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Week 9 Handout

Overview
We will examine the last of the marketing mix tools—promotion. Companies must do more than just create
customer value. They must also clearly and persuasively communicate that value. Promotion is not a single tool
but rather a mix of several tools. Ideally, under the concept of integrated marketing communications, a company
will carefully coordinate these promotion elements to engage customers and build a clear, consistent, and
compelling message about an organization and its products. We’ll begin by introducing the various promotion
mix tools.

Next, we will examine the rapidly changing communications environment—especially the addition of digital,
mobile, and social media—and the need for integrated marketing communications. Finally, we discuss the steps
in developing marketing communications and the promotion budgeting process. In the next three chapters, we’ll
present the specific marketing communications tools: advertising and public relations; and sales promotion; and
direct, online, mobile, and social media marketing (next Module).

Learning Objectives
Below are the learning objectives for Module 9:
1. Define the five promotion mix tools for communicating customer value. (01 The Promotion Mix)
2. Outline the communication process and the steps in developing effective marketing communications (02
Integrated Marketing Communications)
3. Define the role of advertising in the promotion mix and describe the major decisions involved. (03
Advertising)
4. Define the role of public relations in the promotion mix and explain how companies use PR. (04 Public
Relations)
5. Explain how sales promotion campaigns are developed and implemented. (05 Sales Promotion)
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Week 9 Handout

01 The Promotion Mix

Introduction
A company’s total promotion mix—also called its marketing communications mix— consists of the specific
blend of advertising, public relations, personal selling, sales promotion, and direct marketing tools that the
company uses to engage consumers, persuasively communicate customer value, and build customer
relationships. The five major promotion tools are defined as follows:

• Advertising. Any paid form of non-personal presentation and promotion of ideas, goods, or services by an
identified sponsor.
• Sales promotion. Short-term incentives to encourage the purchase or sale of a product or service.
• Personal selling. Personal customer interactions by the firm’s sales force for the purpose of engaging
customers, making sales, and building customer relationships.
• Public relations (PR). Building good relations with the company’s various publics by obtaining favorable
publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and
events.
• Direct and digital marketing. Engaging directly with carefully targeted individual
consumers and customer communities to both obtain an immediate response and build lasting customer
relationships.

Each category involves specific promotional tools that are used to communicate with customers. For example,
advertising includes broadcast, print, online, mobile, outdoor, and other forms. Sales promotion includes
discounts, coupons, displays, demonstrations, and events. Personal selling includes sales presentations, trade
shows, and incentive programs.
Public relations include press releases, sponsorships, events, and webpages. And direct and digital marketing
includes direct mail, email, catalogs, online and social media, mobile marketing, and more. At the same time,
marketing communication goes beyond these specific promotion tools. The product’s design, its price, the shape
and color of its package, and the stores that sell it—all communicate something to buyers. Thus, although the
promotion mix is the company’s primary engagement and communications activity, the entire marketing mix—
promotion and product, price, and place—must be coordinated for greatest impact.
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02 Integrated Marketing
Communications
Today, marketing managers face some new marketing communications realities. Perhaps no other area of
marketing is changing so profoundly as marketing communications, creating both exciting and challenging
times for marketing communicators. Marketers used to heavily rely on mass marketing mediums, such as
television or magazine, but we have more ways to reach the customer now.

New Marketing Communications Model

Several major factors are changing the face of today’s marketing communications:

Although network television, magazines, newspapers, and other traditional mass media remain very important,
their dominance is declining. In their place, advertisers are now adding a broad selection of more-specialized
and highly targeted media to engage smaller customer communities with more personalized, interactive content.
The new media range from specialty cable television channels and made-for-the-web videos to online ads, email
and texting, blogs, mobile catalogs and coupons, and a burgeoning list of social media. Such new media have
taken marketing by storm.

Here is a video explaining how the new media disrupted the marketing landscape:

https://youtu.be/5K57kcs15DY

As the marketing communications environment shifts, so will the role of marketing communicators. Rather than
just creating and placing “TV ads” or “print ads” or “Snapchat branded story ads,” many marketers now view
themselves more broadly as content marketing managers. As such, they create, inspire, and share brand
messages and conversations with and among customers across a fluid mix of paid, owned, earned, and shared
communication channels. These channels include media that are both traditional and new as well as controlled
and not controlled.
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Week 9 Handout

Need for Integrated Marketing Communications

The explosion of online, mobile, and social media marketing presents tremendous opportunities but also big
challenges. It gives marketers rich new tools for understanding and engaging customers. At the same time, it
complicates and fragments overall marketing communications. The challenge is to bring it all together in an
organized way. To that end, most companies practice the concept of integrated marketing communications
(IMC).

Under this concept, the company carefully integrates its many communication channels to deliver a clear,
consistent, and compelling message about the organization and its brands. To help implement integrated
marketing communications, some companies have appointed a marketing communications director who has
overall responsibility for the
company’s communications efforts. This helps to produce better communications consistency and greater sales
impact.

For your term project, your group will be that director. Your marketing plan should consider these promotion
tools strategically.

Developing Effective Marketing Communications

We now examine the steps in developing an effective integrated communications and promotion program.
Marketers must do the following: identify the target audience, determine the communication objectives, design
a message, choose the media through which to send the message, select the message source, and collect
feedback.
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Week 9 Handout

Additional Points:

• Identifying Target Market - A guide to selecting your target market (starting with the existing
customer base): https://www.wordstream.com/blog/ws/2014/09/18/beginners-guide-to-target-markets
• Communication Objectives - Buyer-readiness stages - "stages" of a customer:
https://www.powerhomebiz.com/blog/2005/09/14/6-stages-of-buyer-readiness/

• Designing a Message - AIDA Model: https://www.smartinsights.com/traffic-building-strategy/offer-

and-message-development/aida-model/
• Choosing Channels
o List of Channels: https://blogs.spectrio.com/51-most-effective-marketing-channels-for-
advertising-your-business
o Guide in Selecting Channels: https://dma.org.uk/article/choosing-channels-how-to-select-the-
most-effective-marketing-channels
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Week 9 Handout

03 Advertising
Advertising involves communicating the company’s or brand’s value proposition by using paid media to
inform, persuade, and remind consumers.
Marketing management must make four important decisions when developing an advertising program: setting
advertising objectives, setting the advertising budget, developing advertising strategy (message decisions and
media decisions), and evaluating advertising effectiveness.

Major Advertising Decisions

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Setting Advertising Objectives

Objectives should be based on past decisions about the target market, positioning, and the marketing mix, which
define the job that advertising must do in the total marketing program. 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 their primary purpose—to inform, persuade, or remind.
Possible Advertising Objectives

Selling Advertising Budget

A brand’s advertising budget often depends on its stage in the product life cycle. For example, new products
typically need relatively large advertising budgets to build awareness and to gain consumer trial. In contrast,
mature brands usually require lower budgets as a ratio to sales. Also, brands in a market with many competitors
and high advertising clutter must be advertised more heavily to be noticed above the noise in the marketplace.
Undifferentiated brands—those that closely resemble other brands in their product class (soft drinks, laundry
detergents)—may require heavy advertising to set them apart. When the product differs greatly from those of
competitors, advertising can be used to point out the differences to consumers.

Selecting Advertising Media

The major steps in advertising media selection are (1) determining reach, frequency, impact, and engagement;
(2) choosing among major media types; (3) selecting specific media vehicles; and (4) choosing media timing.
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Advertising Evaluation
Measuring advertising effectiveness and the return on advertising investment has become a hot issue for most
companies. Top management at many companies is asking marketing managers, “How do we know that we’re
spending the right amount on advertising?” and “What return are we getting on our advertising investment?”
One way to measure the sales and profit effects of advertising is to compare past sales and profits with past
advertising expenditures. Another way is through experiments. For example, to test the effects of different
advertising spending levels, Coca- Cola could vary the amount it spends on advertising in different market areas
and measure the differences in the resulting sales and profit levels. However, because so many factors affect
advertising effectiveness, some controllable and others not, pretesting ads and measuring the results of
advertising spending remains an inexact science. Managers often must rely on large doses of judgment along
with quantitative analysis when assessing content and advertising performance. That’s especially true in this
content-hungry digital age, where large quantities of ads and other content are produced and run on a virtual
real-time basis. Thus, whereas companies tend to carefully pretest traditional big-budget media ads before
running them, digital marketing content usually goes untested.
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Week 9 Handout

04 Public Relations
PR involves building good relations with various company publics—from consumers and the general public to
the media, investor, donor, and government publics. It consists of activities designed to engage and build good
relations with the company’s various publics. PR may include any or all of the following functions:

• Press relations or press agency. Creating and placing newsworthy information in the news media to
attract attention to a person, product, or service.
• Product and brand publicity. Publicizing specific products and brands.
• Public affairs. Building and maintaining national or local community relationships.
• Lobbying. Building and maintaining relationships with legislators and government officials to influence
legislation and regulation.
• Investor relations. Maintaining relationships with shareholders and others in the financial community.
• Development. Working with donors or members of nonprofit organizations to gain financial or
volunteer support.

Public relations is used to promote products, people, places, ideas, activities, organizations, and even nations.
Companies use PR to build good relations with consumers, investors, the media, and their communities. PR is
often used to build support for newsworthy company events and actions.

The Role and Impact of PR

Like other promotional forms, public relations has the power to engage consumers and make a brand part of
their lives and conversations. However, public relations can have a strong impact at a much lower cost than
advertising can. PR is a powerful tool, but marketers should use it with caution. Here is a video showing some
PR disasters:

https://youtu.be/fAVTnfy-F8c

Despite its potential strengths, public relations is occasionally described as a marketing stepchild because of its
sometimes limited and scattered use. Many PR practitioners see their jobs as simply communicating, marketing
managers tend to be much more interested in how advertising and PR affect brand building, sales and profits,
and customer engagement and relationships.

This situation is changing, however. Although public relations still captures only a modest portion of the overall
marketing budgets of many firms, PR can be a powerful brand-building tool. Especially in this digital age, the
lines between advertising, PR, and other content are becoming more and more blurred.
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Week 9 Handout

Major Public Relations Tools

As with the other promotion tools, in considering when and how to use product public relations, management
should set PR objectives, choose the PR messages and vehicles, implement the PR plan, and evaluate the
results. The firm’s PR should be blended smoothly with other promotion activities within the company’s overall
integrated marketing communications effort.
Here is a video discussing the basics of public relations:
https://youtu.be/iVa0DPEjbIw
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Week 9 Handout

05 Sales Promotion
Sales promotion consists of short-term incentives to encourage the purchase or sales of a product or service.
Whereas advertising offers reasons to buy a product or service, sales promotion offers reasons to buy now.
Sales promotion tools are used by most organizations, including manufacturers, distributors, retailers, and not-
for-profit institutions. They are targeted toward final buyers (consumer promotions), retailers and wholesalers
(trade promotions), business customers (business promotions), and members of the sales force (sales force
promotions). Today, in the average consumer packaged-goods company, sales promotion accounts for 60
percent of all marketing budgets.

Sales Promotion Objectives

Sales promotion objectives vary widely. Sellers may use consumer promotions to urge short-term customer
buying or boost customer−brand engagement. Their objectives may include:

• Trade promotions: getting retailers to carry new items and more inventory, buy
ahead, or promote the company’s products and give them more shelf space
• Business promotions: generate business leads, stimulate purchases, reward customers, and motivate
salespeople.
• Sales force: getting more sales force support for current or new products and getting salespeople to sign
up new accounts

When the economy tightens and sales lag, it’s tempting to offer deep promotional
discounts to spur consumer spending. In general, however, rather than creating only short-term sales or
temporary brand switching, sales promotions should help to reinforce the product’s position and build long-
term customer relationships.

Marketers should avoid “quick fix,” price-only promotions in favor of promotions that are designed to build
brand equity.

Major Sales Promotion Tools

Many tools can be used to accomplish sales promotion objectives. Descriptions of the main consumer, trade,
and business promotion tools follow.
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Week 9 Handout

Developing Sales Promotion Plan

The first step is to determine the size of the incentive. A certain minimum incentive is necessary if the
promotion is to succeed; a larger incentive will produce more sales response. The marketer also must set
conditions for participation. Incentives might be offered to everyone or only to select groups.
Marketers must determine how to promote and distribute the promotion program itself. Increasingly, marketers
are blending several media into a total campaign concept. The length of the promotion is also important.
Evaluation is also very important. Marketers should work to measure the returns on their sales promotion
investments, just as they should seek to assess the returns on other marketing activities.
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Week 9: Wrap-up and Looking Ahead

Wrap-up
We are at the last step of the marketing process. We discussed about communicating customer value through
promotion. In this stage, you are already convincing the target consumer to buy the products or services. A
company’s channel decisions directly affect every other marketing decision. Management must make channel
decisions carefully, incorporating today’s needs with tomorrow’s likely selling environment.

The Marketing Process

Looking Ahead
This module will be helpful in the development of your marketing strategies for your marketing plan. The key
to creating effective promotions is not on the volume, but on the quality and synergy of the different strategies
you will recommend. A good approach for this portion is to research on different ways similar companies
promote their products or services. You can draw inspiration from them and see how you can apply it.

We focused on traditional channels this week. Next week, the discussion will revolve around digital marketing
channels.