally

employed by supermarkets and are mechanisms in which regular customers who remain loyal

to a particular outlet are rewarded with discounts or free merchandise (e.g. Nakumatt

smartcard)

Free samples: are give-away used to stimulate trial of a new product or to induce brand

switching.

Money/cash refund: a specific amount of money awarded to customers after the purchase of

a product after they submit a “proof of purchase” to the manufacturer.

Premiums (gifts) are items offered free at a minimum cost or as a bonus for purchasing a

product.

Price-off deals: offering a certain reduction off the regular price shown on the package for a

limited period of time.

Price packs: Offering two similar or related products for the price of one (e.g. toothpaste &

tooth brush)

Consumer contests: Involves consumers submitting entries from which a winner is selected

by a panel of judges to win cash, trips or merchandise based on his/her analytical or creative

skills.

Consumer sweepstakes: consumers submit their names for inclusion in a draw for prizes.

Product warranties: promises made by sellers that the product will perform as specified or

that the seller will repair it or refund the customer’s money during a specified period.

2. Trade sales promotions;

These are aimed at the resellers e.g., retailers, wholesalers, etc. They include;

Buying allowance; a temporary price reduction to resellers for purchasing specified

quantities of a product.

Free merchandise: free items offered to resellers who purchase a stated quantity of the

same or different products.

Merchandise allowance; a manufacturer’s agreement to pay resellers a certain amount of

money to providing special promotional efforts such as advertising or store displays.

Sales contests; are designed to motivate distributors and resellers by recognizing and

rewarding outstanding achievements.

Advantages of sales promotion:

1. Low unit cost for selling

Sales promotion is always the outcome of large scale production. Large scale production itself

is meant for low cost. Sales promotion assures of a low cost selling.

2. Effective sales support

Basically, sales promotion policies supplement the efforts of personal and impersonal

salesmanship (advertising). It is found that good sales promotion materials make the

salesman’s efforts more productive.

3. Increased speed of product acceptance

Most of the sales promotion devices (contests, coupons) can be used faster than the other promotion methods such as advertisement.

Factors determining selection of the promotion mix

1) Promotional resources: If a company’s promotional budget is extremely limited, it is likely to rely on personal selling rather than advertising or sales promotion.

2) Promotional objectives, policies e.g. if the objective is to create mass awareness of a new consumer product then advertising or sales promotion can be used.

3) Characteristics of the target market:

If the size is limited, the promotional mix will emphasize personal selling. But when markets are large, advertising and sales promotion is used because the methods can reach many people at low cost per person.

Geographic distribution: Personal selling is more feasible if a company’s customers are concentrated in small area than if dispersed. If dispersed advertising would be used.

Socio-economic characteristics: Age, income, level of education.

4) Characteristic of the product: for industrial products personal selling is used but

advertising plays a major role for consumer goods.

5) Price: high priced products call for more personal selling because consumers associate

greater risk with the purchase of such products and want the advice of a sales person.

6) Stage of the PLC e.g. at introduction stage, advertising is done to create awareness.

7) Cost of promotional methods.

8) Availability: e.g. a product may be banned from being advertised on TV or radio e.g.

cigarettes.

DIRECT MARKETING

Direct marketing is the use of consumer direct channels to reach and deliver goods and services to customers without using marketing middlemen. These channels include direct mail, catalogs, telemarketing, interactive TV, website, and mobile devices.

Direct marketers seek a measurable response, typically a customer order. This is sometimes called direct order marketing. Today many direct marketers use direct marketing to build a long term relationship with the customer. They also send birthday cards, information materials or small premiums to certain customers. Airlines, hotel, and other businesses build strong customer relationships through frequency award programs and club programs.

Promotional strategies:

Push strategy; A promotional strategy in which the producer promotes the product only to the next level down the marketing channel.

Some of push tactics include:-

Trade show promotions to encourage retailer demand

Direct selling to customers in showrooms or face to face

Negotiation with retailers to stock your product

Efficient supply chain allowing retailers an efficient supply

Packaging design to encourage purchase

Point of sale displays

Pull strategy; In which a business promotes directly to consumers in order to create a strong consumer demand for its products. A pull strategy motivates customers to actively seek out a specific product.