Promotion: Function of Informing, Persuading

Amity Business School
• Promotion:
Promotion function of informing, persuading,
and influencing the consumer’s purchase
decision
• Marketing Communications:
Communications transmission
from a sender to a receiver of a message
dealing with the buyer-seller relationship
1
Marketing Communications
The means by which firms attempt to

inform, persuade, and remind
consumers, directly or indirectly, about
the products and brands they sell.
2
Elements in the Communications Process
• Sender
• Message
• Receiver
• Response
• Feedback
• Noise
3
The Communications Process

• An effective promotional message
accomplishes three tasks:
– It gains the receiver’s attention
– It achieves understanding by both receiver
and sender
– It stimulates the receiver’s needs and
suggests an appropriate method of
satisfying them
4
• AIDA concept (Attention-Interest-

Desire-Action) – an explanation of the
steps through which an individual
reaches a purchase decision
– Sender
– Encoding
– Channel
– Decoding
– Response
– Feedback
– Noise
5
The Communications Process
• Selective attention
• Selective distortion
• Selective retention
6
Objectives of Promotion
• Provide Information
– Inform the market about the availability of a
particular good or service
• Increase Demand
– Some promotions are aimed at increasing
primary demand, the desire for a general
product category
– More promotions are aimed at increasing
selective demand, the desire for a specific
brand
7
• Differentiate the Product

– Homogenous demand for many products
results when consumers regard the firm’s
output as virtually identical to its
competitors’– then, the firm has virtually no
control over marketing variables
• Accentuate the Product’s Value
– Promotion can explain the greater ownership
utility of a product to buyers, thereby
accentuating its value and justifying a higher
price
8
• Stabilize Sales
– For the typical firm, sales
fluctuations may result from
cyclical, seasonal, or irregular
demand
– Stabilizing these variations is often
an objective of promotional
strategy
9
Elements of the Promotional Mix

• Promotional mix:
mix blend of personal
selling and nonpersonal selling designed to
achieve promotional objectives
– Personal selling:
selling interpersonal promotional
process involving a seller’s person-to-person
presentation to a prospective buyer
– Nonpersonal selling includes: Advertising,
Product placement, Sales promotion, Direct
marketing, Public relations
10
• Advertising
– Paid, nonpersonal communication through
various media by a business firm, not-for-profit
organization, or individual identified in the
message with the hope of informing or
persuading members of a particular audience
• Product Placement
– Marketer pays a motion picture or television
program owner a fee to display his or her
product prominently in the film or show
11
• Sales Promotion
– Marketing activities that stimulates
consumer purchasing (includes:
displays, trade shows, coupons,
premiums, contests, product
demonstrations, and various
nonrecurrent selling efforts)
– Trade promotion
12
• Direct Marketing
– Direct communications other than
personal sales contact between
buyer and seller, designed to
generate sales, information requests,
or store visits
13
• Public relations:
relations firm’s communications
and relationships with its various publics
• Publicity:
Publicity stimulation of demand for
good, service, place, idea, person, or
organization by unpaid placement of
commercially significant news or favorable
media presentations
14
Sponsorships
• Provision of funds for a sporting or cultural
event in exchange for a direct association
with the events or activity
15
Characteristics of Marketing Communications Mix
Advertising Sales Promotion

• Pervasiveness • Communication
• Amplified • Incentive
expressiveness • Invitation
• Impersonality
16
Characteristics of Marketing
Communications Mix
Public Relations and Events and
Publicity Experiences
• High credibility • Relevant
• Ability to catch buyers • Involving
off guard • Implicit
• Dramatization
17
Characteristics of Marketing
Communications Mix
Direct Marketing Personal Selling
• Customized • Personal interaction
• Up-to-date • Cultivation
• Interactive • Response
18
Integrated Marketing Communications

• Coordination of all promotional
activities – media advertising, direct
mail, personal selling, sales promotion,
and public relations – to produce a
unified customer-focused promotional
message
– Success of any IMC program depends
critically on identifying the members of an
audience and understanding what they
want
19
Developing an Optimal Promotional Mix
• Factors that influence the effectiveness of

a promotional to mix:
– Nature of the market
– Nature of the product
– Stage in the product life-cycle
– Price
– Funds available for promotion
20
• Nature of the market

– Personal selling may prove effective with a market
composed of a limited number of buyers
– Advertising is more effective when a market has large
numbers of potential customers scattered over sizable
geographic areas
– Personal selling often works better for intermediary
target markets
• Nature of the product
– Highly standardized products with minimal servicing
requirements usually need less personal selling than
custom products with complex features and/or
frequent maintenance needs
– Consumer products are more likely to rely heavily on
advertising than are business products
21
• Stage in the product life-cycle

– Promotional mix must be tailored to the products
stage in the product life-cycle
– In the introductory stage, there is a heavy emphasis
on personal selling to the to the intermediaries
– However, advertising and sales promotion help to
create awareness and stimulate initial purchases
– In the growth and maturity stages, advertising gains
relative importance
– Personal selling efforts at marketing intermediaries to
expand distribution is continued
– In the maturity and early decline stages, firms
frequently reduce advertising and sales promotion
expenditures
22
• Price
– Advertising dominates the promotional mix for low-
unit-value products due to the high personal contact
costs of personal selling
– Consumers a high-priced items like luxury cars expect
lots of well-presented information via videocassettes,
CDs, fancy brochures, and personal selling
• Funds available for promotion
– A critical element in the promotional strategy is the
size of the promotional budget
– While the cost-per-contact of a $2 million, 30-second
TV commercial during the Super Bowl is relatively
low, such an expenditure exceeds the entire
promotional budgets of many, if not most firms
23
Influencing Factors Personal Selling Advertising

Nature of the market Limited number Large number
Number of buyers Concentrated Dispersed
Geographic Business purchaser Ultimate consumer
concentration
Type of customer
Nature of the product Custom-made, complex Standardized
Complexity Considerable Minimal
Service
Business Consumer
requirements
Type of good or Trade-ins common Trade-ins uncommon
service
Use of trade-ins
Stage in the product life cycle Often emphasized at every stage; Often emphasized at every stage;
heavy emphasis in the introductory and heavy emphasis in the latter part
early growth stages in acquainting of the growth stage, as well as the
marketing intermediaries and potential maturity and early decline stages,
consumers with the new good or to persuade consumers to select
service specific brands
Price High unit value Low unit value 24

Pulling and Pushing

Promotional Strategies
• Pulling strategy:
strategy promotional effort by a seller to
stimulate demand among final users, who will then
exert pressure on the distribution channel to carry the
good or service, pulling it though the marketing
channel
• Pushing strategy:
strategy promotional effort by a seller to
members of the marketing channel intended to
stimulate personal selling of the good or service,
thereby pushing it through the marketing channel
25
Communication Platforms
Advertising Sales Promotion
• Print and broadcast ads • Contests, games
• Packaging inserts • Premiums
• Motion pictures • Sampling
• Brochures and booklets • Trade shows, exhibits
• Posters • Coupons
• Billboards • Rebates
• POP displays • Entertainment
• Logos • Continuity programs
• Videotapes • Tie-ins
26
Events/ Experiences Public Relations
• Sports • Press kits
• Entertainment • Speeches
• Festivals • Seminars
• Arts • Annual reports
• Causes • Charitable donations
• Factory tours • Publications
• Company museums • Community relations
• Street activities • Lobbying
• Identity media
• Company magazine 27
Personal Selling Direct Marketing
• Sales presentations • Catalogs
• Sales meetings • Mailings
• Incentive programs • Telemarketing
• Samples • Electronic shopping
• Fairs and trade shows • TV shopping
• Fax mail
• E-mail
• Voice mail
28
Figure 17.4 Steps in Developing Effective

Communications
Identify target audience
Determine objectives
Design communications
Select channels
Establish budget
Decide on media mix
Measure results
Manage IMC 29
Image
The set of beliefs, ideas, and impressions
a person holds regarding an object.
30
Communications Objectives
• Category need
• Brand awareness
• Brand attitude
• Purchase intention
31
Designing the Communications
• Message strategy
• Creative strategy
• Message source
32
Selecting the Communications Channels
• Personal communication channels

• Non personal communication channels
• Integration
33
Creative Strategy
• Informational and transformational appeals
• Positive and negative appeals
– Fear
– Guilt
– Shame
– Humor
– Love
– Pride
– Joy
34
The Importance of Taglines

Brand Theme Ad Tagline
• Our car is more “More Car per Car” (Tata
spacious Indica)
• It is prestigious to own “Neighbor’s Envy; Owner’s
our brand of TV Pride” (Onida TV)
• Our butter is tasty and “Utterly Butterly Delicious”
fun to eat (Amul Butter)
• Our motorbike is fuel “Fill it, shut it, Forget it”
efficient (Hero Honda motorcycle)
35
Message Source
Celebrity Characteristics
– Expertise
– Trustworthiness
– Likeability
36
Personal Communications Channels
• Advocate Channels
• Expert Channels
• Social Channels
37
Stimulating Personal Influence Channels

• Identify influential individuals and devote extra
attention to them
• Create opinion leaders
• Use community influentials in testimonial advertising
• Develop advertising with high “conversation value”
• Develop WOM referral channels
• Establish an electronic forum
• Use viral marketing
38
Non personal Communication

Channels
• Media
• Sales Promotion
• Events and Experiences
• Public Relations
39
Budgeting for Promotional Strategy

• Percentage-of-sales method
• Fixed-sum-per-unit method
• Meeting competition method
• Task-objective method
40
Method Description Example

Percentage-of-sales Promotional budget is set as a “Last year we spent $10,500 on promotion
method specified percentage of either past and had sales of $420,000. Next year we
or forecasted sales. expect sales to grow to $480,000, and we
are allocating $12,000 for promotion.”
Fixed-sum-per-unit Promotional budget is set as a “Our forecast calls for sales of 14,000
method predetermined dollar amount for units, and we allocate promotion at the rate
each unit sold or produced. of $65 per unit.”
Meeting competition Promotional budget is set to match “Promotional outlays average 4 percent of
method competitor’s promotional outlays on sales in our industry.”
either an absolute or relative basis.
Task-objective Once marketers determine their “By the end of next year, we want 75
method specific, promotional objectives, the percent of the area high-school students to
amount (and type) of promotional be aware of our new, highly automated
spending needed to achieve them is fast-food prototype outlet. How many
determined. promotional dollars will it take, and how
should they be spent?”
41
Allocation of Promotional Budgets for consumer Packaged Goods
42
Measuring the Effectiveness of Promotion

• Two basic measurement tools:
– Direct sales results measures the effectiveness of
promotion by revealing the specific impact on sales
revenues for each dollar of promotional spending
– Indirect evaluation concentrates on quantifiable
indicators of effectiveness like:
• Recall - how much members of the target market remember
about specific products or advertisements
• Readership – size and composition of a message’s
audience
43
• Measuring Online Promotions

– Early attempts at measuring online promotional
efforts involved counting hits and visits
– Incorporating direct response and comparing
different promotions for effectiveness
– Two major techniques for setting online
advertising rates:
• Cost per impression (CPM), technique that related
the cost of an ad to every thousand people who read it
• Cost per response (click-throughs), which assumes
that those who actually click on an ad want more
information
44
Factors in Setting Marketing

Communications Mix
• Type of Product Market

• Buyer Readiness to Make a Purchase
• Stage in the Product Life Cycle
45
Coordinating Media to Build Brand

Equity
• Brand Signatures
• Ad Retrieval Cues
• Media Interactions
46

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Amity Business School

The means by which firms attempt to

Elements in the Communications Process

The Communications Process

• AIDA concept (Attention-Interest-

The Communications Process

• Differentiate the Product

Elements of the Promotional Mix

Characteristics of Marketing Communications Mix

Advertising Sales Promotion

Integrated Marketing Communications

Developing an Optimal Promotional Mix

• Factors that influence the effectiveness of

• Nature of the market

• Stage in the product life-cycle

Influencing Factors Personal Selling Advertising

Price High unit value Low unit value 24

Pulling and Pushing

Figure 17.4 Steps in Developing Effective

Designing the Communications

Selecting the Communications Channels

• Personal communication channels

The Importance of Taglines

Personal Communications Channels

Stimulating Personal Influence Channels

Non personal Communication

Budgeting for Promotional Strategy

• Meeting competition method

Method Description Example

Allocation of Promotional Budgets for consumer Packaged Goods

Measuring the Effectiveness of Promotion

• Measuring Online Promotions

Factors in Setting Marketing

• Type of Product Market

Coordinating Media to Build Brand

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