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HADM 3760 Hospitality Marketing

Jack Morris, Spring 2016

CHAPTER 13
Promoting Products: Communication
and Promotion Policy and Advertising
CHAPTER OVERVIEW
A companys total marketing communications program, called its promotion mix, consists of a
specific blend of advertising, sales promotion, public relations and personal selling to achieve
advertising and marketing objectives. Within these categories are specific tools, such as sales
presentations, point-of-purchase displays, trade shows, brochures, press kits, contests and coupons.
The promotion mix must be coordinated with other elements of the marketing mix. This chapter
looks at two questions: What are the major steps in developing effective marketing communication?
How should the promotion budget and mix be determined?
The next topic is advertising. The chapter explains the major decisions necessary in advertising,
including setting objectives and budget; creating and evaluating the advertising message; selecting
advertising media based upon research frequency, and impact; and finally, choosing media types,
vehicles, and timing.
CHAPTER OUTLINE
I. Promotion Mix - A companys total marketing program consisting of advertising, sales promotion,
public relations and personal selling.
A. Advertising is any paid form of non personal presentation and promotion of ideas, goods
or services by an identified sponsor. This includes print, broadcast, outdoor, and other forms
of advertising.
B. Sales promotions are short-term incentives to encourage purchase or sales of a product or
service. This will include point-of-purchase displays, premiums, discounts, coupons,
specialty advertising, and demonstrations.
C. Public Relations is the process of building good relations with the companys various
publics by obtaining favorable publicity, developing a good corporate image and handling
or heading off unfavorable rumors, stories and events. Press conferences, press releases,
magazine interviews and restaurant reviews are examples of public relations.
D. Personal selling is the oral presentation with one or more prospective purchasers for the
purpose of making sales. This may be in front of auditoriums of people, or a round table of
executives, a one-on-one to a prospective customer, or a group presentation to the same
customer.
Cont.

II. Integrated Marketing Communications


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A. As we move into the twenty-first century, marketing managers face some new marketing
communications realities.
B. Two major factors are changing the face of todays marketing communi-cations.
1. First, as mass markets have fragmented, marketers are shifting away from mass
marketing. More and more, they are developing focused marketing programs
designed to build closer relationships with customers in more
narrowly defined
micromarkets.
2. Second, vast improvements in information technology are speeding the movement
toward segmented marketing.
C. Given this new communications environment, marketers must rethink the roles of various
media and promotion mix tools.
1. Market fragmentation has resulted in media fragmentationin an explosion of
more focused media that better match todays targeting strategies.
2. In all, companies are doing less broadcasting and more narrowcasting.
3. Marketers are losing confidence in television advertising and focusing their efforts
on more targeted, cost-effective, interactive, and engaging media.
D. The Need for Integrated Marketing Communications. Customers dont distinguish
between message sources the way marketers do.
1. In the consumers mind, advertising messages from different media and different
promotional approaches all become part of a single message about the
company.
2. Conflicting messages from these different sources can result in confused company
images and brand positions.
E. Companies fail to integrate their various communications channels. Mass-media
advertisements say one thing, while a price promotion sends a different signal and a product
label creates still another message. Company sales literature says something altogether
different and the companys Web site seems out of sync with everything else.
F. The problem is that these communications often come from different company sources.
- Recently, such functional separation has been a problem for companies and their
Internet communications.
G. All the communication tools must be carefully integrated into the broader marketing
communications mix. Today, the best bet is to wed the emotional pitch and impact of
traditional brand marketing with the interactivity and real service offered online.
H. Today, more companies are adopting the concept of integrated marketing communications
(IMC).
1. Under this concept, the company carefully integrates and coordinates its many
communications channels to deliver a clear, consistent, and compelling
message
about the organization and its brands.
2. IMC builds brand identity and strong customer relationships by tying together all
of the companys messages and images. Brand messages and positioning are
coordinated across all communication activities and media.
3. IMC calls for recognizing all contact points where the customer may encounter the
company, its products, and its brands. Each brand contact will deliver a
message,
whether good, bad, or indifferent. The company must strive to deliver
a consistent
and positive message with each contact.

Cont.
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III. Steps in Developing Effective Communications: Communication is an interactive dialogue


between the company and its customers that takes place during the pre-selling, selling, consuming,
and post consuming stages. Companies can now communicate through traditional media
(newspapers, radio, telephone, television), as well as through newer media forms (computers, fax
machines, cellular phones, and pagers.) By decreasing communication costs, the new technologies
have encouraged more companies to move from mass communications to more targeted
communication and one-to-one dialogue.
There are six steps in developing effective communications.
1. Identifying the target audience: the audience may be potential buyers or current users,
those who make the buying decision, or those who influence it. For example, bed and
breakfast owners found that the most important communication channels were brochures
and guidebooks.
2. Determine the communication objectives: Once a target audience has been defined, the
marketing communicator must decide what response is sought. The target audience may be in
any of six buyer readiness states: awareness, knowledge, liking, preference, conviction, or
purchases, which are shown in Figure 13.3
(a) Awareness of the product can be in several stages and will take time to establish.
Awareness must be a continuous process to solicit new customers.
(b) Knowledge follows the awareness stage and is the connection of the advertising to
the branded product or service. The customer must know that such product will serve
particular needs.
(c) Liking is the third stage. Here the message of the advertising is to create an
acceptance of the product to the evoked set of responses. For example, if a
customer
were considering a steakhouse for dinner, the object of the advertising
might be for
the restaurant to become one of the options for this customer.
(d) Preference would be the next advertising objective. The customer may like the
product but not prefer it. Here the producer will strive to identify those areas
where
its competition is preferred and then promote its advantages to build
preference.
(e) Conviction is closely linked with purchase. To develop conviction firms must give
consumers a reason to purchase the product or make plans to purchase the product
now.
(f) Purchase is the ultimate objective. The audience may have a conviction but may
wait for more information or plan to act later. The marketing communicator
needs to
know where the target audience stands in relation to the product and
to what state it
needs to be moved.
3. Design the message: Having defined the desired audience response, the communicator
turns to developing an effective message. Ideally, the message should get attention, hold
interest, arouse desire, and obtain action (a framework known as the AIDA model). The
marketing communicator must solve three problems: what to say (message content), how to
say it logically (message structure), and how to say it symbolically (message format), and
how to deliver the message (message source).
Cont.
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message
last.

a. Message content: there are three types of appeals: rational, emotional, and moral.
b. Message structure: there are three message structure issues: (1) The first is whether
to draw a conclusion or leave it to the audience (2) The second message structure
issue is whether to present a one- or two-sided argument. (3) The third
structure issue is whether to present the strongest arguments first or

c. Message format: (1) print considerations include using novelty and contrast, eyecatching pictures, effective headlines, distinctive formats, message size and position,
color, shape, and movement; (2) TV or personal encounter considerations include the
above as well as facial expressions, body language, gestures, hair and posture. (3)
Message source - Attractive sources achieve higher attention and recall. Celebrities
are likely to be effective when they personify a key product attribute.
4. Select the communication channels:
a. Personal communication channels require a two-way relationship. Face-to-face,
over the telephone and even by mail communications, these relationships
allow for
personal addressing and feedback.
1
* Personal influence carries great weight for products that are expensive or
risky.
2
* Companies can take several steps to put personal communication channels
to work by selling their products to well-known people or companies,
who
may in turn influence others to buy. Or they can create opinion
leaders and
manage word-of-mouth.
b. Non personal communication channels affect buyers directly and include media,
atmosphere, and events.
1
* Media Print media (newspapers, magazines, and direct mail), broadcast
media (radio and TV) and display media (billboards, signs, posters).
2
* Atmosphere - Designed environments that create or reinforce the buyers
learning toward purchasing a product, such as hotel and restaurant
lobbies.
3
* Events - Occurrences staged to communicate messages to target audiences.
For example, like press conferences and public tours staged to
communicate
messages to the target audience.
4
* Non personal communication affects buyers in a two-step flow. First, flow
from television, magazines, and other mass media to opinion leaders
and then
to the less active sections of the population.
5. Measure the communications results: Measure the communications results: The
communicator must evaluate the effect of the message on the target audience. Figure 13-4
shows an example of feedback measurement. The following are some examples the
communicator can use to measure the results, such as whether they remember the message,
how many times they saw it, what points they recall, how they felt about the message, and
their past and present attitudes toward the product and company, how many people bought a
product, talked to others about it, or visited the store. See Sheraton Hotels and Resorts,
Measure the Communications Results.
6. Select the message sources: Messages delivered by highly credible sources are persuasive.
Three factors make a source credible: expertise, trustworthiness, and likeability.
Cont.
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IV. Establish the Total Communications Budget:


There are four common methods of setting the total promotion budget.
1. Affordable Method: They set a promotion budget at what they think the company can
afford. This method of setting budgets completely ignores the effect of promotion on sales
volume.
2. Percentage-of-Sales Method: when the company sets the promotion budget at a certain
percentage of current or forecasted sales, or a percentage of the sales price. The advantages
are that it helps management to think about the relationship between promotion spending,
selling price, and profit per unit. Additionally, it supposedly creates competitive stability. The
disadvantages are it wrongly views sales as the cause of promotion rather than the result. It
also does not provide a basis for choosing a specific percentage, except past actions or what
competitors are doing.
3. Competitive-Parity Method: Setting promotion budgets which match the competitions
estimated spending. Supporting arguments include a collective wisdom justification for the
rationalization, and a belief that a level playing field will reduce or prevent promotion wars.
Neither holds up to reality.
4. Objective-and-Task Method: While the most difficult method, it is the most effective,
forcing the company to set its promotion budget according to what it wants to accomplish by
(a) Defining specific objectives; (b) Determining tasks that must be performed to achieve
these objectives; (c) Estimating the costs of performing them.
V. Managing and Coordinating Integrated Marketing Communications
Companies must now divide the total promotion budget among the major promotional tools:
advertising, personal selling, sales promotion, and public relations. It must carefully blend the
promotion tools into a coordinated promotion mix that will achieve its advertising and marketing
objectives.
A. The nature of each promotion tool
1. Advertising can be used to build a long-term image (such as Four Seasons or
McDonalds ads) and to stimulate quick sales (Embassy Suites promoted the
Fourth
of July holiday).
a. Advantages: Advertised product is standard, legitimate, publicly
understood, and accepted. Sellers can repeat a message many times.
b. Disadvantages: Impersonal, one-way communication, and very costly.
2. Personal selling allows unmatched opportunities to develop the long-term
customer. It is, however, considered the most costly of all promotional tools
costing
firms up to three times as much as an advertising campaign.
3. Sales promotions offer strong incentives to purchase by providing inducements or
contributions that give additional value to customers. For example, coupons,
contests,
cents-off deals, premiums, and others. They attract attention and provide
information
and incentives. Effective for short-term sales, it is not considered
effective in building
a long-term customer base.
4. Public Relations: News stories, features, and events seem more real and
believable to readers than do ads. Thus, public relations provide credibility to persons
who avoid salespeople and advertisements.
Cont.

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5. Direct Marketing: Although there are many forms of direct marketingtelephone


marketing, direct mail, online marketing, and othersthey all share four
distinctive
characteristics.
a. Direct marketing is nonpublic: The message is normally directed to a
specific person.
b. Direct marketing is immediate and customized: Messages can be prepared
very quickly and can be tailored to appeal to specific consumers.
c. Finally, direct marketing is interactive: It allows a dialogue between the
marketing team and the consumer, and messages can be altered
depending on
the consumers response. Thus, direct marketing is well suited
to highly
targeted marketing efforts and to building one-to-one
customer relationships.
B. Factors in setting the promotion mix
1. Type of product and market: When hospitality firms market to consumer markets,
they spend more on advertising and sales promotion and often very little on
personal
selling. Hospitality firms targeting commercial organizations spend
more on personal
selling.
2. Push vs. Pull strategy: Figure 13.5 illustrates these two strategies. A push strategy
involves pushing the product through distribution channels to final
consumers. A
push strategy provides an incentive for channel members to promote
the product to
their customers or push the product through the distribution channels.
For example,
Dollar Rent-A-Car offered travel agents a 15% commission instead of
10%, to
persuade them to order its brand for clients. Using a pull strategy, a
company directs
its marketing activities (primarily, advertising and consumer
promotion) toward final
consumers to induce them to buy the product. For
example, Sheraton placed an ad for
its Hawaiian properties in the Phoenix, Arizona paper
to stimulate consumers
demand. Interested readers will pull the product
through the channel.
3. Buyer readiness state: Different tools perform different objectives better.
Advertising and public relations promote awareness and knowledge. Personal
selling
is much more effective at customer liking, preferences, and conviction.
Closing the
sale is accomplished primarily with sales calls and sales promotion.
4. Product life cycle stage: The effects of different promotion tools vary with stages
of the product cycle stage.
0
- The introduction stage: advertising, public relations, and sales promotion.
1
- The growth stage: advertising and public relations
2
- The mature stage: sales promotion and advertising
3
- The decline stage: sales promotion.
VI. Advertising - Defined as any paid form of non personal presentation and promotion of ideas,
goods, or services by an identified sponsor. Marketing management must make the following five
important decisions in developing an advertising program (1) setting the objectives; (2) setting the
advertising budget; (3) message decision; (4) media decision; (5) campaign evaluations.
Cont.

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A. Setting the Objectives:


1. Objectives should be based on specific information about the target market,
positioning, and market mix and may be classified into three categories.
0
a. Informative advertising introduces a new product category or builds
primary demand. For example, when an airline opens a new route, its
management often runs full-page advertisements informing
the market about
the new service.
1
b. Persuasive advertising is used as competition increases and a companys
objective becomes building selective demand. For example, Burger
King used
direct comparison advertising against McDonalds.
2
c. Reminder advertising is used for mature products because it keeps
consumers thinking about the product.
2. Advertising is not a substitute for poor products: For an advertising campaign to
create long-term sales, the product advertised must create satisfied customers.
Managers must first be sure that the property can live up to the promises their
advertising makes. If the property or service is inconsistent with the
claims made, the
money managers spend to generate additional business will
probably do little more
than increase the number of dissatisfied guests.
3. Deal Based Advertising: Two for one, free dessert, 15% off, coupons, etc.
B. Setting the Advertising Budget: Some specific factors that should be considered when
setting a budget:
Company-specific factors:
1
* Stage of the products life cycle: New products typically need large advertising
budgets to build awareness and gain consumer trial. Mature brands usually
require
lower budgets as a ratio to sales.
2
* Competition and clutter: In a market with many competitors and heavy advertising
support, a brand must be advertised more frequently to be heard above the
noise of
the market.
3
* Market share: High-market-share brands usually require greater advertising
expenditures as a percentage of sales than do low-share brands.
4
* Advertising frequency: Larger advertising budgets are essential when many
repetitions are needed to present the brands message.
5
* Product differentiation: A brand that closely resembles others in its product class
(pizza, limited-service hotels, air travel) requires heavy advertising to set it
apart.
General factors:
1
* Strategic versus tactical budget: Another budget decision is deciding how much
will be spent for strategic advertising and how much will be spent on tactical
advertising. Strategic advertising deals with building brand awareness
and brand
image. Tactical advertising deals with sales promotions and often
includes price
discounts.
2
* Overall promotion budget: To gain synergy between the different elements of the
promotional mix, money should be available for training employees about
new
promotions, in-house sales promotion materials, collateral material, and
public
relations.
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Cont.
3
* Consistency: The advertising budget should be consistent. Managers should not
consider the advertising budget to be discretionary and cut it when the times
are
tough.
4
* Opportunity to stretch the budget: A trade-out can be a good way of getting
advertising without using cash. For instance, hospitality companies can trade
its
rooms, food, or travel with the media for free advertising. Additionally,
hospitality
companies can expand the budget through cooperative advertising.
For example,
cruise lines and credit card companies getting together to pay for the
ads.
C. Message Decision: advertising can succeed only if its message gains attention and
communicates well. Developing a creative strategy require three messages steps: generation,
evaluation and selection, and execution.
1
* Message generation must be effective within the target audience and effect the
response intended. Sometimes this will be to create tangibility for the service
product,
depict quality, define position, enhance differentiation, or any number of
specific
objectives. Managers have the responsibilities of preventing the
messages that fail to
motivate customers or that offend employees.
2
* Message evaluation and selection can help lend credence in an industry
(advertising) that is sometimes less than credible. A meaningful, distinctive
and
believable message can increase the acceptability of the message and firm.
3
* Message execution is critical to enhancing the impact of the advertisement. What is
said, how it is said, the style, tone, words, and format-- the message
execution-directly relate to the impact of the message on the consumer. There
are several
execution styles: slice of life, lifestyle, fantasy, mood or image,
musical, personality,
technical expertise, scientific evidence, testimonial evidence.
D. Media Decision- Four Major Steps
1. Deciding on Reach, Frequency, and Impact: Generally, the higher reach, higher
frequency, and more impact that is sought by the advertiser, the larger the
advertising
budget will have to be.
1
* Reach is a measure of the percentage of people in the total target market
who are exposed to the specific ad campaign during a given period of
time.
2
* Frequency is a measure of how many times the average person in the target
market is exposed to the message.
1
* Impact is the qualitative value of message exposure through a given
medium.
2. Choosing Among Major Media Types
1
* In order of advertising volume, the major media types are: newspapers,
television, direct mail, radio, magazine, and outdoor media.
2
* Factors to consider when choosing media types include media habits of
target customers, the nature of the product, and cost.
3. Selecting Specific Media Vehicles
1
* The media planner must now choose the best specific media vehicles within
each general media type. For example, if advertising is placed in magazines,
the media planner must look up circulation figures and the costs of
different
ad sizes, color options, ad positions, and frequencies for
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various specific
editorial focus, and
2

3
media

magazines, credibility, status, reproduction quality,


advertising submission deadlines.
* Media planners also compute the cost per 1000 persons reached by a
vehicle and the costs of producing ads for different media.
* The media planner must thus balance media cost measures against several
media impact factors. First, costs should be balanced against the
vehicles audience quality. Second, the media planner should consider
audience attention. Third, the planner assesses the vehicles editorial

quality.
4. Deciding on media timing: The advertiser must also decide how to schedule
advertising over the course of a year.
1
* Continuity means scheduling ads evenly within a given period.
2
* Pulsing means scheduling ads unevenly over a given period.
3
* Road Blocking: Advertisers can sometimes use a tactic known as road
blocking to help ensure that an intended audience receives the
advertising
message.
E. Campaign Evaluation
1
* Measuring the communication effect
(1) Pre testinga. Direct rating is where a consumer panel is exposed to alternative ads and is
then asked to rate them. Direct ratings show how well the ads attract
attention
and how they affect consumers.
b. Portfolio tests are when consumers are asked to recall - aided or unaided all ads and their contents after they have been exposed to a whole
portfolio.
c. Laboratory tests use equipment to measure consumers physiological
reactions to specific ads, such as heartbeat, blood pressure, pupil
dilation, and
perspiration.
(2) Post testinga. Recall tests ask people who have been exposed to magazines or television
programs to recall everything they can about the advertisers and
products they
saw. Recall scores indicate the ads power to be noticed and retained.
b. Recognition tests are used by researchers who ask people exposed to media
to identify the advertisements they have seen. Recognition scores can be used
to assess the ads impact in different market segments and to compare
the
companys ads with those of competitors.
Measuring the sales effect: attempts to separate the effect of advertising from other
elements of the promotion mix. Achieved by comparing past sales with past advertising
expenditures and through experiments.
Measuring the awareness effect: if the objective of advertising is to inform, then conducting
a pre and post-test of the target markets awareness of the product or brand is often used as a
method of measuring the effect of an advertising campaign.
2

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