Topic 8: Marketing promotions

Question 1

Define the five promotion mix tools for communicating customer value.

Answer 1

A company’s total promotion mix – also called its marketing communications mix – consists of the specific blend of advertising, personal selling, sales promotion, public relations, and direct and digital marketing tools that the company uses to engage consumers, persuasively communicate customer value, and build customer relationships.

• Advertising includes any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Includes broadcast, print, online, mobile, outdoors, etc.
• In contrast, public relations focuses on building good relations with the company’s various publics. Includes press releases, sponsorships, events, and Web pages.
• Personal selling is personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships. Includes sales presentations, trade shows, and incentive programs.
• Firms use sales promotion to provide short-term incentives to encourage the purchase or sale of a product or service. Includes discounts, coupons, displays, and demonstrations.
• Finally, firms seeking immediate response from targeted individual customers use direct and digital marketing tools to engage directly with customers and cultivate relationships with them. Includes direct mail, catalogs, online and social media, mobile marketing, and more.

Question 2

Discuss the changing communications landscape and the need for integrated marketing communications.

Answer 2

The explosive developments in communications technology and changes in marketer and customer communication strategies have had a dramatic impact on marketing communications. Advertisers are now adding a broad selection of more-specialized and highly targeted media and content – including online, mobile, and social media – to reach smaller customer segments with more-personalized, interactive messages. As they adopt richer but more fragmented media and promotion mixes to reach their diverse markets, they risk creating a communications hodgepodge for consumers.

To prevent this, companies are adopting the concept of integrated marketing communications (IMC). Guided by an overall IMC strategy, the company works out the roles that the various promotional tools and marketing content will play and the extent to which each will be used. It carefully coordinates the promotional activities and the timing of when major campaigns take place.

Question 3

What are the four major types of media? POES channels.

Answer 3

1. Paid media – promotional channels paid for by the marketer, including traditional media (such as TV, radio, print, or outdoor) and online and digital media (paid search ads, Web and social media display ads, mobile ads, or e-mail marketing).
2. Owned media – promotional channels owned and controlled by the company, including company Web sites, corporate blogs, owned social media pages, proprietary brand communities, sales forces, and events.
3. Earned media – PR media channels, such as television, newspapers, blogs, online video sites, and other media not directly paid for or controlled by the marketer but that include the content because of viewer, reader, or user interest.
4. Shared media – media shared by consumers with other consumers, such as social media, blogs, mobile media, and viral channels, as well as traditional word-of-mouth.

Question 4

Outline the communication process and the steps in developing effective marketing communications.

Answer 4

The communication process involves nine elements: two major parties (sender, receiver), two communication tools (message, media), four communication functions (encoding, decoding, response, and feedback), and noise. To communicate effectively, marketers must understand how these elements combine to communicate value to target customers.

1. In preparing marketing communications, the communicator’s first task is to identify the target audience and its characteristics.
2. Next, the communicator has to determine the communication objectives and define the response sought, whether it be awareness, knowledge, liking, preference, conviction, or purchase.
3. Then a message should be constructed with an effective content and structure. Ideally, the message should get attention, hold interest, arouse desire, and obtain action (a framework known as the AIDA model). When putting a message together, the marketing communicator must decide what to say (message content) and how to say it (message structure and format). The marketer has to figure out an appeal or theme that will produce the desired response. There are three types of appeals: rational, emotional, and moral.
   
   1. Rational appeals relate to the audience’s self-interest. They show that the product will produce the desired benefits.
   2. Emotional appeals attempt to stir up either negative or positive emotions that can motivate purchase.
   3. Moral appeals are directed to an audience’s sense of what is “right” and “proper.” They are often used to urge people to support social causes.

Marketers must also decide how to handle three message structure issues.

1. The first is whether to draw a conclusion or leave it to the audience. Research suggests that, in many cases, rather than drawing a conclusion, the advertiser is better off asking questions and letting buyers come to their own conclusions.
2. The second message structure issue is whether to present the strongest arguments first or last. Presenting them first gets strong attention but may lead to an anticlimactic ending.
3. The third message structure issue is whether to present a one-sided argument (mentioning only the product’s strengths) or a two-sided argument (touting the product’s strengths while also admitting its shortcomings). The marketing communicator also needs a strong format for the message.
4. The communicator must now select the channels of communication. There are two broad types of communication channels: personal and nonpersonal.
   
   1. In personal communication channels, two or more people communicate directly with each other. They might communicate face to face, on the phone, via mail or e-mail, or even through texting or an Internet chat. Personal communication channels are effective because they allow for personal addressing and feedback.
   2. Nonpersonal communication channels are media that carry messages without personal contact or feedback. They include major media, atmospheres, and events. Major media include print media (newspapers, magazines, direct mail), broadcast media (television, radio), display media (billboards, signs, posters), and online media (e-mail and company Web sites). Atmospheres are designed environments that create or reinforce the buyer’s leanings toward buying a product. Thus, lawyers’ offices and banks are designed to communicate confidence and other qualities that might be valued by clients. Events are staged occurrences that communicate messages to target audiences. For example, public relations departments arrange grand openings, shows and exhibits, public tours, and other events.
5. The communicator must find highly credible sources to deliver messages.
6. Finally, the communicator must collect feedback by watching how much of the market becomes aware, tries the product, and is satisfied in the process.

Question 5

What is Integrated marketing communications (IMC)?

Answer 5

Under this concept, the company carefully integrates and coordinates the company’s many communications channels to deliver a clear, consistent, and compelling message about the organization and its products.

Question 6

What are the buyer-readiness stages?

Answer 6

These are the stages consumers normally pass through on their way to a purchase: awareness, knowledge, liking, preference, conviction, and, finally, the actual purchase.

Question 7

Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix.

Answer 7

The company must determine how much to spend for promotion. The most popular approaches are to spend what the company can afford, use a percentage of sales, base promotion on competitors’ spending (competitive-parity method), or base it on an analysis and costing of the communication objectives and tasks (objective-and-task method).

The company has to divide the promotion budget among the major tools to create the promotion mix. Companies can pursue a push or a pull promotional strategy – or a combination of the two. A push strategy involves “pushing” the product through marketing channels to final consumers. Using a pull strategy, the producer directs its marketing activities (primarily advertising, consumer promotion, and direct and digital media) toward final consumers to induce them to buy the product.

The best specific blend of promotion tools depends on the type of product/market, the buyer’s readiness stage, and the PLC stage.

Question 8

What are some legal and ethical issues surrounding marketing communications?

Answer 8

People at all levels of the organization must be aware of the many legal and ethical issues surrounding marketing communications. Companies must work hard and proactively at communicating openly, honestly, and agreeably with their customers and resellers.

1. By law, companies must avoid false or deceptive advertising. Advertisers must not make false claims, such as suggesting that a product cures something when it does not. They must avoid ads that have the capacity to deceive, even though no one actually may be deceived. An automobile cannot be advertised as getting 32 miles per gallon unless it does so under typical conditions, and diet bread cannot be advertised as having fewer calories simply because its slices are thinner.
2. A company’s trade promotion activities also are closely regulated. For example, under the Robinson-Patman Act, sellers cannot favor certain customers through their use of trade promotions. They must make promotional allowances and services available to all resellers on proportionately equal terms.
3. Under personal selling, a company’s salespeople must follow the rules of “fair competition.” Most states have enacted deceptive sales acts that spell out what is not allowed. For example, salespeople may not lie to consumers or mislead them about the advantages of buying a particular product. To avoid bait-and-switch practices, salespeople’s statements must match advertising claims.