Chapter Eleven, A

Marketing Communications Basics, Advertising, and Sales Promotion

Definitions
Marketing communications - is simply all forms of transfer of information between organizations and markets. Promotion - all forms of persuasive communications with markets.

Categories of Promotional Tools

Advertising - paid presentation of information via the mass media. Publicity - non-paid presentation of information via mass media. Sales promotions - various marketing activities designed to stimulate short term behavioral response.

Categories of Promotional Tools

Point of purchase communications various activities designed to influence customers at point and time of purchase decision. Sponsorship marketing - associating a company with a particular event or activity Personal selling - personal communications between sellers and buyers.

Developing an integrated promotional strategy

Review marketing objectives. Decide on promotional tools to use. Develop objectives for each promotional tool. Develop action plan for each promotional tool. Implement action plan for each promotional tool and measure response.

Basic Communications Model

Sender Sender Encodes Message Medium Receiver Decodes Message Receiver

NOISE

FEEDBACK

Promotion Budget
This is same process as development of the marketing budget, and generally should be: Based on objective and task approach to budgeting. Affordability.

Concluding comments
With this background we are now going to go in the details of:
Development of advertising strategy Development of sales promotions directed towards: The trade End users Assessment and evaluation of these promotion tools.

Role of Advertising in Promotion Strategy

Functions performed by advertising :

Informing Persuading Reminding

Developing an Advertising Strategy

Marketing Strategy 1. Objectives 2. Budget 3. Blend of Marketing tools to be used.

Promotion Strategy 1. Objectives 2. Budget 3. Blend of Marketing tools to be used.

Developing an Advertising Strategy

Advertising Strategy 1. Objectives 2. Budget

Creative Strategy

Media Strategy

Creative (or Message) Strategy

The Copy Statement Message strategy generally begins with a copy strategy statement that specifies the purpose, objectives, content, support, and tone of the desired ad.

Guidelines for developing copy strategy statement

Understand the fundamental marketing goal Determine the basic product benefits to be communicated. Determine the inhibitors to consumer. acceptance of communication. Marshal supporting facts. Decide upon a creative tactic to communicate the basic product benefit.

Role of Creative Strategy

Provide guidance for creation of advertising messages. To be effective, advertising messages must: Be integrated with other promotional activities Must take the customers perspective. Must break through the advertising clutter Be persuasive and free of deception. Make the product the star of the ad.

Concluding Comments on Creative Strategy

Most marketers will have actual creation of ad done by specialists such as ad agencies.
Our responsibility as marketing managers: Provide guidance for ad development in the form of clear objectives Make sure that our agency produces ad that will attain objectives.

Advertising Management and Media Strategy

The message or creative strategy focuses on how we develop a message most likely to attain our communication goals. The media strategy focuses on how we deliver our message so that the target audience is the one to receive our message.

The Media Planning Process

Target Audience Selection Selection of a primary

medium:
Creative tactics employed Coverage of target audience Fit within our budget

Selection of Secondary Medium

The Media Planning Process

Develop a Minimum Cost

Media Schedule.
This must attain media objectives

of gross exposure delivery, reach and average frequency of exposure.

The Media Planning Process

Media vehicle - a specific printing of a magazine or airing of broadcast media. Media schedule - all vehicles used to convey a specific message to our target audience during a given planning period. Reach - the proportion, percentage or number of unique members of our target audience exposed to one or more vehicles.

The Media Planning Process

Gross exposures - percentage of audience exposures delivered by our media schedule without duplication. Average frequency of exposure average number of vehicles to which the typical member of the audience is exposed.
Gross Exposures (GRP) = R x F Where R is reach and F is frequency

Example of Media Planning

Suppose we are going to run an ad weekly for 4 weeks on each of the following TV programs. Our target is the adult audience.
Program A B C D Adult Rating* 30 35 40 25

Example of Media Planning

GRP = (30)(4) + (35)(4) + (40)(4) + (25)(4) = 520 GRPs for four weeks. Now we determine that this schedule will reach 60% of adults. F = 520 = 8.7 60 On average, people will be exposed to 8.7 of vehicles carrying our message.

Comments on Development of Media Schedule

Whether we want a schedule that is heavy on reach or heavy on frequency depends on what were trying to accomplish. Sometimes we want both - for example with the introduction of a new product.

Concluding comments on Media Strategy

Development of actual media schedule is generally done by agencies. However, we want to review proposed media schedules and ask:
Are we getting sufficient reach or audience coverage? Is the frequency of exposure sufficient to ensure that message is processed? Are there lower cost alternatives?

Role and Nature of Sales Promotions

Sales promotion is use of an incentive by marketers to induce defined customer groups to perform specific actions. Role of sales promotions has changed dramatically from that of a minor component of the promotion mix to a major component of promotion mix.

Push-Pull Strategies
Pull Strategies Incentives Targeted for End Users Marketer Trade Intermediaries and their marketing organizations End Users (Consumers) Push Strategies Incentives Targeted for Trade Intermediaries and their marketing organizations

Pros and Cons of Sales Promotions

Pros
Sales promotion is an extremely effective tool for stimulating behavioral response.

Cons
Frequent sales promotions can cause customers to perceive a brand as a deal brand. Can cause customers to become more deal oriented in the long run.

Recent Trends
Retailers attempting to reduce frequency of sales. Marketers converting to everyday low prices to:
Reduce customer expectations of product being sold on deal. Prevent customers from stockpiling dealt products.

Trade Directed Sales Promotions

Nature and Objectives of Trade Directed Sales Promotions: Theyre for the purpose of affecting:
Stocking. Display. Attention to product by trade members marketing activities.

Trade Directed Sales Promotions

Most frequent objectives of trade sales promotions are to:
Facilitate new product introductions by ensuring product availability and obtaining favorable display. Limit competitors access to shelf space

Trade Directed Sales Promotions

Most

frequent objectives of trade sales promotions are to:

Move a product whose sales season is coming to an end. Obtain more favorable display of existing products. Counter competitors promotional efforts. Increase inventory turnover.

Keys to successful Trade Sales Promotions

Provision of a desirable incentive Timing - have to consider
Sales seasonality Other promotional activities

Ease of use for trade intermediaries. Having fast and measurable results. Having a favorable and visible impact on trade performance.

Types of Trade Promotions

Selection depends on:
Our objectives. Our budget. Trade tolerance and responsiveness to particular promotions. Marketers ability to choose to participate (or not) in a particular promotion.

Frequently used trade sales promotions

Trade allowances - come in a variety of forms but in general are a price reduction or direct financial reward.
Buying allowances Slotting allowances

Co-op advertising - marketer pays part (sometimes all) trade intermediaries advertising cost for featuring their brand prominently.

Frequently used trade sales promotions

Training programs - products that require active sales effort at the point of sale often require marketer to conduct training for trade intermediaries sales forces and to reward them for successful sales efforts.

Trade shows
For some industries, the majority of sales are made at trade shows:
Great opportunity for competitive intelligence gathering. Good for developing, maintaining and building customer relations. Good for introducing new products and obtaining market feedback.

Consumer Directed Sales Promotions

Rewards/incentives for consumer sales promotions are either:
Immediate Delayed

General experience is that immediate rewards are more likely to produce consumer response than delayed rewards.

A Classification of Consumer Sales Promotions

Marketer Objectives Consumer Reward Trial Impact Brand Franchise Maintenance and/or Consumer Loading Price offs Bonus packs In on and near pack coupons In and on-pack coupons Refunds and rebates Image Reinforcement

Immediate

Delayed

Sampling Instant coupons Shelf delivered coupons Media and Mail Free in-mail premiums. Scanner delivered coupons.

Self liquidating premiums Contests and sweepstakes

Evaluation of Mass media Promotions

Before-after tests of measures of customers decision processes which advertising was designed to affect:
For consumer promotions, we need to study promotion targets and measure responses to promotion. For trade promotions, we need to study trade promotion targets and measure responses to promotion.

Evaluation of Mass Media Promotions

Monitoring over time the sales (units and dollars) of products by trade intermediary type and in total. Monitoring over time competitor promotional activities during time period of implementation of our promotional strategy.