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Objectives Inform

Persuade Remind

Advertising

Public

Relations

Sales Promotion

Direct

Marketing

Personal Selling

PROMOTION/COMMUNICATIONS

Communicating Customer Value

THE ROLE OF MARKETING COMMUNICATIONS Modern marketing calls for more than developing an excellent product, pricing it

attractively, and making it available to target market. Organisations must also communicate with its customers and the general public and it represents the ‘voice’ of the organisation and its products and are a means by which it could build relationships with its customers.

Marketing communications are the means by which an organisation attempts to inform, persuade, and remind consumers – directly or indirectly – about

the products they sell.

MARKETING COMMUNICATION MIX ELEMENTS The marketing communications mix or the promotions mix is the marketer’s bag of tools for communicating with the customers and other stakeholders – consists of advertising, sales

promotion, public relations, personal selling and direct marketing. All of these tools must be carefully planned, blended and coordinated under the concept of Integrated Marketing

Communications (IMC) in order to deliver a clear and compelling message and to build profitable customer relationships.

Marketing Communication Mix Elements

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The major marketing communication/Promotional mix elements defined by Philip Kotler are as follows:

Advertising: Any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor. Sales Promotion: A variety of short-term incentives to encourage trial or purchase of

a product or service. Public Relations: Building good relations with the company’s various publics by

obtaining favorable publicity by building up a good “corporate image” and handling or heading off unfavorable rumors, stories and events. Personal Selling: Personal presentations by the firms sales force for the purpose of

making sales and building customer relationships. Direct Marketing: Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate long term customer relationships.

In recent years, many more promotional tools are added to the above list. Some of these are:

Ambient advertising: This is advertising which becomes part of the physical

environment – messages on stair risers, city centers and so forth. Ambient advertising often cuts through advertising clutter. It is also often has the novelty value, so that people remember it and sometimes even tell their friends about it.

Websites: An internet website can be interactive and it offers an entirely different

communications medium from any other because they establish an automated dialogue with the customer. Therefore, it gives the customer a degree of control over the dialogue.

Word of Mouth: This is probably the most powerful promotional medium available,

since it is the most likely to be believed and acted upon. Word of mouth is informal communication between friends and family members: people like to talk about

products they have purchased and companies they have dealt with, so marketers try to ensure that word of mouth is positive rather than negative.

Word of Mouse/Viral Marketing: Viral marketing, or ‘e-mail a friend’, is another

form of word of mouth, or “word of mouse,” marketing. Viral marketing involves

creating a Web-site, e-mail message, or other marketing event that is so infectious that customers will want to pass it along to their friends. It is deliberately stimulated

by the marketer and is easy to achieve with the use of a forwarding facility. Thus, viral marketing is very inexpensive and when the information comes from a friend, the recipient is much more likely to open and read it.

Product placement: This means supplying products to TV companies, Movie

productions to be used in the shows/movies.

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All of the above promotional tools must be carefully coordinated and integrated under the concept of integrated marketing communications (IMC) in order to deliver a clear and compelling message.

Integrated Marketing communications (IMC): An approach to achieving the objectives of a marketing campaign, through a well-coordinated use of different promotional

tools that are well blended together as a unified force, rather than permitting each to work in isolation, in order to deliver a deliver a clear, consistent and compelling message about the organisation and its products.

ADVERTISING

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

Advertising Objectives

An advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period of time. Advertising objectives can be classified by

primary purpose - whether the aim is to inform, persuade, or remind. o Informative advertising is used heavily when introducing a new product category.

In this case, the objective is to build primary demand. Thus, producers of LCD television must first inform consumers of the image quality and convenience benefits of the new product.

o Persuasive advertising becomes more important as competition increases. Here, the

company's objective is to build selective demand. For example, once LCD television are

established, Sony begins trying to persuade consumers by creating a desire for Sony Bravia.

Some persuasive advertising has become comparative advertising, in which a company

directly or indirectly compares its brand with other brands. Comparative advertising has been used for products ranging from soft drinks and computers to batteries, pain

relievers, car rentals, and credit cards. o Reminder advertising is important for mature products – it keeps consumers

thinking about that product. For example Coca-cola ads primarily remind people about coca-cola rather than informing or persuading them.

Types of Media (Media Decisions)

Choice of medium is as important as choice of tool, because the medium becomes part of

the message. An advertisement placed in a cheap tabloid newspaper does not have the same message as the same advertisement placed in an upmarket broadsheet, and even TV

advertising conveys different impressions according to the type of programme it is linked to.

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The media planner has to know the reach, frequency, and impact of each of the major media types. The major media types are as follows:

o Print Advertising: newspapers, magazine, directories o Broadcast advertising: radio, television, cable television o Outdoor advertising: billboards, poster, signs o Transport advertising: buses, trains, company vehicles o Web advertising: banners, pop-ups, social media o Cinema advertising: both on the screen and inside the cinema.

Sales Promotion

A variety of short-term incentives to encourage trial or purchase of a product or service.

Sales promotion consists of short-term incentives to encourage purchase or sales of a prod-uct or service. Whereas advertising and personal selling offer reasons to buy a product or service, sales promotion offers reasons to buy now. Sales Promotion Objectives Sales promotion objectives vary widely. Organisations may use consumer promotions to

urge short-term customer buying or to enhance customer brand involvement and the intention is to stimulate consumer pull. Objective of Trade promotions, which is aimed at the trade to carry the producers products, getting more self space, getting more sales force

support and market it aggressively. When the trade is targeted distribution push is the objective.

Major Sales Promotion Tools Many tools can be used to accomplish sales promotional objectives as given below: Consumer Promotional Tools or techniques

Some of the tools could be as follows:

o Discount coupons – are used to stimulate consumers to attract repeat purchases at a

discount, or to buy other products at a discounted price.

o Temporary price reductions - this is where the price of the product is reduced for a

period of time.

o Free gifts – free gifts are often enclosed with children’s food products.

o Bonus packs/Branded offers - this is where extra products are given at a lower price

than the combination of them. A highly effective method to increase sales.

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o Competitions - There can be many other forms of competitions.

o Sampling and demonstrations - Free sampling of the product to induce trial and show

the products in use. Common in food, perfumes etc

o Extra free – involves offers such as a 200 gram pack for the price of 150 gram pack.

o Loyalty card – offers discounts or free goods to regular customers.

Trade Promotional Tools or Techniques

Some of the tools could be as follows:

o Monetary incentives - giving trade discounts and free products, to induce more

purchase

o Joint advertising/promotions - Sharing advertising and other costs with the

middlemen

o Point of sales support - providing pas material to be displayed at the shelves

o Competitions and awards

o Business gifts

o Corporate hospitality - inviting them for sports meets and other entertainment

activities.

Public Relations

Building good relations with the company’s various publics by obtaining favorable publicity by building up a good “corporate image” and handling or heading off unfavorable rumors, stories and events.

Public Relations is therefore more wide ranging than marketing, which focuses on markets,

trade and customers. By communicating to other groups, public relations create an environment in which it is easier to conduct marketing. These publics are shown in Figure:

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An Organisation and its Publics

The Role, Impact and Tools of Public Relations Public relations can have a strong impact on public awareness at a much lower cost than advertising can. The company does not pay for the space or time in the media. Rather, it

pays for a staff to develop and circulate information and to manage events. Public relations tools or techniques used are as follows:

o Press releases: involves creating a news story or event that brings the product or

organisation to the public attention. o Press conferences: a launch ceremony for a new product or to announce any

changes in the organisation. o Publications: Annual reports, videos, brochures, magazines, company newsletters

o Public Service activities: Building and maintaining national or local community

relations

o Investor relations: Maintaining relationships with shareholders and others in the financial community.

o Lobbying: Building and maintaining relations with legislators and government

officials to influence legislation and regulation.

o Sponsorships: sponsoring sports events and cultural events

Organisation

Media

TV Press

Radio

Commercial

Customers Trade

Suppliers

Finance

Banks Shareholders

Fund Mangers

Public

Local Community

Pressure groups Opinion leaders

General Public

Government

Parliament Civil service

Local authorities

Employees

Staff Trade unions

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Personal Selling

Personal presentations by the firms sales force for the purpose of making sales and building customer relationships.

The Major Steps in the Selling Process As shown in Figure below, the selling process consists of seven major steps:

Major steps in the Selling Process

o Prospecting and Qualifying: The first step in the selling process is prospecting -

identifying qualified potential customers. Approaching the right potential customers is crucial to selling success. Salespeople also need to know how to qualify leads-that is, how to identify the good ones and screen out the poor ones. Prospects can be

qualified by looking at their purchasing power, volume of business, special needs, location, and possibilities for growth.

o Pre-approach: Before calling on a prospect, the salesperson should plan the sales

call: learn as much as possible about the organisation (what it needs, who is involved

in the buying) and its buyers (their characteristics and buying styles), determining the sales call objective, customer benefit program and sales presentation strategies.

o Approach: During the approach step, the salesperson should know how to meet and

greet the buyer and get the relationship off to a good start. This step involves the salesperson's appearance, opening lines, and the follow-up remarks. The opening lines

should be positive to build goodwill from the beginning of the relationship. (the first impression of the salesperson is critical to success)

o Presentation and Demonstration: During the presentation step of the selling

process, the salesperson tells the product "story" to the buyer, presenting customer benefits and showing how the product solves the customer's problems. The

salesperson could use product demonstrations, dramatisation, multimedia presentations etc.

Prospecting and

qualifying

Pre-Approach

Approach Presentation

And Demonstration

Follow-up

Closing

Handling

Objections

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o Handling Objections: Customers almost always have objections during the

presentation or when asked to place an order. The problem can be either logical or

psychological, and objections are often unspoken. In handling objections, the salesperson should use a positive approach, seek out hidden objections, asks the buyer to clarify any objections, take objections as opportunities to provide more information,

and turn the objections into reasons for buying. Every salesperson needs training in the skills of handling objections.

o Closing: After handling the prospect's objections, the salesperson now tries to close

the sale. Some salespeople do not get around to closing or do not handle it well. They

may lack confidence, feel guilty about asking for the order, or fail to recognize the right moment to close the sale. Salespeople should know how to recognise closing signals from the buyer, including physical actions, comments, and questions. For

example, the customer might sit forward and nod approvingly or ask about prices and credit terms. Salespeople can use one of several closing techniques. They can ask for the order, review points of agreement, offer to help write up the order, ask whether

the buyer wants this model or that one, or when the delivery should be made. o Follow-Up: The last step in the selling process. Servicing the customer after the sale

is necessary if the salesperson wants to ensure customer satisfaction and repeat business. Right after closing, the salesperson should complete any details on delivery

time, purchase terms, and other matters. The salesperson then should schedule a follow-up call when the initial order is received, to make sure there is proper installa-tion, instruction, and servicing and the customer is satisfied.

Direct Marketing

Direct Marketing is defined as follows:

Direct connections with carefully targeted individual consumers to both

obtain an immediate response and cultivate long term customer relationships.

Tools of Direct Marketing Direct marketing is the fastest growing sector of promotional activity. It now embraces a range of techniques, some traditional and some based upon new technologies.

The major forms of direct marketing are as follows:

o Direct Mail: a personally addressed “written offering” (letter and/or sales literature) with some form of response mechanism, sent to existing customers from an in-house

data base or mailing list. o E-Mail: messages sent via the internet from an e-mail database of customers. E-

mails can offer unique routine information, updates and information about new products: email addresses can be gather together via enquiries and contact

permissions at the company’s website.

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o Mobile phone text messaging (SMS): messages can be sent via a mobile phone to captive audience, catching them wherever they are. This form of marketing is still in its infancy, but with the proliferation of mobile phone usage it is likely to be very

significant, at least in terms of numbers reached.

o Direct response advertising: seeks ‘an immediate response from the consumer in

terms of purchase, or request for a brochure, or a visit to the retail outlet’. Direct response advertising may involve the traditional advertising in newspaper or magazine with a cut out response coupon; loose inserts with response coupons or

reply cards; direct response TV or radio advertisements, giving a call center number or website address to contact. (home shopping channels)

o Catalogue marketing: Direct marketing through print, CO-ROM, or electronic

catalogues that are mailed to selected customers, made available in retail outlets, or

presented online.

o Telemarketing and Call Centers: Telemarketing is the planned and controlled use of the telephone for sales and marketing opportunities. Unlike all other forms of direct marketing it allows for immediate two-way communication. A call centre is a

cost-effective way of providing a professionally trained response to customer callers and enquiries, for the purpose of sales, customer service, customer care or a contact point for direct response advertising.

Reasons for the Growth in Direct Marketing

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FACTORS AFFECTING THE CHOICE OF THE COMMUNICATION MIX Many factors will affect the choice of an appropriate communication or promotional mix. Some of the most important factors are as follows:

Target market/Customer type Target markets or more broadly the type of customer being targeted will affect the choice of the communications mix. This is most easily demonstrated if we consider the promotions mix for an industrial versus a consumer target market. For the industrial

customer it is more likely that personal selling will predominate in the promotional mix. This is because personal selling techniques are usually much more effective for industrial buyers as the products are often technical and the message can be tailored to the needs

of the buyer. In the consumer market, on the other hand, advertising is likely to predominate in the promotional mix. Personal selling will normally be confined only to more expensive consumer products. Sales promotion and direct mail, however, will also be useful in this

market, especially for encouraging brand switching, initial purchasing and in the case of direct mail, enquiries.

Characteristics and cost effectiveness of the Communication mix elements As implied in our discussion of the communicational mix in industrial versus consumer markets above, each of the promotional tools has its own characteristics and relative

advantages and disadvantages compared to the other promotional tools. This means that some tools are much more appropriate and hence cost-effective in achieving certain objectives or reaching certain target customers. So, for example, advertising is much more

appropriate where there are large numbers of geographically dispersed customers. It is, however, an impersonal form of promotion and therefore is inappropriate where customers require a high degree of personal contact and/or source credibility. Personal

selling, on the other hand, although expensive from the point of view of the cost of each sales person, can be a very cost-effective way of communicating with customers, especially where products are technical or complex, and where therefore the customer

requires clarification. Sales promotion is particularly useful for encouraging one-off purchasing and short-term interest in a product or service.

Product Life Cycle Concept As explained in Product Life cycle, promotional tools vary at different stages of the product life cycle. For example, at the introductory stage of the product life cycle, advertising may predominate in the promotional mix in order to develop awareness. In the maturity and

decline stages in contrast, emphasis on the promotional mix may switch to the use of sales promotion in order to try and extend the life and sales of a product.

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Stage in the AIDA process One of the most frequently used communication process model is the AIDA model. Marketers use this model effectively in taking the consumer through effective communication process in order to achieve its communication objectives. As shown in the

table below, at different stages, different communication mix elements could be used to be effective.

STAGE COMMUNICATION MIX ELEMENTS

Attention Advertising, Public Relations

Interest Advertising, Public Relations, Sales Promotion

Desire Advertising, Personal Selling, Sales Promotion

Action Personal Selling, Sales promotion, Direct Marketing

Push versus Pull Strategies

Marketers can choose from two basic promotion mix strategies: push promotion or pull promotion.

Figure below contrasts the two strategies. The relative emphasis on the specific promo-tional tools differs for push and pull strategies.

Push versus Pull Strategies

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A push strategy involves "pushing" the product through marketing channels to final consumers. The producer directs its marketing activities (primarily personal selling and trade promotions) toward channel members to induce them to carry the product and to

promote it to final consumers. Using a pull strategy, the producer directs its marketing activities (primarily advertising

and consumer promotions) toward final consumers to induce them to buy the product. If the pull strategy is effective, consumers will then demand the product by the brand name (for example Munchee Lemon Puff) from channel members, who will in turn demand it

from producers. Thus, under a pull strategy, consumer demand "pulls" the product through the channels.

COMMUNICATION MODELS The Communication Process Model

The communication process is an exchange of information between an information sender and an information receiver. The Figure below outlines how this information is exchanged.

The key elements of the communication process are described as follows and are applied to

an advertisement for a Hewlett-Packard (HP) multi-function colour laser printer in a business magazine.

The Communication Process Model

SENDER

Encoding

Media

Decoding

RECEIVER Message

Noise

Response Feedback

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Sender: An individual or an organisation sending the message to another party. Also known as the originator of the message. ( Here the organisation HP)

Encoding: The process of putting thoughts into words, diagrams, actions and symbolic

forms (HP’s advertising agency assembles words/pictures and illustrates into an

advertisement that will convey the planned message/idea.

Message: The idea that the sender transmits and try’s to convey ( The actual HP multi-

function colour laser printer advertisement in the magazine)

Media(medium): The communication channels through which the message moves

from the sender to the receiver (the business magazine chosen by HP)

Decoding: The process of interpretation or assigning meaning to the symbols encoded

by the sender ( After reading the advert in the magazine how the consumer interprets the words and illustrations used)

Receiver: An individual or organisation who hears or sees the message. Also known as

the target audience. (The person who sees and reads the HP advertisement in the

business magazine)

Response: The reaction of the receiver after being exposed to the message ( people

responding after reading the advertisement by visiting the HP website, or calling the HP customer care or actually visiting the outlets and purchasing the printer)

Feedback: The part of the receiver’s response communicated back to the sender (HP

research shows that most people remembers the advert (re-call), or they write to HP

either praising or criticizing the advertisement or about HP products)

Noise: The unplanned static or distortion during the communication process which

results in the receiver getting a different message ( the person who is reading the magazine could be distracted either to a television program or receiving a call)

THE AIDA MODEL Another most frequently used communication process model is the AIDA model and was essentially developed to aid the sales force in their selling process. However, marketers use this model effectively in taking the consumer through effective communication process in

order to achieve its communication objectives. AIDA stands for:

ATTENTION INTERST DESIRE ACTION

Attention: Getting attention is the first job in a communication process. A large

headline, computer animations, shocking statements, attractive models and special effects may do the trick. Advertising and Public relations are very useful tools in creating attention.

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Interest: Creating and holding interest is a difficult task. Once the customer is exposed to the message he has to contact the organisation in order to get more information. Advertising materials, PR campaigns, special offers, the message and the sales force all

contribute in the process of creating interest.

Desire: The communication must convince the customers that the product can meet their expectations and satisfy their needs. The communication should focus on a unique selling proposition (USP) which helps to differentiate the product offerings and position

the product as offering a superior value and benefits than its competitors. Special offers, sales demonstrations would help to create this.

Action: Getting the customer’s action is the final requirement. This is possible when he

is persuaded or convinced to purchase the product. Closing the sale techniques, sales

promotion offers to be redeemed before the time frame could lead to action.

Establishing the Communication Budget The four common methods are as follows: Affordable Method: They set the budget at the level they think the company can

afford. Unfortunately this method of setting the budget completely ignores the effects of promotion as an investment and the immediate impact of communication on sales

volume. Percentage-of-Sales-Method: Setting the budget at a certain percentage of current

or forecasted sales or as a percentage of the unit sales price. It is simple to use and helps management to think about the relationship between promotion spending, selling

price and profit per unit. However, this method views sales as the determiner of promotion rather than as the result.

Competitive-Parity Method: Setting the budget to match competitor’s outlays. They

monitor competitor’s advertising or get industry communication spending estimates from relevant trade associations and then set the budget based on industry average. The major disadvantage is that you are driven by the competitors rather than you

driving the market. Objective-and Task Method: This is the most logical budget setting method. The

organisation sets its budget based on what it wants to accomplish with communications. The budgeting method entails:

1. Defining specific communication objectives (desired response expected)

2. Determining the tasks that must be performed to achieve these objectives

3. Estimating the costs of each of the above tasks identified

4. The total sum of these costs is the proposed total communication budget.

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List of References

Kotler, Philip and Gray, Armstrong, (2008) “Principles of Marketing” Prentice Hall

Kotler, Philip and Gray, Armstrong, and Y, Agnihotri, Prafulla and ul Haque, Eshan (2013) “Principles of Marketing – A south Asian Perspective” Prentice Hall

Sylvester, GS, (2014) “Preliminary Certificate in Marketing” Study text by Sri

Lanka Institute of Marketing