Global Marketing

Global Marketing
Communications Decisions
CHAPTER # 13
1
The Role of Marketing Communications
Building good customer relationships calls for more than
just developing a good product, pricing it effectively, and
making it available to target customers. Companies
must also communicate their value propositions to
customers, and what they communicate should not be
left to chance.
All of their communications must be planned and
blended into carefully integrated marketing
communication programs.
Just as good communication is important in building and
maintaining any kind of relationship, it is a crucial
element in a companys efforts to build profitable
customer relationships.
2
The Role of Marketing Communications
Marketing communications are the means by which
firms attempt to inform, persuade and remind
consumers directly or indirectly about the
products and brands they sell.
In a sense, marketing communications represent
the voice of the company and its brands.
The Changing Marketing Communications
Environment
Technology and other factors have profoundly
changed the way consumers process
communications, and even whether they choose to
process them at all. The rapid diffusion of
multipurpose smart phones, broadband and wireless
Internet connections, and ad-skipping digital video
recorders (DVRs) have eroded the effectiveness of
the mass media.
3
The Promotion Mix
The promotion mix is the marketers bag of tools for
communicating with customers and other stakeholders. All
of these many tools must be carefully coordinated under
the concept of integrated marketing communications in
order to deliver a clear and compelling message.
Marketing Communications, Brand

Equity, and Sales
In this new communication environment, although
advertising is often a central element of a marketing
communications program, it is usually not the only
oneor even the most important onefor sales and
building brand and customer equity.
4
Modes of Marketing
Communications
Advertising
Sales Promotion
Events and Experiences
Public Relations and Publicity
Direct Marketing
Interactive Marketing
Word-of-mouth Marketing
Personal Selling
5
MARKETING COMMUNICATIONS MIX
The marketing communications mix consists
of eight major modes of communication:
1. Advertising - Any paid form of non-personal

presentation and promotion of ideas, goods, or services
by an identified sponsor via print media (newspapers
and magazines), broadcast media (radio and television),
network media (telephone, cable, satellite, wireless),
electronic media (audiotape, videotape, videodisk, CD-
ROM, Web page), and display media (billboards, signs,
posters).
2. Sales Promotion - a variety of short-term

incentives to encourage trial or purchase of a product or
service including consumer promotions (such as
samples, coupons, and premiums), trade promotions
(such as advertising and display allowances), and
business and sales force promotions (contests for sales
reps), purpose of making presentations, answering
6
3. Events and Experiences - Company-sponsored
activities and programs designed to create daily or
special brand-related interactions with consumers,
including sports, arts, entertainment, and cause
events as well as less formal activities.
4. Public Relations and Publicity - A variety of
programs directed internally to employees of the
company or externally to consumers, other firms, the
government, and media to promote or protect a
companys image or its individual product
communications.
5. Direct Marketing - Use of mail, telephone, fax,
e-mail, or Internet to communicate directly with or
solicit response or dialogue from specific customers 7
6. Interactive Marketing - Online activities and

programs designed to engage customers or
prospects and directly or indirectly raise
awareness, improve image, or elicit sales of
products and services.
7. Word-of-mouth Marketing - People-to-
people oral, written, or electronic
communications that relate to the merits or
experiences of purchasing or using products or
services.
8. Personal Selling - Face-to-face interaction
with one or more prospective purchasers for the
purpose of making presentations, answering 8
Communications Platforms
Advertising Sales Promotion
Print and Broadcast Ads Contests, games,
raffle draws
Packaging Inserts
Free gifts
Motion Pictures
Sampling
Brochures and Booklets
Trade shows,
Posters
exhibits
Billboards
Coupons
Point of Purchase Discounts and
(POP) Displays Reductions
Logos Continuity
Programs
Videotapes
9
Events/ Experiences Public Relations

Sports Press kits
Entertainment Speeches
Festivals Seminars
Art Annual reports
Causes Charitable
Factory tours Donations
Company museums Publications
Street activities Community
Relations
10
Personal Selling Direct Marketing

Sales Presentations Catalogs
Sales Meetings Mailings
Incentive Programs Telemarketing
Samples Electronic shopping
Fairs and Trade TV shopping
Shows
Fax mail
E-mail
Voice mail
Websites 11
A View of the Communication Process
12
Communication involves the nine elements
which are as follows:
Sender: The party sending the message to another party
here, McDonalds.
Encoding: The process of putting thought into symbolic
formfor example, McDonalds ad agency assembles words,
sounds, and illustrations into a TV advertisement that will
convey the intended message.
Message: The set of symbols that the sender transmits
the actual McDonalds advertisement.
Media: The communication channels through which the
message moves from the sender to the receiverin this
case, television and the specific television programs that
McDonalds selects.
Decoding: The process by which the receiver assigns
meaning to the symbols encoded by the sendera consumer
watches the McDonalds commercial and interprets the
words and images it contains.
13
Communication involves the nine elements
which are as follows:
Receiver: The party receiving the message sent by
another partythe customer who watches the McDonalds
ad.
Response: The reactions of the receiver after being

exposed to the messageany of hundreds of possible
responses, such as the consumer likes McDonalds better, is
more likely to eat at McDonalds next time, hums the Im
lovin it jingle, or does nothing.
Feedback: The part of the receivers response

communicated back to the senderMcDonalds research
shows that consumers are either struck by and remember
the ad or they write or call McDonalds, praising or
criticizing the ad or its products.
Noise: The unplanned static or distortion during the

communication process, which results in the receiver
getting a different message than the one the sender sent - 14
Steps in Developing
Effective
Communications
15
Steps in Developing Effective
Communications
Identifying the Target market
16
Communications
Determine the Communications
Objectives
Once the target audience has been defined, marketers must

determine the desired response.
Of course, in many cases, they will seek a purchase
response. But purchase may result only after a lengthy
consumer decision-making process. The marketing
communicator needs to know where the target audience now
stands and to what stage it needs to be moved.
The target audience may be in any of six Buyer-readiness
stage, the stages consumers normally pass through on their
way to making a purchase. These stages are awareness, 17
Communications
Designing the Communications
Formulating the communications to achieve
the desired response requires solving three
problems:
What to say (Message Strategy),
How to say it (Creative Strategy),
Who should say it (Message Source)
Communications
Message Strategy is an appeal or theme
that will produce the desired response.
Communications
Rational Appeal - Rational appeals relate
to the audiences self-interest. They show
that the product will produce the desired
benefits.
Examples are messages showing a products
quality, economy, value, or performance.
Emotional Appeal - Emotional appeals
attempt to stir up either negative or positive
emotions that can motivate purchase.
Communicators may use motional appeals
ranging from love, joy, and humor to fear and
guilt. Advocates of emotional messages claim
Communications
Moral Appeal - Moral appeals are directed
to an audiences sense of what is right and
proper.
They are often used to urge people to support
social causes, such as a cleaner environment
or aid to the disadvantaged.
Communications
Content Strategy
Communications effectiveness depends on how a
message is being expressed, as well as on its content. If
a communication is ineffective, it may mean the wrong
message was used, or the right one was poorly
expressed. Creative strategies are the way marketers
translate their messages into a specific communication.
We can broadly classify them as either:
Communications
Content Strategy
Informational Appeals
An Informational Appeal elaborates on product or service
attributes or benefits. Examples in advertising are problem
solution ads (ENO stops Acidity), product demonstration
ads (Demonstration given Aerosol advertisements killing
Mosquitoes), product comparison ads (DIRECTV offers
better HD options than cable or other satellite operators),
and testimonials from common man or celebrity endorsers
(Aamir Khan giving Godrej Home Appliance/ Home Security
products Advertisements).
Informational appeals assume strictly rational processing of

the communication on the consumers part. Logic and
reason rule.
Communications
Content Strategy
Transformational Appeals
A transformational appeal elaborates on a non-product-
related benefit or image. It might portray what kind of
person uses a brand (BMW/ Mercedes advertised to
active, youthful people with prestige) or what kind of
experience results from use (Pringles advertised Once
You Pop, the Fun Dont Stop for years).
Transformational appeals often attempt to stir up
emotions that will motivate purchase.
Communicators use negative appeals such as fear, guilt,
and shame to get people to do things (brush their teeth,
have an annual health checkup) or stop doing things
(smoking, abusing alcohol, overeating).
Communications
Message Source
Messages delivered by attractive or popular sources can achieve
higher attention and recall, which is why advertisers often use
celebrities as spokespeople.
Expertise is one of the sources of a spokesperson's
credibility that refers to the specialized knowledge that he or
she possesses to claim.
Trustworthiness describes how objective and honest the
source is perceived to be. Friends are trusted more than
strangers or salespeople, and people who are not paid to
endorse a product are viewed as more trustworthy than
people who are paid.
Likability describes the sources attractiveness. Qualities
such as candor, humor, and naturalness make a source more
likable.
Communications
Select Communication Channels
26
Communications
Personal communications channels
let two or more persons communicate
face-to-face or person-to-audience
through a phone, surface mail, or e-
They derive mail.
their effectiveness from individualized
presentation and feedback and include direct and
interactive marketing, word-of-mouth marketing, and
personal selling.
We can draw a further distinction between advocate,
expert, and social communications channels.
Advocate Channels consist of company salespeople
contacting buyers in the target market.
Expert Channels consist of independent experts making
statements to target buyers.
Social Channels consist of neighbors, friends, family 27
Communications
Non-personal 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, sites, and online social and
28
sharing networks).
Communications
Atmospheres are designed environments that

create or reinforce the buyers 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.
29
Communications
Setting the Total Promotion Budget
How does a company determine its promotion budget?
Here, we look at four common methods used to set the total
advertising budget.
30
Communications
Some companies use the Affordable Method -

Where they set the promotional budget at the
level they think the company can afford. Small
businesses often use this method, reasoning that
the company cannot spend more on advertising
than it has.
They start with total revenues, deduct operating
expenses and capital outlays, and then devote
some portion of the remaining funds to
advertising.
31
Communications
Other companies use the Percentage of Sales

Method - where they set the promotion budget
at a certain percentage of current or forecasted
sales or as a percentage of the unit sales price.
32
Communications
Still other companies use the Competitive-parity

Method - setting their promotion budgets to
match competitors outlays. They monitor
competitors advertising or get industry promotion
spending estimates from publications or trade
associations and then set their budgets based on
the industry average.
33
Communications
The most logical budget-setting method is the

Objective-and-task Method, whereby the company
sets its promotion budget based on what it wants to
accomplish with promotion.
This budgeting method entails
(1) defining specific promotion objectives,
(2) determining the tasks needed to achieve these
objectives,
(3) estimating the costs of performing these tasks.
34
The sum of these costs is the proposed promotion
Communications
Shaping the Overall Promotion Mix
35
Communications
Each promotion tool has unique characteristics and costs.
Marketers must understand these characteristics in shaping
the promotion mix.
Advertising
Advertising can reach masses of geographically dispersed
buyers at a low cost per exposure, and it enables the seller
to repeat a message many times. For example, television
advertising can reach huge audiences.
Advertising is also very expressive; it allows the company
to dramatize its products through the artful use of visuals,
print, sound, and color.
On the one hand, advertising can be used to build up a
long-term image for a product (such as Coca Colas ads). On
the other hand, advertising can trigger quick sales. 36
Communications
Advertising (Contd.)
Advertising also has some shortcomings.
Although it reaches many people quickly, advertising is
impersonal and lacks the direct persuasiveness of company
salespeople.
For the most part, advertising can carry on only a one-way
communication with an audience, and the audience does not
feel that it has to pay attention or respond.
In addition, advertising can be very costly. Although some
advertising forms, such as newspaper and radio advertising,
can be done on smaller budgets, other forms, such as
network TV advertising, require very large budgets.
37
Communications
Advertising (Contd.)
Informative Advertising is used when introducing a

new product category; the objective is to build
primary demand.
Comparative Advertising directly or indirectly
compares the brand with one or more other brands.
Persuasive Advertising aims to create liking,
preference, confidence, and purchase of a product or
service.
Reminder Advertising is important with mature
products to help maintain customer relationships and
keep customers thinking about the product. 38
Communications
Personal Selling
Personal selling is the most effective tool at certain
stages of the buying process, particularly in building up
buyers preferences, convictions, and actions. It involves
personal interaction between two or more people, so
each person can observe the others needs and
characteristics and make quick adjustments.
An effective salesperson keeps the customers interests
at heart to build a long-tem relationship by solving a
customers problems.
Finally, with personal selling, the buyer usually feels a
greater need to listen and respond, even if the response
is a polite
39
Communications
Sales Promotion
Sales promotion includes a wide assortment of tools
coupons, contests, discounts, premiums, and others
all of which have many unique qualities. They attract
consumer attention, offer strong incentives to
purchase, and can be used to dramatize product offers
and boost sagging sales. Sales promotions invite and
reward quick response.
Whereas advertising says, Buy our product, sales
promotion says, Buy it now. Sales promotion effects
are often short lived, however, and often are not as
effective as advertising or personal selling in building
long-run brand preference and customer relationships.
40
Communications
Public Relations
Public relations is very believable news stories,
features, sponsorships, and events seem more real and
believable to readers than ads do. PR can also reach
many prospects who avoid salespeople and
advertisementsthe message gets to buyers as news
rather than as a sales-directed communication. And, as
with advertising, public relations can dramatize a
company or product.
A well-thought-out public relations campaign used with

other promotion mix elements can be very effective and
economical.
41
Communications
Direct Marketing
Although there are many forms of direct marketingdirect
mail and catalogs, online marketing, mobile marketing,
and othersthey all share some distinctive characteristics.
Direct marketing is less public The Message is
normally directed to a specific person.
Direct Marketing is immediate and customized
Messages can be prepared very quickly and can be
tailored to appeal to specific consumers.
Direct Marketing is Interactive It allows a dialogues
between the marketing team and the consumer, and
messages can be altered depending on the consumers 42
response.
Communications
Promotion Mix Strategies
43
Communications
Promotion Mix Strategies
Push Strategy
A promotion strategy that calls for using the sales
force and trade promotion to push the product
through channels. The producer promotes the product
to the channel members, which in turn promote it to
the final consumers.
Pull Strategy
A promotion strategy that calls for spending a lot on
consumer advertising and promotion to induce final
consumers to buy the product, creating a demand
vacuum that pulls the product through the channel. 44
END OF THE CHAPTER
45

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Marketing Communications, Brand

1. Advertising - Any paid form of non-personal

2. Sales Promotion - a variety of short-term

6. Interactive Marketing - Online activities and

Events/ Experiences Public Relations

Personal Selling Direct Marketing

Response: The reactions of the receiver after being

Feedback: The part of the receivers response

Noise: The unplanned static or distortion during the

Once the target audience has been defined, marketers must

Informational appeals assume strictly rational processing of

Non-personal communication Channels are

Major Media include print media

Atmospheres are designed environments that

Events are staged occurrences that communicate

Some companies use the Affordable Method -

Other companies use the Percentage of Sales

Still other companies use the Competitive-parity

The most logical budget-setting method is the

Informative Advertising is used when introducing a

A well-thought-out public relations campaign used with

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