Download Level 4 Advanced diploma in marketing

Level
4.0 ADVANCED DIPLOMA IN MARKETING
MANAGEMENT
Module
13 MARKETING COMMUNICATIONS
STRATEGY
Advanced Diploma in Marketing Management
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Advanced Diploma in Marketing Management
Content
1 MARKETING COMMUNICATION STRATEGY
The Marketing and Importance of Marketing Communication
The Marketing Mix
Integrated Marketing Communication
2 A THEORETICAL UNDERSTANDING OF MARKETING COMMUNICATIONS
Communication Theory
Types of Buying Situation
The Intervening variables
3 MANAGING THE MARKETING
Evaluating Marketing Communications Activities
Selecting The Message Source
Product Life-cycle Stage
4 SUCCESSFUL MARKETING STRATEGIES
Products and Services for Consumers
5 INTERNATIONAL MARKETING COMMUNICATION
Global Perspective
Personal Selling and Sales Management
6 WIDER ISSUE OF MARKETING COMMUNICATION
Legal Constraints
Cultural Diversity
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Module 13 Marketing Communications Strategy
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1 Marketing Communication
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The Meaning and Importance of Marketing Communications
Marketing depends heavily on an effective communication flow between the company and the
consumer. Manufacturing a product and making it available on the market is only a part of the
company job. It is equally important, or perhaps more important, to make it known to the consumer
that the product is available in the market. In a competitive market, where several firms are striving
to win over consumers, it is not enough if the availability of a product only is made known to
consumers. It is also essential to propagate the distinctive features of the product. The process does
not end here, either. The firm should also get feedback on how the consumers accept its products
through an effective, continuous and two-way flow of information between the firm and the
consumer.
According to the traditional view held by marketing men, the ‘promotion mix’ consisting of personal
selling, advertising, sales promotion and publicity, is the only instrument available for
communicating with the consumer. Marketing literature also adopted same approach and described
the promotion mix as the sole instrument of marketing communications. This approach has,
however, undergone significant changes over the years. Today, besides the promotion mix, other
entities like product, price and place are also viewed as components of marketing communications.
In other words, all the four Ps of marketing are considered as components of the communications
mix of the firm.
The firm attempts to communicate with the consumer through quality products, colorful packages,
written messages, pictures and symbols, attractive showrooms and efficient salesmen. When these
various stimuli are received and interpreted by the consumer, marketing communication takes place.
The communication also involves feedback from the consumer to the company, on how the total
product offering of the company is received by the market.
Definition of Marketing Communications
So, marketing communications can be defined as the phenomenon of presenting a set of messages to
a target market through multiple cues and media, with the intention of creating a favorable response
from the market towards the company’s total product offering, simultaneously providing for market
feedback for improving and modifying the company’s total product offering.
This means that the firm is a sender of market messages and receiver of market responses. In its role
as a sender of messages, the firm communicates with the market not only through promotional
stimuli but also through product, price and place or point of sale. In its role as a receiver of market
responses, the firm collects information through market research and marketing information systems.
Under marketing communications, we shall confine our discussions to the communication flow from
the firm to the consumer.
Marketing communication in effect works as indicated below:
 Product communicates
 Price communicates
 Place (point of sale) communicates
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1 Marketing Communication Strategy
Promotion communicates
Marketing Communication Through Product Cues
The product is a carrier of certain messages – product messages. It conveys certain meanings
through its colour, its shape and size, its physical materials, its package, its labels and its brand
name. A product is no more viewed as a mere non-living object. Whether it is a toilet soap or a
toothpaste, a toy or an aftershave lotion, a bottle of beer or a pair of shoes – it is not viewed by the
consumer as a mere object. Consumers attribute meaning and significance to a product, in turn,
projects a personality of its own. A purchase is the result of these two processes. It is this image or
total personality f the product that communicates with the consumer.
All these factors are sources of product cues or product messages to the consumer. They
communicate something about the product through carrying certain impressions. Let us see how
different constituent elements of a product, function as communicators.
The physical features, the material, the size, shape, design, the finish, etc, of the product
The brand name/company name
The package, its colour, size, design and labeling
All these factors are sources of product cues or product messages to the consumer. They
communicate something about the product through carrying certain impressions. Let us see how
these different constituent elements of a product, function as communicators.
Physical Features of the Product Communicate
To begin with the product communicates through its physical features. Its material, its design,
colour, shape, and oduor, finish – all these features convey something to the buyer. Pink colour, oval
shape, jasmine scent, silky feel, pocket size, feathery touch – they are all product features with great
communicative and consequent persuasive value.
The communication can be visual, through sight, it can be tactile through touching and feeling the
product or it can be through performance through seeing the product functioning. Depending upon
the nature of the product, the different communication routes – visual communication, tactile
communication and performance communication – take precedence. In many cases, all these
communication routes operate on the consumer equally strongly. When a woman buys a sari, visual
communication takes place first. The color, the design, and the material impress her. She then
touches it, feels it, examines it closely, a tactile communication takes place. Tactile communication
is not confined to products like saris. Even in the case of non-aesthetic products or fertilizers,
normally, pushes his hand deep into the bag to feel the product. Performance communication
becomes important in certain products. A person buying a costly toy examines its performance, in
the shop itself. More than visual and tactile communication, here, the product has to communicate its
ability to perform. In high-priced durables, performance is an important communication cue.
The Package Communicates
The role of package in the development of the product personality is in managing the product. It
shows how the package takes up the role of a silent salesman in the shelf/counter of the retail shop.
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For packaged consumer products as a group, the package has evolved as a powerful communication
tool. It communicates a lot. The package provides the first appeal; to the consumer. The actual
product comes only later. The package is there to be seen and felt. Its colour, its shape and size, its
labels and lettering, the brand name, the material used – they all carry some communication cues.
The Colours on the Package Communicate
Colour has great communicative significance. There are colours, there are dull colours, there are
soothing colours and there are inviting colours. There are colours evoking appetite, and colours
inviting sleep. There are colours associated with prosperity and colours associated with love and
romance. There is the colour of war and aggression and the colour of peace. There are colours
associated with festivals and colours associated with mourning. Race effects colour preferences.
Climate affects colour preferences. Obviously, colour has a great communicative significance in
packaging. It is a source of emotional enjoyment to most people. Colour psychology and learned
responses to colours can be utilized to great effect in packaging and advertising. The right colour or
the right combination of colours on the package can boost the communicative appeal of the package.
Business firms have paid a great deal of money to psychologists and research institutions to discover
the colours and colour pattern that will influence people in their purchases. It is not by accident that
a large number of packages displayed on the shelves of any store are of shades of red and yellow.
Research has shown that red and yellow arrest the eyes and attention. These colours also make the
package look a little bigger than what it really is. Red is also associated with vitality, power, and an
urge to win. Manufacturers of cigarettes and soft drinks are extensive users of red in wrappings. Blue
is deemed to convey peace, contentment and security. And blue color is widely used by banks and
manufacturers of cars in their symbols/logos. And as a general rule, children are found to prefer
bright colours and adults, subdued colours.
The colours on the package communicate instantly. A cake of soap in a light blue package may
capture the attention of a cultured young lady, a toy in a bright red package may attract a young boy,
a frozen food in light orange packing may attract a middle aged housewife, chocolates in a light blue
and pink package may attract a girl in love, a book covered in subdued yellow and brown may attract
an intellectual. So, the colour plan of the package can have telling communicative effect. The right
colour scheme will communicate the nature of the contents, it will capture the attention of
consumers, it will reflect the neatness and elegance of the product inside, it will facilitate easy
reading of the instructions and in effect, it does the initial selling through these communicative cues.
Package Design
Just like the colour of the package, its size, shape and design too have a communicative role. A good
package design is eye-catching and is not a strain for the consumer who looks at it and examines it.
A bad package design can harm the total product message. The product might be a quality product,
but it may not get accepted in the market if the package design does not succeed in evoking a
favourable response. Package design and colour have to blend rhythmically to make the package
communication effective. Pictures, labels and other illustrations on the package increase its
communicative value.
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The Brand Name Communicates
Brand name as a component of the total product has a great communication value. No woman asks
for just facial make-up, she asks for ponds, or Lakme. She does not ask for shampoo, she asks for
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Halo, Sunsilk, Tiara or Gleem. For the utility angle, any of these products may serve the purpose.
But a buyer identifies products and distinguishes one from the other through the brand name. And
this is the main function intended of a brand name – to distinguish the company’s product from its
competitor’s products. An imaginative brand name communicates with prospective buyers by
evoking positive meanings and associations in their minds. Halo or Ponds Dreamflower, Sunsilk or
signal, Angelface or Gleem, Godrej or Swan – they all convey a message to the buyer. A good brand
name should be able to suggest to the buyer, what type of product it is, products, through a
successful brand strategy, psychological product differentiation can be created. Quite often, the
brand names are supported by slogans which can be easily remembered, or which have great
reminder value in the market. In the Indian market, Lifebuoy, lux, vimal, nirma and close-up are
examples of brand names that have succeeded remarkably in their communicative roles.
The Company Name Communicates
In addition to the brand name, firms also use the company name, for marketing communication. For
example, most of the products of the house of Tatas carry the suffix – ‘A Tata product’. Products for
Godrej for bathing soaps to steel cupboards, sell under the company name Godrej. In such cases, the
firm is actually using the company name and the image of the company as a marketing
communication tool. Such communication has a special utility when the company introduces a new
product/brand. The company name, as a part of the product personality, can contribute substantially
as a marketing communication tool, only when the company has already earned a name and
reputation in the market.
In Short, the Product Sends out Multi-Pronged Messages
The product seen by the consumer is the sum total of the various product messages – the colour, the
shape, the feel, the design, the oduour, etc, of the product, the colour, the size, and the lettering, the
labels, and the pictures on the package, the brand name/company name and the slogans. For the
consumer these are all symbols, and all of them mean something to him. This meaning should be
positive. The product messages and the product cues should be designed in such a way that they
evoke a positive meaning and favourable response in the mind of the buyer. So it is not only the end
use or the function of the product that matters in marketing – though it should certainly stand this
test – buyers for the purchase to take place, or for evoking an initial interest in the product. If this
communication is to be successful, the various product cues must support and complement one
another and produce a total product image that is favourable and appealing to the buyer.
Marketing Communication through Price Cues
Price Conveys Something More than the Price
It is not our intention here to analyze the basic concepts and strategies of pricing.
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Price-Quality Equation
What are the informative cues that price provides to consumers? Quite frequently, consumers view
price as an index of quality. When several brands of the same product are available, consumers tend
to use price as a cue to quality. The higher priced brand succeeds in giving greater quality assurance
to the buyer. Similar is the case with products that are used as gifts, when a person selects a gift
item, he normally likes to avoid a cheap brand.
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Within his budget, he may select the higher priced brand from the various alternatives available.
Here also, price as an informational cue plays a key role in his decision-making process. He may not
be sure about the quality of the brand he is selecting. But the price, along with other informational
cues, gives him an assurance of quality.
Price-Status Equation
Price, in certain cases becomes a symbol of prestige or status for the buyer. This is quite often true of
high priced consumer goods. The status conscious buyer uses high price as a status symbol. When he
proudly declares that this is the highest priced brand in the market, he is using price as a symbol of
prestige.
Price, an Indicator of Technological Superiority
Technological changes that result in product innovations also tempt the customer to use price as the
most reliable information cue. A potential buyer in search of a good refrigerator may come across
different brands, each claiming a distinctiveness and quality performance, and listing out its
technological features. While such product information is also intended to be an essential message
carrier to the customer, the layman who is not well versed with the technical claims may ultimately
rely on the price cue as a measure of product excellence.
Consumers’ concept of ‘ a reasonable price’
In the case of certain products, consumers develop an idea of a reasonable price. They may not know
anything about the company’s cost of production of the material or the profits the company intends
to make. The reasonable price they assume might be based on prices of similar products available in
market. When the actual price of a given brand is more than the reasonable price they have assumed,
they are reluctant to buy. And if the price is much lower than the reasonable price, the consumers
may then suspect the quality. A price that comes close to the reasonable price alone will find
acceptance in the market.
So the marketer has to necessarily remember that price is not merely an economic tool. The
psychological effects of price on the consumer have to be taken into account, and the communicative
role of price has to be exploited to make the total product offering attractive to consumers.
Place as a Component in Marketing Communication
Quite often we hear people saying: ‘I buy only from X store’. ‘if you ask them why their replies may
run like this. ‘They have a big choice’, ‘It’s a lovely place to shop in’, ‘The service is good, ‘It is
cheap’, ‘It has a good location, ‘They sell quality products’.
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The Store Image
Just like the product projecting its image, the store also projects an image of its own through various
factors such as, its location, its external looks, its displays, and point of sale promotion, its salesmen,
the extent of merchandise it carries, the extra service it offers, its policy on price, its reputation in the
locality, the type of customers who patronize it. His father may find the same store decent and
reliable. The youngster may like to shop with a modern exterior design and interior decoration, with
a spacious shopping space and good display.
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Music adds to his pleasure and the shop cosmetics from a cheap-looking store. She may buy the
same item form the new shopping complex with its glamorous appearance and collections. The
extent of merchandise carried in the store also helps project its image in a favorable manner. People
normally do not like to patronize a poorly stocked shop. They would like to visit stores variety. In
addition to these physical features of the store, the sales personnel in the store also play an important
role in marketing communications. Well trained and well mannered salesmen add to the store image.
Store Level Merchandising
Often, it is merchandising at the store level – all those dealer level activities, including display and
service – that speeds up the movement of products from the store counter to the shopper’s basket. A
consumer, who normally goes to a retail store to buy his usual brand, may switch over a competing
brand seeing the product on display. In today’s highly competitive market, many companies see to it
that the store as a total unit becomes a display unit attracting high consumer traffic.
Store, a Powerful Communication Instrument
The persuasive role of the retail store and the need for creating a good store image has been
highlighted.
Tools and techniques of sales promotion
For a marketer resorting to sales promotion, a variety of tools and techniques are available. Sales
promotion letters, catalogues, point of purchase displays, customer service programmes,
demonstrations, free samples, discounts, contests, sweepstakes, premiums and coupons are the
commonly resorted methods of sales promotion. Let us discuss them in some detail and see how
companies have used these methods in actual marketing situations.
Sales promotion letters
Several large companies utilize the medium of letters for sales promotion. These letters serve
different purposes. Sometimes, they are used to give information about the company’s products;
sometimes they are reminders to buy a particular brand. Some conducted on the efficacy of letters as
a medium of sales promotion indicate that a good letter must seek action from the receiver. Sales
promotion letters are sent to salesmen, dealers and consumers.
Catalogues
Catalogues carry essential information on the products offered by the company: Well designed
catalogues give complete information relating to products, their pictures, size specifications, colours,
packing, uses and prices. The products are properly listed and indexed to facilitate order booking and
processing.
POP/Display
Point of purchase promotion (POP) is one of the most widely used sales promotional tools. It is also
sometimes referred to as point of sales promotion. With the proliferation of brands, innovative
displays have become a prerequisite for success. Brands compete with each other for consumer’s
mind has become the prime concern of marketers. Hence the important of POP display.
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Various kinds of display materials like posters, danglers, stickers, mobile wobblers and streamers are
used at the retail shop level to induce purchase.
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In the modern context of high intensity marketing, the retailers are virtually flooded with POPs by
all manufacturers. If they are just dumped in a forsaken corner of the shop, the brand does not get the
intended sales promotional benefit from the POPs. Only those who can manage to get the right
display effect will benefit form POPs.
To enhance the display effect, manufacturers use several gadgets and approaches. Illuminated
designs, motion displays, etc, add to the display effect. Some companies organize display units and
locate them at vantage points within the store attracting the attention of store traffic. Skillfully
designed and strategically located display units can enhance the sales appeal. More and more firms
are going on for innovative displays to give their brands visibility in today’s crowded shop shelves.
When Nestle launched Maggi Noodles, way back in 1983, they used a unique dispenser, the wire
mesh bag. Not only did it help in brand identification, it was helpful to the retailer too. The dispenser
hung from the ceiling helped him to save shelf space. Cadbury too came with space available in the
retail store, big stocks of a given brand are artistically arranged to gain attention. Customized racks
are also being used for display effect. In fact, in the paucity of space, companies like Procter &
Gamble, Nestle, Hindustan Lever, Lakme and Tips and Toes make yearly bookings for display
space.
Displays have their origins in the age-old belief that goods well displayed are half sold. Displays can
be of various types – window displays, counter displays, or floor displays.
Demonstrations
Companies resort to product demonstrations for sales promotion, especially, when they are coming
up with a new product. In India, in recent years, several products – low unit price products like
beverages and washing powders as well as high unit price products like washing machines and
personal computers – have utilized product demonstration as a tool of sales promotion.
Demonstrations at Retail Stores
Sometimes, company salesmen for the benefit of retailers as well as consumers organize
demonstrations at retail stores. This is an important role of retail stores.
School Demonstrations
When the product happens to be a costly one and a hi-tech one, companies arrange school
demonstrations. In this case, consumers are invited to a particular place, say a hotel and
demonstrations are arranged. In computers, several companies in India organize this type of
demonstration.
Door-to-Door Demonstrations
Consumer product companies quite often resort to house-to-house demonstrations. It is considered a
highly specialized field of sales promotion. Salesmen employed for such demonstrations are given
special training to handle peculiar situations involved in this field.
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Demonstrations to Key People
Sometimes, demonstrations are organized for the benefit of key people and influential persons.
Journalists, and other media men, community leaders, etc, are invited and the product is introduced
to them.
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Demonstration is a good selling technique, which involves the cooperation of sales representatives
and prospective consumers in the actual process of demonstration of the product. Participation of the
consumer persuades him to learn more about the product and it serves as a persuasion for him to try
the product.
Trade fairs and exhibitions are extensively used sales promotion tools. They also form one of the
oldest practices in sales promotion. Trade fairs and exhibitions provide companies with the
opportunity of introducing and displaying their products. This brings company’s products and
consumers in direct contact with each other. ‘Seeing is believing’ is a concept behind large-scale
exhibitions.
Coupons, premiums, free offers, price-offs, extras, instalment payment offers
Coupons, premiums, free offers, price-offs, etc, have become common and effective sales promotion
tools.
Coupons
Coupons are certificates, which offer reductions to consumers for specified items. They are
distributed through newspaper and magazine advertisements, or through the package of the
merchandise, or even by direct mail. Coupons normally perform two specific functions for the
manufacturer. Firstly, they enthuse the consumers to exploit the bargain. Secondly, they serve as an
inducement to the channel for stocking the items. The manufacturer thus succeeds in attracting
consumers as well as in prompting the channel to stock the merchandise through introducing
coupons. They are useful for introducing a new product as well as for strengthening the sale of an
existing product.
Premiums and Free Offers
In the Indian markets manufacturers extensively use today, premiums, free offers, and price-offs.
Sometimes back, ‘Aristocart’ moulded luggage introduced an attractive sales promotion offer. It also
ran and ad campaign in support of the sales promotion endeavor. Aristocrat announced:
“If you buy an Aristocrat within the next week, you get a Philips 2 Band transistor worth Rs 266-free
And the ad repeated the message, “its only for a week, starting today”.
Price-Off
Hawkins pressure cookers have come up with several sales promotion schemes during the last few
years. In one of the schemes Hawkins announced
Upto Rs 150 off on a new Hawkins in exchange for any old pressure cooker, and the ad specified
that the offer is open only up to a particular date.
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Instalment Offers
Washotex washing machines came up with “pay 20% now, take home Washotex” scheme. The
consumers were offered the facility of paying the balance in 24 equal monthly instalments. For a
high priced product like a washing machine, the offer proved to be a very effective sales promotion
measure.
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Free Samples of the Product
Free samples are offered to persuade consumers to try them out. By offering free samples to a large
section of a new market, a company tries to gain entry into that market. Of course, the constraint in
utilizing this tool is that the product should be of low unit cost and susceptible to frequent repeat
purchases. Soaps, detergents, coffee and toothpastes are examples of products, which are normally
popularized by providing free samples. In fact, even a newspaper, Indian post, was introduced and
popularized through this method.
Gifts
Companies also distribute gifts to people-customers, dealers and influential and key people. These
gifts include, pens, pencils, calendars, diaries, table decorations, etc. gifts will carry the company’s
name and logo. The gifts are intended to create goodwill towards the company and indirectly
promote the company’s sales interest
Contests
Contests of various kinds constitute another widely and commonly used sales promotion tools. There
are ‘dealer contests’ meant exclusively for dealers of the company and ‘consumer contests’ open for
all. Companies use both dealer contests and consumer contests. While dealer contests normally
remain closed affair between the company and its dealers, consumer contests are given wide
publicity to attract the participation of a widely scattered consumer base. Big outlays are naturally
allocated for consumer contests because they need wide publicity and attractive prizes/
Consumer Contests
Consumer contests take a variety of forms – quiz contests, beauty contests, scooter and car rallies,
lucky draws, suggesting a brand name, coining a slogan, suggesting a logo, etc. Whatever be the
type of contest – filling up the quiz, writing 25 words about the brand, or taking part in a rally – the
intention of the marketer is to create widespread action and news around the brand. To get the
consumer interested in the brand and induce him to buy it is the central idea in all consumer contests.
Success of the Contest Depends Upon Several Factors
Contests can be classified under ‘skill competition’ or ‘chance’. When the participant has to suggest
a name to a brand, it involves a skill on of the participant. When the number of a coupon claimed by
the consumer in included in a draw, the contest falls under chance. Though ‘contest’ is used as an
all-rounder term, it has a specific meaning in the context of sales promotion. A ‘contest’ is one in
which consumers have to submit an entry. And the entries are judged for selecting the best entry. In
‘Sweepstakes’, there is no such judgment. Consumers enroll their names for a draw. In India,
normally the contests combine the salient features of sweepstakes as well.
Studies show that for contests to succeed, they must be simple to operate from the standpoint of the
consumer. If the consumer has to go through difficult and time-consuming procedures, he will not
take part in the contest. The prizes and prize money are other major considerations that decide the
success of a contest. When fabulous prizes are announced and the procedure suggested for
participation is also simple, the contests attract wide attention and arouse consumer interest and
participation. Another condition for the success of the contest is the publicity given to it. Through
various media and also through POPs at retail stores, contests can be given publicity. Another
precondition for the success of the contest is the current of honesty behind the offer. The public
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should perceive the whole thing as genuine. All these ideas are pointing towards one fact – the retail
store is a powerful instrument through which a marketer can communicate with his prospects.
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Store Choice is linked to Store Image
The choice of a store by a consumer depends to a large extent on what the store communicates to
him. Store choice is the result of the process whereby the consumer compares the characteristics of
the given store, as communicated through the store image, with his evaluative criteria of a ‘good
store’. ‘He works out four steps in his mind before making the store choice: formulate the criteria,
identify the characteristics of the given store, compare the two and decide whether the given store is
acceptable or not.
It is not as though consumers go through this process before each store visit. If past experiences with
a store have been satisfactory, the store is usually revisited without re-evaluation. Again, it is not as
though the consumer elaborately thinks out each of the four steps mentioned above before making
the store choice. But the process does take place in his mind. And in this process, the communicative
element of the store is the most important aspect. In certain cases, the very name of the store or its
category quickly triggers off in his mind the required responses and the decision. For example, hem
may have in his mind certain ready associations with names like ‘supermarket,’ ‘cooperative store’,
‘Discount store’, and ‘Exclusive shops’. In other cases, his mind quickly sifts the criteria such as
location, the salesmen in the store and the nature of the clientele patronizing the store.
So, the store is a good marketing communication tool. In the case study on marketing strategy of
Reliance Industries, we have seen the company used the showroom idea in developing the channel.
The chain of exclusive VIMAL showrooms established throughout the country by the company is a
telling example of channel becoming a powerful tool of marketing communication and promotion.
Same is the case with Titan Watches. As already explained in the case study on Titan Watches, the
nationwide chain of Titan showrooms contributed a great deal to the instant popularity of Titan
Watches.
Promotion as a Component in Marketing Communication
We have so far discussed the first three components – product, price and place – of marketing
communication. We are now coming to the last and the most substantial component – promotion.
The very fact that promotion was for quite a long time considered as synonymous with marketing
communications, is a pointer to its premeneint role in marketing communications. As already
mentioned in the opening paragraph of this chapter, promotion itself consists of four different
components, namely:
 Personal Selling
 Advertising
 Sales Promotion
 Publicity
Personal Selling
We shall discuss in detail the importance of personal selling and the management of the personal
selling function. In this section, we are mainly concerned with the communicative role of personal
selling.
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Face-to-face Transaction
Personal selling is unique as it is a face-to-face transaction between a salesmen and a prospective
customer. Evidently, a well-trained and competitive spirited salesman can be an effective
communication instrument. His knowledge about the product, the degree of his familiarity with the
customer, whether he is handling a new customer or an established customer, the degree of his
involvement in the company he is representing, the level of his motivation and his own convictions
about the quality and performance standards of the product, will be the determining factors in his
role as a communicator.
Product Knowledge helps the Salesman in his Communication
Product knowledge is an important asset to a salesman for successfully communicating with his
customers. This is true especially when he is dealing in products of a technical or semi-technical
nature. A customer, who is not well versed with the new product or brand, literally looks up to the
salesman to explain the salient features and the distinctive attributes of the product. If the salesman
fails in his role as a technical guide, he fails in his marketing communication. In the case of
industrial products, the role of salesmen as marketing as marketing communication is all the more
important.
Customer – Salesman Identification
It has been found that if the customer finds the salesman relatable to himself in age, culture,
language, dress-style, etc, the customer is likely to develop a favourable response towards the
salesman. It is evident that apart from the product knowledge and technical expertise of the
salesman, his own total personality including his language, looks, style, age, smartness and manners
are communicative cues to the customer.
It is, however, not enough if the salesman commands product knowledge and technical expertise,
and possesses similarities with the customers. An important factor in his communicative role is his
ability to listen. A salesman may go on explaining about a product to his prospective customer, but
that does not mean he is an effective the prospective buyer might express about the product. And it is
not enough if he listens, his customer should feel he is listening. The ability to listen has to be
developed and cultivated as an inseparable quality of the salesman. Listening also is a form of
cooperation with the customer. When he listens to his customer, he is actually co-operating with the
customer in the problem solving process and it even facilitates the purchase. So, the ability to listen
will enhance the communicative efficiency and the communicative image of the salesman.
Rights Sales Message Leads to Effective Marketing Communication
Apart from the salesman and his characteristics, the sales message is also an important factor in
communication through personal selling. The salesman may have technical knowledge about the
product. Still, if the sales message-the content, the language, the presentation and the style of
message-is not appealing and convincing, he may not succeed in his communicative role.
Experiments have shown that in the case of technical products, sales messages prepared well in
advance, and presented in an apparently extempore manner, have been successful in evoking a
favourable response from knowledgeable customers. Sales messages, which are evasive and slip,
shod in construction and content will upset the communicative effectiveness of salesmen. The
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company has a direct role in providing them with good and effective sales messages prepared in
advance for making the communication job effective. This is especially true in industrial marketing.
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Personal selling, as a marketing communication tool is usually more effective in the trial stage and
evaluation stages. The marketing communicator has to constantly remember that personal selling is
but one of the communication tools and it has be ideally supplemented by other components, if it
were to become effective in its communicative role. Its role in the total promotion programme
should be identified and marketing effort should be allocated accordingly to obtain the best results.
Publicity
Publicity is the fourth major tool in promotion. Whereas advertising, personal selling and sales
promotion are designed and controlled by the firm; publicity is not easily controllable by the firm.
Another distinctive feature of publicity is that an identified sponsor does normally not pay it for.
The firm must properly plan its publicity. A good publicity campaign often builds a publicity story,
which describes innovations or improvements in products or services of the firm. Or it may be built
around some topic of current importance to the public. The significant aspect is that the contents of
the publicity story have to be newsworthy and of interest to a large section of the public.
Publicity – A Potent Tool of Marketing Communication
Large firms normally try to control their publicity through constant press releases, press conferences,
and letters to editors, etc. quite often, they send out a variety of news releases about their products
and services and their achievements in specified fields, which may be of interest to the public. Such
activities are intended to build a favourable and positive public image of the firm.
It is not always possible for a firm to control publicity in its favour. An adverse message appearing
in some media about a specified product/brand may upset the company’s image. Unless the firm has
good relations with various media, unfavorable news may often appear. That is why large firms
always keep a constant vigil on their media relations. This is also essential because news items
appearing in the press or similar media have a greater degree of credibility for the public than the
advertising message designed by the company. A consumer may ignore the latter because he knows
that it is designed by the company to popularize its products. But news items in mass media are
perceived as more objective and consumers believe news stories more than advertising stories. This
makes publicity a very potent tool in marketing communications. If publicity is ignored it can harm
the entire communication strategy of a firm.
Marketing Communications – a Crucial Function
In the preceding pages, we have provided an overview of marketing communications. We have
emphasized the fact that all the four Ps of marketing have a marketing communication role. These
discussions reveal that marketing communication is a dynamic process. By releasing an
advertisement, or by offering a price reduction or by introducing an attractive packing, the marketing
communications job is not over. It is a larger process and a continuous one. It involves a continuous
dialogue between the firm and its customers. The marketing communicator has to constantly adjust
his messages to the changes in the social and business environment. The various communication
tools available to him have to be exploited imaginatively. The potential of every tools available to
him, and he has to use them in such a way that one supports and supplements the other. If the
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different communication tools pull in different directions, it may nullify his communication effort.
So marketing communications must be conceived and executed within the framework of a unified
and effective strategy.
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The Changing Nature of Marketing
Marketing and the marketing communication mix are changing. New insights, new tools, new
opportunities and new challenges are emerging as the 21st century progresses. The world’s 61/4
billion consumers and almost 400 million business customers are becoming increasingly accessible.
And so too are your customers ready targets for new global competitors. New pressures also merge
as managers operate in delayered organisation, stripped of supporting services and yet freed form the
quagmire of tier upon tier of management. This means more mangers need to understand marketing
which, itself, is changing.
Marketing has moved ‘customer acquisition’ (winning new customers) through ‘customer retention’
(keeping customers for life) towards ‘customer selection’ (dumping unprofitable customers while
selectively seeking and keeping the more profitable ones). This is sometimes called ‘adverse
selection’. It is becoming obvious that some customers are promiscuous, non-loyal bargain hunters
who exploit any sales promotion and move on to the next supplier as and when the next special offer
appears. These customers cost a lot for very little return; in fact, most of them are unprofitable. Only
17 per cent of companies know which are their best customers, according to PA Consultants in 2003.
Given that some estimates suggest that new customers cost five times more than existing customers
or, put another way, selling to existing customers can be five times more profitable than winning
new customers, you can see how it pays to know and love your customers, particularly the loyal and
profitable ones. Some customers become loyal because they prefer your product or service, others
want a stable relationship with one supplier, others spend more, pay more quickly, require less
service. Dell CEO Michael Dell says that his most valuable customers are not his biggest or his most
profitable ones, but those that ‘teach him the most. Although recovery strategies (for lost customers)
are important, some defectors are not worth saving. Carefully designed customer selection strategies
can leave the competition with nothing but undesirable customer segments to fight over.
Marketing and marketing communications are changing. Strategic alliances (partnership marketing)
offer new communication channels into existing and new markets that were simply not though of
five years ago. For example, Manchester United (MUFC) and Lycos UK have embarked on a £2
million communications partnership. MUFC guarantees that a number of its sponsors such as
Vodafone, Nike, Pepsi and Budweiser will buy advertising space on Lycos. MUFC will also supply
content such as Web chats with players and exclusive editorial online through Lycos. In addition,
Lycos UK has become MUFC’s exclusive partner to sell ad and sponsorship packages on the MUFC
Web site. This deal supports MUFC’s key objective of building its global fan base through
partnership deals. Lycos UK becomes a platinum sponsor of MUFC, which gives Lycos
advertisements priority positions at the ground and in the match programmes. The final piece of this
creative jigsaw is that the Asian division of Lycos will build a Chinese language site for MUFC and
help to build content for other non-English speaking emerging markets.
There has been a clear shift of focus and budget resources into interactive online marketing. Even
the traditional suppliers, or agencies, are changing. Apart form changing the services they offer, they
are changing their names to reflect changes in the marketing services marketplace. Burson
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Marstellar, the world’s biggest PR agency, has dropped ‘public relations’ from its name, and Saatchi
& Saatchi has dropped ‘advertising’ form its name. Managers too have to change to accept the need
for ‘lifelong learning’, and continually update and improve themselves with new skills, new insights,
and new tools.
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Before looking at the marketing communications mix and the marketing mix, consider briefly
marketing. A simple dictionary definition of marketing reveals: marketing, n., and the business of
moving goods from the producer to the consumer’. ‘Goods’ can be taken to mean goods or services.
The Charted Institute of Marketing in the UK defines marketing as: ‘the management process
responsible for identifying, anticipating and satisfying customer requirements profitably’. Some
years ago the American Marketing Association spent time and effort considering the appropriateness
and accuracy of its definition of marketing. Its new definitions incorporated one major change – it
tool ‘profit’ out, possibly because it excluded the vast armies of marketing professionals who work
for charities and other non-profit making organizations. Perhaps the UK definition could replace
‘profitably’ with ‘efficiently’, or ‘in a way that meets the organisation’s goals’? A simpler definition
is ‘marketing is the selling of goods that don’t come back to people who do’. ‘Goods that don’t come
back’ emphasizes the importance of matching the promise (made by, say, the advertising or the
packaging) with the reality of the products or service’s quality, i.e the level of quality should match
that which is adverse. In the long term it does not pay to cheat the customer.
Real marketing success depends on repeat business, and that is where’ people who do come back’
embraces the customer’s ‘lifetime value’ concept. Customers do not buy just one can of beans, one
cars and dozens of photocopiers during their ‘lifetime’. There the marketing challenges lies; in
attracting and retaining profitable customers efficiently. A move away form the ‘one off sales
syndrome’ allows marketing horizons to broaden to lifetime customers and lifetime strategies. And
today marketers are really interested in separating unprofitable form profitable customers, so that
those customers who rally do contribute to the bottom line can be nurtured. Lifetime customers are
built through strong relationships, which, in turn, require relationship-marketing skills. Another set
of relationship skills is also emerging in the form of marketing marriages. Marketing marriages such
as joint promotions, shared databases, shared distribution networks and strategic alliances offer new
opportunities for existing markets but also offer new routes into global markets previously
inaccessible because of an organisation’s limited resources.
Until marketers justify the value of marketing, it will not be represented at board level. It is not
surprising that fewer than 10 per cent of the FTSE 100 companies have marketing directors on their
boards. As is commonly quoted, ‘what can’t be measured cant be managed.’ Therefore, one can
understand why many businesses do not take marketing seriously despite the fact that the world
renowned management guru peter Ducker has stated that ‘Any business has two and only these two
basic functions: marketing and innovation’ (1995). Although he said it half a century ago, it is still
valid and commonly quoted today. All marketers must be mindful of the need to measure the
effectiveness of all marketing activities. The world of marketing communications has moved on
form the days of big budgets, caviar, foreign shoots, 60 seconds TV commercials and little
accountability, towards a more demanding business environment that excepts marketers to be able to
quantify the benefits of their actions.
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The Marketing Mix
The marketing mix is essentially a conceptual framework that helps to structure the approach to each
marketing challenge. There are many different approaches to the marketing mix, ego 4Ps, and 7Ps.
Canadian author Jerome McCarthy first called the 4Ps the marketing mix. Criticized by some as
oversimplified and by others as outdated, the 4Ps nevertheless do provide a basic framework. These
four ingredients (product, price place/distribution and promotion/communication) can be mixed
together in an infinite number of ways. Some argue that the most important P people are missing.
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This can be interpreted as customers or as staff. Although originally used by FMCG (fast moving
consumer goods) marketers, the 4Ps were also borrowed and used by service marketers (e.g.
restaurants) until they developed the 7Ps. The additional Ps covered people (staff), physical evidence
(e.g. buildings and uniforms) and processes (methods of producing, delivering and consuming the
service). It is interesting to see how the FMCG marketers can how borrow the 7Ps.
In 1961, Albert Frey suggested that all the marketing mix variables could be categorized into just
groups: the offering (product, packaging, service, brand and price) and The Methods/Tools
(distribution channels, personal selling, advertising and sales promotion). Whichever approach you
take, it is the combination of these components, and a fifth P, people (customers and competition),
which are the basic building blocks of a marketing programme. The marketing mix variables are
usually considered as internal variables over which manager has control and makes decisions (albeit
influenced by customers, competition and other external uncontrollable factors).
It is worth remembering that all of the marketing mix communicates. A poor quality product or
service generally says more other user than any amount of advertising. Price communicates, e.g.
high price sends a different message to allow price, and price is used by many buyers as an indictors
of quality. The place of purchase also communicates, e.g. an item purchased in Harrods has a
different perceived value to an item purchased form a street stall. The fourth P, promotion, has its
won mix of communication tools, which are sometimes called the promotion mix or the
communications mix. This mix includes every communications tool that is available to the
organisation. The relation of the communications mix to the marketing mix.
The fifth P, people or staff, communicate, in fact create, a good or bad experience through the
quality of service delivered at any particular time. Interestingly, according to MORI in 2002, one in
six customers fail to complete a purchase because of the way they were treated by staff. Some
companies, such as prêt a Manger, encourage managers to select staff by voting on whether they get
the job after only a day’s trial. Physical evidence communicates, as demonstrated by the physical
presence, style, location and decoration. it grabs attention, interest and, to some, creates the desire to
enter and explore. Process, the final P, also communicates. if McDonald’s process was slow, sloppy
or dirty, it would send out negative messages to the customers and sales would suffer.
The Communications Mix
Sometimes referred to as the promotional mix, the communications mix lists all of the
communications tools available to a marketer:
1.
Selling
2.
Advertising
3.
Sales promotion
4.
Direct marketing
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5.
Publicity (and public relations)
6.
Sponsorship
7.
Exhibitions
8.
Packaging
9.
Point of sales and merchandising
10.
Word of mouth
11.
E-marketing
12.
Corporate identity
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This list is not any order of priority, since different industries lay different emphasis on certain
communication tools, was an FMCG (such as a tin of beans) manufacturer may consider advertising,
packaging, sales promotion and point of sales to be the most important tools, while a heavy
industrial machine manufacture may lay emphasis on selling, exhibitions and word of mouth. The
second part of this book devotes a chapter to each of the communication tools listed in the
communications mix. The next couples of paragraphs clarify and explain the interpretation and
categorization of the marketing communications clarify and explain the interpretation and
categorization of the marketing categorization of the marketing communications mix, since many
marketing professionals interpret or categorize them differently.
Direct marketing draws on, and integrates with, advertising and sales promotion, and includes direct
response advertisements, direct mail and telemarketing/telesales. Publicity means positive editorial
coverage in the media; it is not mean to include ‘bad press’. It does include stunts, or events, as well
as certain other techniques.
The marketing communications mix should, in one way, include employees and customers since
‘word of mouth’ can be extremely effective among their own networks. Their salaries and wages are
not part of the communications budget but they are worth including in some of the communications
activities that enhance the word of mouth process. Although selling is all about communicating,
some companies choose to leave selling and sales management out of the communications budget
and put the sales force into their distribution plan instead. This makes sense, since one of the sales
force’s main responsibilities is to service existing distribution channels and penetrate ones. However,
since face-to-face selling is a potent marketing communications tool (and expensive on a cost per
thousand contact bias), it is clearly included in the marketing communications mix.
It is worth remembering that customers and distributors are not the only target audience. There are
other ‘stakeholders’ such as shareholders and employees who have a keen interest in the business.
See the diverse range of audiences (stakeholders) with which wind farm company future wind
partnership must communicate in order to grow clean energy.
Mixing the Communications Mix
Should more be spent on sales promotions than on advertising? What would happen if a company
(like Heinz) switched all press, print and TV advertising over to direct mail? Or perhaps it should
spend half on advertising and half on sales on sales promotion and exclude publicity? Almost every
promotional activity involves sacrificing something else. Advertising is still seen by many in the UK
as the most effective way to nurture a brand’s image over the long haul, whereas sales promotions
tend to be seen as shorter term, tactical, temporary sales boosters (although there are exceptions,
where some companies actually try to develop strategic promotions that build on each other while
strengthen brand values and customer loyalty). Professor Ehrenberg’s pan-European sales promotion
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research claimed that sales promotions had basically no positive effect on brand building, brand
loyalty and repeat purchase pattern. This is not surprising, since the research focused mostly on price
promotions (money off discounts, etc). Price discounts dilute the brand franchise or the quality in the
communications mix chosen by American companies:
Many giant consumer good companies are saddled with huge levels of debt so, in category after
category, brand mangers are scrambling to boost quarterly sales instead of investing in image
advertising to nurture brands for the long haul.
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To increase sales they are shifting marketing dollars form ads to promotions such as coupons,
contests, and sweepstakes and, because most promotions are placed locally, companies are shifting
dollars form national to a local media. Many experts believe that such strategies carried to an
extreme run the risk of damaging valuable brand franchises that enable marketers to price their
products at a premium.
A lot depends on the objectives and the specific responses required. Building awareness requires
advertisings and PR, while brand switching requires some kind of integrated sales promotion
initially supported by advertising or direct mail. There are always exceptions; some advertising and
sales promotions are designed to create a database which in turn allows a dynamic dialogue and
relationships to be nurtured. Communications need to flow to all the stages through which a
customer moves on his route towards making a purchase and subsequent repeat purchases.
Integrating the Communications Mix – Initial Steps
Each element of the communications mix should integrate with other tools of the communications ix
so that a unified message is consistently reinforced. Some major advertising campaigns are
supported by PR activity, and many advertisements have press launches not for the product but for
the advertisement itself. Thus publicity and advertising work together to create a bigger impact in a
cost effective way. Press launches and photo opportunities were seized on by the political parties
when they released new advertisements during celebrates or senior politicians. The free media
(editorial) coverage that followed was often greater than the coverage generated by advertising.
Here, below the line (PR) supports above the line (advertising) activity.
Sales promotion, another below the line communications tools, is often tied in with, or supported by,
advertising or PR or both. It is no use having a great sales promotion campaign if no one hears about
it in the first place; so, instead of the product being advertised, it is the sales promotion that is
advertised. Here, above the line supports the below the line activity. There are publicity
opportunities that public relations professionals can exploit if they are briefed and integrated into the
overall programme at an early enough stage. Some sales promotions get national coverage without
any above the line support. A few years ago British Airways launched a sensational sales promotion
when it announced free flights to anywhere in the world. The sales promotion was so newsworthy it
hardly needed any advertising by the time the public relations people had maximized the editorial
opportunities. The sales promotion also helped to build a database for future direct mail activities.
Many direct response advertisements (with coupons or free phone numbers) offers an incentive,
premium, gift or sales promotion. The term ‘direct promotion’ succinctly combines direct marketing
with sales promotion. Many FMCG (such as groceries) sales promotions are also promoted on the
product itself (on pack promotion). Anew pack or new sales promotions-usually has to be brought to
the attention of the retailer by the sales force. They need to be fully briefed and may need new
literature to leave with the retail sales promotion insides a retail outlet. A modified pack (carrying
the on pack promotion) has to be designed and produced. This means new stocks and so a properly
coordinated team has to briefed and ready to move into sometimes several hundred outlets within,
say, 24 hours. This is generally too big a job the regular sale force, so a team of merchandisers or
field marketing team sometimes supplements it.
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London’s Tate modern gallery a range of innovative creative non-commercial communications to
support the launch of the new gallery. These included 6 million special coffee cups for coffee
republic in its new La new Tate Café; Tate branded Wagamama (a top Japanese restaurant)
chopsticks; Tate Beer in London’s fashionable Mash restaurant; and a Royal Mail stamp. Some
marketers refer to these types of communications tools as ambient advertising; meanwhile, there are
a number of cutting edge communications tools emerging in the marketing such as forehead
marketing, viral marketing, experiential marketing and sensory branding. Communications tools
must integrate with each other. Integrating marketing communications requires people skills. Other
managers have to be convinced. To do this, a full understanding of the benefits fo integrated
marketing communications (IMC) is required.
Integrated Marketing Communications – the Benefits
Although IMC requires a lot of effort, it effort, it delivers many benefits. It can create competitive
advantage, and boost and profits, while saving time, money and stress.
IMC can wrap communications around customers and help them move through the various stages of
their buying process. The organizations simultaneously consolidates its image, develops a dialogue
and nurtures its relationship with its customers. This ‘relationship marketing’ cements a bond of
loyalty with customers that can protect them from the inevitable onslaught of competition. The
ability to keep a customer for life is powerful competitive advantages.
IMC also increases profits through increased effectiveness. As its most basic level, a unified
message has more impact than a disjointed myriad of messages. In a busy world a consistent,
consolidated and crystal clear message has a better chance of cutting through the ‘noise’ o f over
1,000 commercial messages that bombard customers each and every day. At another level, initial
rese4arch suggests that images shared in advertising and direct mail boost both advertising
awareness and mailshot responses. So IMC can boost sales by stretching messages across several
communications tools to create more avenues for customers to become aware, aroused and,
ultimately, make a purchase. Carefully linked messages also help buyers by giving timely reminders,
updated information and special offers which, when presented in planned sequence, help them move
comfortably through the stages of their buying process and this reduces their ‘misery of choice’
generated by the wide range of competitive offerings. IMC also makes messages more consistent
and therefore more credible. This reduces risk in the mind of the buyer and, in turn, shortens the
search process and helps to dictate the outcome of brand comparisons.
Integrated communications send disjointed messages that dilute the impact of the message. This may
also confuse, frustrate and arouse anxiety in customers. Integrated communications present a
reassuring sense of order. Consistent images and relevant, useful messages help nurture long term
relationships with customers. Here, customer databases can identify precisely which customers need
what information when, and throughout their whole buying life.
Finally, IMC saves money, as it eliminates duplication in areas such as graphics and photography
since they can be shared and used in, say, advertising, exhibitions and sales literature. Agency fees
are reduced by using a single agency for all communications. And even if there are several agencies,
time is saved when meetings brings all the agencies together for briefings, creative sessions, or
tactical or strategic planning. The reduces workload and subsequent stress levels.
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Integrated Marketing Communicators – the Barriers
Despite silos many benefits, IMC has many barriers. In addition to the usual resistance to change and
the special problems of communicating with a wide variety of target audiences, there are many other
obstacles that restrict IMC. These include functional silos, stifled creativity, timescale conflicts and a
lack of management know on how.
Take functional silos. Rigid organisational structures are infested with managers who protect both
their budgets and their power base. ‘Why should they their budgets and allow someone else to make
decisions which previously were theirs?’
Sadly, some organizational structures isolate communications, data and even managers from each
other; for example, the PR department often doesn’t report to marketing, the sales force rarely meet
the advertising or sales reps are not told about a new promotional offer! And all this can be
aggravated by turf wars or internal power battles where specific mangers resist having some of their
decisions (and budgets) determined or even influenced by someone form another department.
Here are two difficult questions – what should a truly integrated marketing department look like?
And how will it affect creativity? It shouldn’t matter whose creative idea it is, but often it does.
An advertising agency may be so enthusiastic about developing a creative idea generated by, say, a
PR or a direct marketing consultant. IMC can restrict creativity. No more wild and wacky sales
promotions unless they fit into the overall marketing communications strategy. The joy of rampant
creativity may be stifled, but the creative challenge may be greater and ultimately more satisfying
when operating within a tighter, integrated, creative brief.
Add different timescales into a creative brief and you will see time horizons provide one more
barrier to IMC. For example, image advertising, designed to nurture the brand over the longer term,
may conflict with shorter-term advertising or sales promotions designed to boost quarterly sales. The
two objectives can be accommodated within an overall IMC if carefully planned, but this kind of
planning is not common. A survey in the mid 1990s revealed that most American managers lack
expertise in IMC. But it’s not just managers, it’s also agencies and there is a proliferation of single
discipline agencies. There appear to be very few people who have real experience of all the
marketing communications disciplines. This lack of know how is then compounded by a lack
commitment. The following section, on the Golden Rules for IMC, examines this in more detail.
Integrated Marketing Communications – the Golden Rules
Here is how you can ensure you become integrated and stay integrated, with the 10 Golden Rules of
Integration.
1. Get senior management support for the initiative by ensuring they understand the benefits of
IMC. IMC fits with ISO 9001: 2000 as it requires companies to continually monitor all their
processes and procedures (including marketing) and continually seek ways to improve them.
With senior management support the IMC concept can move downwards and across the
organisation, provided the internal marketing of the idea is properly executed.
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2. Integrate at different levels of management. Put ‘integration’ on the agenda for various types
of management meetings whether annual reviews or creative sessions. Horizontally, ensure
that all managers, not just marketing managers, understand the importance of a consistent
message whether on delivery trucks or product quality. Also ensure that advertising, PR and
Sales promotions staff are integrating their messages. To do this you must have carefully
planned internal communicao9tjs, that is, good internal marketing.
3. Ensure the design manual or even a brand book is used to maintain common visual standards
for the use of logos, typefaces, colours and so on.
4. Focus on a clear marketing communications strategy. Have crystal clear communication
objectives; clear marketing communications add value to (instead of dilute) the brand or
organisation. Exploit areas of sustainable competitive advantage.
5. Start with a zero budget. Start form scratch. Build a new communications plan. Specify what
you need to do to achieve your objectives. In reality, the budget you get is often less than you
ideally, so you may have to prioritise communications activities accordingly.
6. Think customer first. Wrap communications around the customers’ buying process. Identify
the stages they go through before, during and after a purchase. Select communication tools
that are right for each stage. Develop a sequence of communications activities which help the
customer to move easily through each stage. One car company identified 17 points of
customer contact. Marketers have to think through the detailed stages of the mental,
emotional and behavioural processes through which customers move when they buy different
products and services.
7. Build relationships and brand values. All communications should help to develop stronger
and stronger relationship with customers. Ask how each communications tool helps to do
this. Remember customers retention is an important as customer acquisitions.
8. Develop a good marketing information system which defines who needs what information
when. A customer database, for example, can help the telesales, direct marketing and sales
force. IMC can help to define co-vital information. Does the database have a field for
customer complaints and suggestions?
9. Share artwork and other media. Consider how, say, advertising imagery can be used in
mailshosts, exhibition stands, Christmas cards, new realises and web sites. Some jeans
companies are putting their web addresses on the jeans labels.
10. Be prepared to change it all. Learn form experience. Constantly search for the optimum
communications mix. Test. Test. Test. Improve each year. ‘Kaizen’.
Intensive Marketing Communications
Buying models are helpful when considering how to plug all the communications gaps or channels
that lead to a buyer’s mind. By identifying the stages a buyer goes through, and all the possible
communication channels, it is possible to force a product or service into the mind buyer (if the
resources are available). Hopefully, what is forced in is accepted and perceived to be pleasant rather
than resented and rejected.
A major soft drinks manufacturers once tested this idea in a European town. There was blanked local
advertising supported by street bands, free samples, free gifts, new point of sales material in every
CTN (confectioner, tobacconist and newsagent)
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Even extra vending machines and street stalls were placed strategically to maximize the consumer’s
opportunity to sample and buy the brand. The consumer could not avoid the brand. Every route to
the consumer’s mind was filled.
The terms ‘share of mind’ is an awesome piece of marketing jargon. If effectively means how many
minds you can get a brand or an organisation into. Share of mind can be bought by increasing the
marketing communications spend. Many companies obviously want to keep their brands in the front
of the buyer’s mind (front of minded awareness’). This obviously depends on the quality and
frequency of advertising and other marketing communication tools compared to a competitor’s
communications. ‘Share of voice’ refers to the share of advertising spend against the total market
spend on advertising. Of course it isn’t all plain sailing since, first, most companies have limited
resources and, second, there is a phenomenon called ‘competition’. They may be trying to use same
communication channels.
Marketing Mix Must also Balanced and Integrated
A well planned and carefully executed marketing communications programme cannot, on its own,
guarantee success. This is dependent on a balanced marketing mix. A great advertisement may
succeed in getting people to go out and ask for a particular product, but the overall plan fails if, say,
the place is wrong. Too much ‘pull’ and not enough ‘push’. Perhaps less investment in advertising
(‘pull’) and more investment in sales training (‘push’) or simply more direct investment in
distribution (new delivery vehicles, more drivers, better serviced vans, bigger stocks, smaller
minimum orders, quicker deliveries, etc) might enable the right good to get to the right place at the
right time. Similarly, the promotion and the place might work to bring a potential customer close to
buying a particular product but he price might just put the product out of reach. Finally, the product
(or service) must match the promise made through the communications mix if long-term success
(repeat sales) is to be achieved. A customer only buys a bad product once. This means that defunct
investment decisions have to be made in areas often outside the marketing manager’s control, e.g.
product quality programme, product design programme, new product development programme,
production equipment, staff motivation customer care programmes and so on. Today’s businesses
are leaner and flatter and run by multifunctional (and therefore multiskilled) mangers. Even those
managers who are not directly involved in marketing will require an overall integrated marketing
perspective, as they will have to balance financial decisions along with production, quality, human
resources and marketing decisions. Perhaps we will at last see more boardrooms displaying products
pictures of the organization’s product, services and employees?
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Module 13 Marketing Communications Strategy
Communications
2 A Theoretical Understanding of Marketing
2 A Theoretical Understanding of Marketing Communications
Communications Theory
What is interesting is the exchange of information. Communication is not a once way flow of
information. Talking at or at someone does not imply successful communication. This only occurs
when the receiver actually receives the message that the sender intended to send. Message rejection,
misinterpretation and misunderstanding are the opposite of effective communication.
Non-Verbal and Non-Verbal Communication
Although verbal and visual communications gain a lot of conscious attention, there are non-verbal
and non-symbolic ways of communicating, such as space, time and kinetics. Crowded areas, or lack
of space, send messages to the brain, which, in turn, can stimulate a different set of thoughts and a
different behavioural response. The opposite is also true: a spacious office or living room conveys
different images. In western cultures the use of time creates images, e.g. a busy but organized person
gives an impression of authority. ‘Thanks for your time’ immediately conveys a respect for and an
appreciation of a seemingly important person’s time. a busy diary can project an image of
importance. ‘I can squeeze you in on Friday at..’ implies seniority in the relationship. In the UK, the
term ‘window’ is now used for free time or space in a busy diary. Some advertisements sell products
and services primarily on time saving convenience benefits. In fact, banks are really time machines
that allow an individual to move forward in time by buying, say, house that would not normally be
affordable for 30 years. Finally, kinetics communicates. Gestures and movements send messages.
Even the simple, swift clicking of a briefcase, entering or leaving a room or closing or not closing a
door can communicate. Most of all, body language and facial gestures are powerful communicators.
An understanding of body language allows an individual to learn more about what another person is
really feeling. A smile, for example, communicates immediately, effectively and directly.
Semiotics
The field of semiotics (or gemology) opens up a rich discussion of how symbols and signs are used
in communications, particularly advertising. Audiences often unconsciously perceive images
stimulated by certain symbols.
Engel, warshaw and Kinnear (1994) demonstrated how Lever’s fabric softener Snuggles uses a
cuddly teddy in its advertising. Carol Moog, advertising consultant and psychologist, says that
The bear is an ancient of aggression, but when you create a teddy bear, you provide a softer,
nurturing side to that aggression. As a symbol for tamed aggression, the teddy bear is the perfect
image for a fabric softener that tames the rough of clothing.
Engel, Warsaw and Kinnear comment:
The key point here is that if marketing communicators are not aware of the subtle meaning of
symbols, then they are liable to communicate the wrong message.
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Miss Moog’s advice to Pierre Cardin on its men’s fragrance advertisement, which was designed to
show men who are ‘aggressive and in control’ splashing fragrance, was accepted but rejected! Miss
Moog saw ‘cologne gushing out of a phallic shaped bottle’ creating a conflict of images, since it
‘symbolized male ejaculation and lack of control’.
Module 13 Marketing Communications Strategy
Communications
2 A Theoretical Understanding of Marketing
Pierre Cardin acknowledged that she was probably right but decided to keep the shot, as it was ‘a
beautiful product shot plus it encourages men to use our fragrance liberally’. Closer to home,
Guinness used Rutgers Hauer’s black clothes and blonde hair in the now classic Guinness
advertisements to symbolize the pint of Guinness itself.
Communications Models
No simple diagram can reflect al the nuances and complexities of the communication process. This
section some basic theories and models.
Figure 1:A Single Step Communication Model
There are three fundamental elements in communication, the sender (or source), the message and
the receiver as shown below.
Sender
Message
Receiver
A Simple Compunctions Model
This basic model assumes that the sender is active, the receiver is inactive or passive and the
message is comprehended properly. In reality this is rarely the case. An understanding of the target
receiver or audience helps to identify what is important to the audience and how symbols, signs and
language are interpreted. The message is ‘dressed up’ or coded in an appropriate way, sent through a
media channel and, if it gets through all the other noise, finally decoded by the receiver. Guinness
advertisements basically ask their target audience to drink Guinness, but they are very carefully
coded. For example, ‘it is not easy being a dolphin’ were the only words uttered in one of their
television advertisements. The audience decodes the message (correctly or incorrectly) and
ultimately rejects, accepts, stores or decides whether to drink Guinness or not. Amidst and careful
coding and decoding there is noise, the extraneous factors that distract or distort the coded messages
as in the figure below.
Figure 2: The Communication Process (based on Schramm’s 1955 Model)
Noise
Sender
Encoding
Message
Decoding
Receiver
Feedback
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The sender monitors feedback (e.g. whether the receiver changes his behaviour, facial expression,
beliefs or attitudes) so that the message (and/or the channel in which it is sent) can be modified or
changed. With so many other advertisements out there it is easy to understand why so little
communication actually gets through and works on the target market.
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Module 13 Marketing Communications Strategy
Communications
2 A Theoretical Understanding of Marketing
Mass Communications
Despite the attraction of one to one marketing, mass communications such as television advertising
is still considered attractive because it can reach a large audience quickly and cheaply (when
comparing the cost per thousand individuals contacted. Much of this kind of mass advertising is
ignored or distorted by an individual’s information processing system. However, there is usually,
within the mass audience, a percentage who are either actively looking for the particular product
type or who are in a receptive state for this type of message. Mass communication is therefore of
interest to many marketing communicator. It is not the single step process it was considered to be in
the early mass communications.
This kind of inaccurate model of mass communication suggests that the sender has the potential to
influence an unthinking and non-interacting crowded. Audiences (receivers) are active in that they
process information selectively and often in a distorted manner (we see what we want to see).
Receivers (the audience) also talk to each other. Opinion formers and opinion leaders also influence
the communications process.
Katz and Lazars field’s two-step hypothesis (1995) helped to reduce fears of mass indoctrination by
an all-powerful media. It assumed mass messages filtered messages filtered through opinion leaders
to the mass audience.
When opinion formers (OF) are added in, the communications model becomes a little bit more
interesting. Opinion formers can be separated form opinion leaders. Opinion formers experts whose
opinion has influence, e.g. journalists, analysts, critics, judges. Members of a governing body.
People seek their opinions and they provide advice. Opinion leaders, on the other hand, are harder to
identify they are not formal experts, they do not necessarily provide advice but other buyers are
influenced by them. Other customers look towards them. Opinion leaders often enjoy higher social
status (than their immediate per group), are more gregarious and have more confidence to try new
products and services. Endorsements form both opinion formers and opinion leaders are valuable.
The opinion formers are often quoted in promotional literature and advertisements, while the style
leaders are often seen with the brand through clever editorial exposure engineering by public
relations professionals. This can be generated by collecting third party endorsements, creating events
around celebrities and ‘placing’ products alongside celebrities (e.g. branded mineral water on the top
table at press conferences or actual celebrities (e.g. branded mineral water on the top table at press
conferences or actual product placement in films.) in B2B markets blue chip customers are opinion
leaders and are much sought after, as their presence on a customer list influence other customers.
Both opinion formers and opinion leaders can contribute towards credibility. ‘Credibility before
visibility’ means that a solid platform of credibility should be developed before raising visibility and
high profile activities.
Multi Step Communications Model (a)
Communication is in fact a multifaceted, multi step and multi directional process. Opinion leaders
talk to each other. Opinion leaders talk to their listeners. Listeners talk to each other (increasingly
with discussion groups/internet groups) and subsequently feed back to opinion leaders. Some
listeners/readers receive the message directly.
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Module 13 Marketing Communications Strategy
Communications
2 A Theoretical Understanding of Marketing
Multi Step Communications Model (b)
Noise, channels and feedback can be added to the multi step model to make it more realistic. The
process of communicating with groups is fascinating. Groups roles (leaders, opinion formers/leaders
and followers), group norms and group attitudes are considered in ‘group influence. In fact, all the
intervening psychological variables can be added into the communications models to show how
perception, process. The intervening variables and some more complex models of buyer behaviour
are considered.
Wining over the opinion leaders can be key to any marketing communications campaign, whether
BSB or B2C. Take BSB: IBM linked up with the Marketing Society, as its 3,500 members
represented key movers and shakers in the business world. Consider B2C: Kangaroos trainers
targeted opinion leading celebrities such as Cat Deeley, Edith Bowman and kids TV show presenters
by giving by giving them free shoes.
Web Communications Models
Let’s take this a stage further and consider today’s web communications models which revolve
around the brand instead of simply being sent to the masses by the brand owner. Markets are
conversations. World of mouth works much more quickly online than offline. With the Internet came
the easier facilitation of customer communities, where customers can talk, first, to each other (C2C)
and, secondly, back to the company (C2B). The flow of communications eventually becomes like a
web communications between customers and opinion leaders all built around the brand.
The company facilitates these conversations. In doing so, it keeps close to customers, as if can look
and listen to what’s being said. It can also communicate easily with the customers and ultimately
develop strong relations with them. Newsgroup and discussion rooms hosted by the brand discuss
the brand, its application, problems, issues, ideas, improvements and a broader array of topics linked
with some of the brand values. In a sense, a web of conversations is spinning around the brand.
Customers talk to each other. For example, more than half of eBay’s customers come form referrals
(Reichfield and Schafter 2000).
The e-marketing team should also monitor user group sites it does not host; some of the truths may
be painful but extremely useful. C2C communications can be negative. Remember the Pentium chip
problem? It spread like wildfire as the worry spread online. C2C communications can also be fuelled
by some customer groups who set up fake sites and hate sites that are spreading negative messages
about brands. One type of CSC that is positive and in fact generates a lot of business is referral,
where happy customers become advocates and recommend other customers. Another positive form
of C2C and P2P is rival, where customers pass the message on. This is accelerated word of
announcements and invitations are good for viral marketing. Affiliate marketing also spreads
awareness of a brand among a community of relevant customers, who in turn to each other and can
spread ordinary or clever viral messages among their own communities. Implicate in all of these
communications models is permission based marketing. In this time compressed, information
cluttered world, customers resent unsolicited Spam. Excellent e-marketers win permission to send
future messages. If the customer agrees, a message is finally sent.
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Individually do talk to each other (at least 500 million on the internet and billions on the phone),
particularly when sharing personal product experiences. In fact, dissatisfied customers tell up to
another 11 people about their bad experience, whereas satisfied customers tell only 3 or 4.
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Module 13 Marketing Communications Strategy
Communications
2 A Theoretical Understanding of Marketing
As marketing guru Philip Kotler says, ‘Bad news travels faster than good news’. Although this is not
in the realm of mass communications, it does demonstrate how everything an organization does
communicate something to someone somewhere.
Understanding Multi Phase Communication
Whether online, offline or integrated, here is how an understanding of multi phase communication
helps many advertisers to communicate directly to the mass (through the mass media) and indirectly
through opinion leaders, style leaders, innovators, early adopters, influential individuals and opinion
formers.
Advertisers recognize than in each market there are smaller target markets of opinion leaders who
influence other members in the marketplace. Major brands can maintain their credibility by talking
(advertising) specifically to these leaders as well as talking to the mass through other media channels
(sometimes with messages tailored for the two groups). Whether advertising hi-fis, fashion, tennis
rackets or social issues, multi step communications can be employed.
In the world of fashion, the leaders re called ‘style leaders’. Even cult fashion products can be mass
marketed by carefully splitting the messages between style leaders and the mass. While the leaders
want to set themselves apart form the rest, the mass market consciously and or unconsciously looks
to the leaders for suggestions about what to buy. The difficulty lies with success as the mass-market
buys more, the leaders lose interest unless they are reinforced with brand values that preserve the
brand’s credibility among the cognoscenti. This is important because if the leaders move away
today, the mass sales will eventually start falling away next year after. So, in addition to the mass
advertising, some brands use small use small audience, targeted, opinion leader media to send the
‘right’ message to reinforce the leaders’ relationship with the brand.
Hi-fi trendsetters need different kind of advertising than just colour supplements with glossy brand
images. These ‘innovators and early adopters’ read additional magazines and look for more detailed
technical information in music magazines or specialist hi-fi magazines buyers’ guides, etc. less
knowledgeable buyers often refer to a friend who is a bit of a music buff (innovator or adopter) for
an opinion on a brand of hi-fi before deciding to buy. Just getting the product into the hands of the
opinion leaders can help a brand competing in a large market. US marketing guru Kotler suggest that
special offers to opinion formers can work wonders.
A new tennis racquet may be offered initially to members of the high school teams at a special low
price. The company would hope that these star high school tennis players (of influential individuals)
would ‘talk up’ their racquet to other high scholars.
An understanding of multi phase communication processes can contribute something to the
development of social issue campaigns like that concerning AIDS. The initial stages of the campaign
were temporarily restricted by inaccurate editorial coverage. Some tabloid journalists were feeding
conflicting messages to the same mass which the advertising was addressing was addressing. The
factual advertising was switched into the press so that opinion formers (journalists) could hot write
any more conflicting and inaccurate reports.
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The power of influential individuals and influential organizations can also be seen in industrial
markets. An entire industry may follow well-respected and highly successful companies initially.
Marketers in consumer markets can also focus on the people who are the first to buy new ideas.
Module 13 Marketing Communications Strategy
Communications
2 A Theoretical Understanding of Marketing
Better information today can provide a focused approach through database marketing, while the
imagery used can reflect the lifestyles, attitudes and aspirations of these ‘innovators/early adopters’
of fresh ideas.
Who are these ‘early adopters’ of new products and services’ are they different form the other
potential customers in the same in the same market? How do they ‘adopt’ new products or services?
Is there a particular type of process through which they pass? The final section of this chapter
provides some answers.
Word of Mouth
Word of mouth is the potent of all the communications tolls. Product/service quality and customer
care greatly influence word of mouth. Record label Telstar has worked with peaopplesound.com
using its people to recruit mobile users (and, importantly their numbers), who then receive a Misteeq mobile logo and ring-tones. The Body Shop avoids advertising yet have also succeeded through
word of mouth. Word has spread about the new web company Nua. Although it is physically based
in Ireland, word of mouth has encouraged over 100,000 business executives to subscribe to its free
electronic web surveys. Many Internet campaigns are designed to encourage the most potential tool,
word of mouth. Regardless of source, and often regardless of fact, people do talk. Rumours can
spread like wildfire without any mass advertising. People do talk to each other, whether opinion
formers, opinion leaders groups of people talking on the Internet, on chat shows or on street corners.
Adoption Model
Several different hierarchical message models. The adoption model (Rogers, 1962) is one of these. It
attempts to map the mental process though which an individual passes on his journey towards
purchasing, and ultimately adopting (or regularly purchasing) a new product or service.
This somewhat simplistic hierarchical model is nevertheless useful for identifying, first,
communication objectives and, second, the appropriate communications tools.
For example, television advertising may create awareness, while a well-trained salesman of expertly
designed brochure may help the individual in the evaluation stage. In reality, the process is not
simply hierarchical. Some individuals more directly from awareness to trail, while others loop
backwards form the later stages by never actually getting around to trying the new idea,
subsequently forgetting it and then having to go through being made aware o fit again. Rogers was
also interested in how a new idea spreads or diffuses through a social system or market. He deafened
diffusion as ‘the spread of a new idea from its source of invention or creation Ito its ultimate users or
adopters’. Several groups who moved towards adoption – at different rates were identified. The first
groups try a new product were called ‘innovators;. They represent approximately 2.5 per cent of all
of the buyers who will eventually adopt the new product. Their profile was different from those who
were last to try a new idea (the ‘laggards’). Opinion leader characteristics were part of the
innovators. The key to the market is to identify, isolate and target resources at the innovators rather
than everyone (84 per cent will not buy the product until they se the innovators and early adopters
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with it first). The ‘early adopters’ are the second group to adopt a new idea (they represent 13.5 per
cent of the total market), followed by the ‘early majority’ (34 per cent), the ‘late majority’ (34 per
cent) and the ‘laggards’ (16 per cent).
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2 A Theoretical Understanding of Marketing
Each group has a different profile, encompassing income, attitudes, social integration, etc.
innovators are venturesome, socially mobile and key likes to try that are new. The early adopters
tend to be opinion leaders who carefully adopt new ideas early. In the retail sector, Nielsen identified
early adopters as multiple card holders (among other things), who are very different form single
cardholders in that they are significantly more promiscuous in their usage. The early majority adopts
earlier than the majority of the market and they are even more careful, almost deliberate, in their
buying process. The late majority only adopt after they have seen the majority of people try it. They
tend to be skeptical. The laggards are self-explanatory tradition bound and the last to adopt.
Many of the previously discussed models offer some insight into the communication process but,
almost invariably, they distort or oversimplify the process of communication.
The Complex Burger Buyer
Why buy a burger? The answer might be as simple as ‘because I was hungry so I bought a Big Mac’.
The real reason, however, may be quite different. Perhaps the buyer was in a receptive state for food
because of the time of the day. In the dame way that a stimulus such as a bell for Pavlov’s dog can
cause a dog to salivate, the highly visible yellow McDonald’s logo can act as a stimulus to the
customer to remind him of food and arouse feelings of hunger even salivation. Perhaps the yellow
logo also acts as a cue by triggering memories of the happy advertising images, which are learned
and stored in memory bank?
A teenage burger buyer may prefer McDonald’s because friends hang out there and it fells nice to be
in with the in-crowd (Maslow’s need to be accepted or loved; see ‘motivation’). May be the friendly
image and the quick service simultaneously satisfies two basic needs – love and hunger? Many
convenience purchases today are, in fact, thing else, to satisfy another need. It is likely that buyers
have many different reasons with different orders of importance. Different reasons with different
orders of importance. But why don’t they go into a Wimpy restaurant or a fish and chip shop instead
of a McDonald’s?
Choice is often influenced by familiarity with the brand, or sometimes the level of trust in a brand
name. Familiarity can be generated by actual experience and or increased awareness boosted by
advertising. If one brand can get into the front of an individual’s mind (‘font of mind awareness’)
through advertising, etc, then it will stand a better chance of being chosen in a simple buying
situation like this, unless, of course, the buyer has a preferred set of fast food prepared to search a
little harder (even cross the road) before satisfying the aroused need.
The choice of another group of burger buyers can be determined simply by location offering the
right goods or services in the right place at the right time at the right prices. Assuming this all
supported by the right image (e.g. clean and friendly, nutritious, fast service, socially responsible),
and then the marketing mix has succeeded in capturing this segment of non-loyal burger buyers who
have no strong preferred set of fast food outlets. Nice health conscious buyers may prefer a nice
warm cup of soup, why? What motivates them? Health? A desire to live longer? A fear of death? A
desire to be fit, stay slim, look good (esteem) or just feel healthy/feel good (self actualization) or
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perhaps it’s cheaper than a burger? Or is it because everyone lese in the office recommends the local
delicatessen’s soup (pressure to conform to group norms, desire to be accepted by a group again, the
need to be loved)?
Module 13 Marketing Communications Strategy
Communications
2 A Theoretical Understanding of Marketing
There are other possibilities that lie in the dark depths of our vast information storage chambers,
otherwise known as our unconscious. For example, in the 1950s Vance Packard suggested that:
The deepest roots of our liking for warm, nutritious and plentiful soup may lie in the comfortable
and secure unconscious prenatal sensations of being surrounded by the amniotic fluid in our
mother’s womb.
Impulse buying and repeat purchasing of low cost fast food obviously differ from the buying
behaviour involved in the purchase of, say, anew compact disc system, a house, a holiday or a fleet
of new cars for the company. It is likely that more ‘information search’ will occur than in the simple
stimulus response-buying model (McDonald’s yellow logo stimulates the senses and arouse hunger,
which generates the response buy a Big Mac). Regular low cost purchases are known as ‘routines
response behaviour’ and therefore have a different buying process than a high cost, high risk,
irregular purchase, which is known as a ‘high involvement purchase’. Some basic buying models
help to explain the different types of purchases and the types of buying involved.
Some people behave differently online than offline. They assume different pseudonyms and
personalities. Sometimes it’s hard to know who’s who online. As they say, ‘who knows you are a
dog online?’
Why do They Buy?
Marketing people really do need to know the reasons why buyers buy. There appears to be a host
conscious and unconscious reasons underlying why people buy what they buy. Some reasons are
more important than others to a particular segment. Some reasons are rational and some are
emotional. The split between the two is called the ‘emotional/rational dichotomy’. The late Robert
Gouezeta, former CEO of Coca Cola, once said, ‘we sell image. We don’t know to sell on
performance. Everything we sell, we sell on image’.
This rational and emotional quagmire is not restricted to consumer purchasing but applies also to
supposedly hard-nosed rational professional buying behaviour. Perhaps he was absolutely right when
you consider that many customers are prepared to pay 800 per cent more for the ‘the real thing’ than
an own brand cola from Asda. The authors were shocked to discover a 2-litre bottle of Cola -Cola
selling at £1.20 while on the same shelf Asda own labels 2 liter cola was selling for £0.15. The
bottom line is that marketing managers have constantly to ask question: ‘why are they buying or not
buying my products or services?’ the answers are not static, one-off pieces of research findings but a
constant flow of information. Reasons change, people change, market change, competition and
technology change. A valid reason for buying a particular product yesterday may become obsolete
tomorrow. Likewise, an apparently irrelevant feature yesterday may become a key reason for buying
tomorrow.
A company executive might buy one brand of a computer rather than another simply because of a
distant fear of being fired. This further complicated by the fact that some customers buy t he same
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product for different reasons. For example, Americans may buy a Sony Discman because it enables
them ‘to listen to their favourite music without images of different reasons (needs or motives) for
brushing their teeth. The following toothpaste test explains.
The Colgate ‘ring of confidence’ was one of he UK’s best-known toothpaste advertisements. It was
basically selling a tube of social confidence.
Module 13 Marketing Communications Strategy
Communications
2 A Theoretical Understanding of Marketing
This need to be accepted is relatively obvious although not always admitted initially. There are,
however, deeper feelings, emotions, memories, moods thoughts, beliefs and locked up inside the
dark depths of our unconscious. Sigmund Freud suggested that the mind was like an iceberg in so far
as the tip represents the conscious part of the mind while the greater submerged part is the
unconscious. Even long forgotten childhood experience can affect buying behaviour, including hard
nosed American industrial buyers.
In the UK many organisations use in depth research, e.g. Guinness carry out in depth research to tap
into drinkers’ deeply ingrained feelings about the product. Individuals are asked to express their
(often unconscious) feeling through clay modeling, picture completion and cartoon completion
techniques. This kind of research has revealed that people associate natural goodness and quasimystical qualities with the brand. The section on motivation looks at in depth feelings.
Types of Buying Situation
The amount of time and effort that a buyer is prepared to put into any particular purchase depends on
the level of expenditure, the frequency of purchase and the perceived risk involved. Relatively larger
expenditure usually warrants greater deliberation during search and evaluation phases. In consumer
markets this buying process is classified as ‘extensive problem solving’ (EPS) if the buyer has no
previous product experience and the purchase of, and familiarity with, a particular product or
service. This is called ‘limited problems solving’ (LPS). In the case of strong brand loyalty of a
habitually purchased product, ‘routinised response behaviour’ (RRB) can be identified by the repeat
brand purchasing of convenience products like baked beans. The buyer chooses quickly and has a
low involvement with the purchases. EPS requires high involvement form the buyer, which means
that the buyer spends time and effort before actually deciding to buy a particular product or brand.
This can be complicated by further advisers and influences who form part of the ‘decision making
unit’ or DMU (see below). LPS obviously requires lower levels of involvement than EPS but more
than RRB.
Industrial buying is even more clearly influenced by decision-making units, particularly when the
purchase is considered large, infrequent or risky. Like consumer buying, types of purchase situation
allow vary in industrial markets. a ‘new task’ buying situation means what it says the organisation
has no experience of the product or service and is buying it for the first time. a ‘modified rebuy’
situation is where the industrial buyers has some experience of the product or service, while a
‘straight rebuy’ is where the buyer, or purchasing department, buys on a regular basis.
Decision Making Units
As mentioned previously, there are often several individuals involved in any one person’s family to
purchase either consumer or industrial products and services. The choice of a family car may be
influenced by parents, children, aunts, unless, neighbours, friends, the Automobile Association and
so on. Each may play a different role in the buying process. Similarly, the purchase of a new factory
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machine may have been instigated by a safety inspector, selected by a team of engineers,
supervisors, shop steward, production manager, agreed by the board, bought or ordered by the
purchasing director and paid for by the financial director or company secretary.
Models or Buyer Behaviour
There can demonstrate this simple buying model by considering, say, the purchase of a new compact
disc player. Somewhere, somebody or something tells you that you need a CD.
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This is known as problem recognition which is followed by ‘information search’. This may involve
ads and editorial in magazines, visits to stores, discussion among friends, etc. next comes evaluation.
Leaflets, catalogues, ads and discussions are massed and a set of criteria is further refined. This may
include size, shape, colour, delivery, guarantee, etc. Performance is really difficult to assess, since
few of us can read sound is made to choose decipher a good sound in a shop full of other speakers.
Finally, a decision is made to choose a particular model. It isn’t over yet. The chosen brand may be
out of stock (in which case the communications mix has failed, since distribution has not got the
product on the shelf). Another brand is eventually purchased. This is when weaves of worry, doubt
or ‘post purchase dissonance’, arise. This may be addressed by reassuring the buyer (with a
congratulatory note, additional advertising, after sales service and, most of all, a product or service
that lives up to the promise made in the advertising). And if the product matches the promise then
repeat business and word of mouth referrals are more likely to occur over the longer run.
The simple buying model shown below in the figure serves as a useful checklist to see whether you
are filling in all the communication gaps in the buying process. Interestingly, many web sites now
use this as a checklist to ensure that site helps different customers to move through different stages
of their buying process. The model should not be hierarchical since in reality there are loops, e.g.
between information and evaluation as the buyer learns about new criteria not previously considered.
This model is more relevant for a high involvement purchase whether extensive problem solving
(consumer) or new task (industrial). A routinized response situation, like buying a beer, would not
involve this lengthy deliberation. Low involvement purchases can sometimes appear to be
thoughtless (impulsive) responses (purchases) to stimuli (point of sale displays or well designed
packs). If attention can be grabbed, them some brands can be bought, apparently, without much
considered thought processing. Basically, if you se the brand, you try it, and if you like it, you rebuy
it. Some advertising aims to remind customers and reinforce the benefits of the brand. Advertising
can also reassure existing customers that they have bought the right brand. This defensive
advertising (defending market share) reduces any post purchase dissonance (or worries) and also
keeps the brand on the buyer’s shopping list (or repertoire or brands). In contrast with high
involvement purchases, attitudes towards low involvement brands can be formed after the brand
experience and not before. In the more considered, high behaviour actually occurs. The attitude may
subsequently be reinforced by, first, the real experience of buying and using the brand and, second,
any subsequent advertising or word of mouth communications.
Professor Ehrenbergs 1974 ATR model (awareness Trial Reinforcement) suggested that consumes
become aware of a brand, try it (buy it) and then exposed to reinforcement by advertising (or even
the actual brand experience).
Awareness
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Trial
Reinforcement
Trial can occur many months after an advertisement has created awareness.
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Advertising here is also seen as defensive, in so far as it reassures existing buyers that they have
made the right choice, as opposed to advertising that might make them run out and buy the
advertised brand immediately. Ehrenberg acknowledges that some advertising actually does prompt
(or ‘nudge’) buyers to buy, as demonstrated with his more explicit 1997 ART + N (Awareness Trial
Reinforcement plus occasional Nudging) model. Ehrenberg’s specific views differ form many other
approaches highlighted in this chapter, yet his research findings are used by top blue chip companies
around the world.
Many other academics believe that different buying situations (high and low involvement) require
different thought processes and timescale4s. Even within the same product sector different processes
can occur. Take grocery shopping. Australian academics Rossiter and Percy have identified
differences in though process within the grocery sector. They suggest that most grocery brands (65
per cent) need recognition at the point of purchase, since buyers tend to see the brand first and then
realize they want it. Less than 10 seconds elapse between recognition and putting the product into
the trolley. The other 35 per cent of groceries are chosen in advance, so brand awareness (before
purchase) is important for these.
It does not stop there. There are more differences depending on whether the purchase is a relief
purchase (to solve a problem such as dirty clothes) or a reward purchase (to provide gratification,
like ice cream). The relief purchases require a more rational approach and the reward purchases a
more emotional approach. So each market and each brand needs to be carefully analysed. Professor
Robert Shaw (1997), points out ‘many different measures such as brand knowledge, esteem,
relevance or perceived quality may need to be monitored’. Any marketing manager other industrial
or consumer, product or service has constantly to watch the market, its segments and how it is
fragmenting.
Marketers need to understand their customers’ buying process, whether online, offline or a mixture
of both. Dulux paints found that its brand share is 11 per cent higher when customers choose their
paint colour at home rather than in store. But 75 per cent of colour decisions are made in the store. It
therefore tried to lock people into a Dulux purchase before they visit a shop by creating a value
added online experience whereby users can decorate a virtue room (with colour coordination
suggestions) and receive free swatches delivered free to their home with directions to their nearest
Dulux retailer.
Response Hierarchy Models
Although the ultimate objective for most marketing managers is to build repeat purchases from
profitable customers, there are many stages between creating problem recognition or need arousal
and purchase. The communication models shows what are bought to be sequence of mental stages
through which a buyer passes on his journey towards a purchase.
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These models are sometimes called ‘message models’ or ‘response hierarchy models’, since they
help to prioritize the communication objectives by determining whether a cognitive affective or
behavioural response is required, i.e whether the organisation wants to create awareness in the target
audience’s mind, or to change an attitude, or to act in some way (buy, vote, participate, etc).
These hierarchical communication models identify the stages through which buyers generally pass.
An understanding of these stages helps to plan appropriate marketing communications. DAGMAR
(defining advertising goals form measuring advertising results) was created to encourage measurable
objectives for each stage of the communications continuum.
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Some of the stages can sometimes occur simultaneously and/or instantaneously, as in the case of an
impulse purchase. Buyers can also avoid moving in a straight line or hierarchy of stages when
making a more considered purchase (extending problem solving). For example, during the
evaluation stages a potential buyer may go back to the information stage to obtain more information
before making a decision to buy. Each hierarchical model really requires a loop form the ‘last’ stage
up to the first stage to show that the sales (action) is not the end stage, but rather the beginning of an
ongoing dialogue that nurtures a relationship and a report buying process.
Ideally, these models should allow for these and other loops by ‘message decay’ (or forgetting),
changes in attitudes, competitive distractions, etc. the models also ignore the mind’s of Fishben et al
and the ‘complex models’ of Howard and Sheth, and Engel, Blackwell and Kollatt (1978). The
complex models, do, in fact, allow for both loops and the complexities of the intervening variables.
Three types of model, ‘black box’, ‘personal variable’ and ‘complex’, will now be conspired briefly.
Black box models consider external variables that acts as stimuli (such as price, shops, merchandise,
advertisements, promotions and the social environment including families and friends) and response
such as sales. Personal variable models focus on some of the internal psychological variables such as
attitudes and beliefs. The complex models attempt to include both the internal and external variables
in one grand model. To some this proves impossible. As Gordon Foxall (1992) pointed out, ‘no one
model can capture human nature in its entirety; nor can a handful of theoretical perspectives embrace
the scope of human interaction’.
Black Box Models
The behaviourists’ school of psychology concentrates on how respond to stimuli. It is not concerned
with the complex range in eternal and external factors that affect the behaviour. The complexities of
the mind are left locked up in a ‘black box’. The resulting stimulus response models ignore the
complexities of the mind (including the intervening variables such as perception, motivation,
attitudes etc) and focus on the input or stimulus, e.g. advertising, and the output, e.g. purchase
behaviour. A classical approach to stimulus response models is considered in learning’. The figure
below shows a black box model.
Figure 3: Black-Box Model
Stimulus variables
(Inputs)
Intervening variables
(Black box)
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Response variables
(outputs)
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As Williams (1989) says: ‘black box treat the individual and his physiological and psychological
make up as an impenetrable black box’. Only6 the inputs and outputs are measured. Any internal
mental processes (the intervening processes) that cannot be measured are ignored.
The black box approach considers only the inputs and outputs. Careful analysis under controlled
tests (using sophisticated computer models) can reveal the optimum price, the optimum level of
advertising and so on.
Personal Variable Models
These models take a glimpse the black box of the mind. The models only involve a few personal
variables such as beliefs, attitudes and intentions.
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These kinds of model are sometimes used within more complex models. Three types of personal
variable models ‘linear additive’, threshold’ and ‘trade off’ are briefly considered below.
Linear Additive Models
Linear additive models like that of Fishbein are based on the umber of attributes a particular product
or service has, multiplied by the score each attribute is perceived to have, multiplied by the
weighting which each attribute is deemed to have. This model opens up attitudes by indicating which
attributes are considered to be important to the customer and how each attribute the customer scores.
Attitudes are not always translated into purchasing behaviour. Even intentions are not always
translated into action. Nevertheless, marketing strategies can be built around changing beliefs about
attributes, and altering their evaluation or scores.
Threshold Models
Most purchases have cut off points or thresholds beyond which the buyer will not venture. It may be
price or some particular feature that a product or service must have (or must not have in the case of
some environmentally damaging ingredients) if it is to be considered at all. Here, the buyer has a
selection process that screens and accepts those products or services within the threshold for either
further analysis or immediate purchase. Those beyond the threshold are rejected and will not be
considered any further.
Trade off Models
Buyers generally have wide array of choices, many with different types and amounts of attributes. A
trade off occurs when the buyer accepts a product that is lacking in one attribute but strong in
another. A sort of compensatory mechanism emerges. When buying a car, engine size and price can
be traded off against each other, e.g. a bigger engine means a worse price (higher price). A number
of combinations of price and engine size can be researched to find the value or ‘utility’ for different
prices and engine sizes.
Complex Models
The cognitive school attempts to open the lid and look inside the mind’s black box. Here more
complex buying models. Like that of Howard and Sheth (1969), try to incorporate into the
hierarchical communication models the intervening variables of perception, motivating, learning,
memory, attitudes, beliefs, group influence, etc; in fact, almost everything inside the mind.
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Howard and Sheth
A simplified version of Howard and Sheth’s complex model divides the black box into perceptual
constructs and learning constructs. The exogenous variables are external to this model and include
personality traits, social class, financial status, the social/organizational setting and even the
importance of the purchase to the individual.
The complete complex model includes perception, learning, attitudes and motivation. Stimulus
ambiguity implies information to make a decision. Perceptual bias basically means that there is a
certain amount of distortion in the way that an individual perceives a stimulus.
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This complex model has been criticized for lacking a clear definition of the relationship of the
relationships between some of the variables and for a lack of distinction between the endogenous
variables (within the model) and exogenous variables (external to the model). The model is, for
many readers, difficult to understand and, for many practitioners, impossible to use. Nevertheless it
does provide a useful insight into the possible workings of the mind.
The remainder of this chapter looks at some of the influencing variables such as perception, learning,
motivation, values, attitudes and lifestyles, and considers how an understanding of them helps to
make more effective marketing communications.
The Intervening Variables
Perception
Perception means the way stimuli, such as commercial messages, advertisements, packaging, shops,
uniform, etc are interpreted. Messages and images are not always perceived in the manner intended
by the advertiser. As Chisnall (1985) says: ‘our perceptual system has a tendency or organize,
modify and distort information reaching it.’ Perception is selective. We see what we want to see.
The Smoker
Here’s simple test. Ask a smoker to recall exactly what the health warning says on the side of their
packet of cigarettes. Few will be able to tell you the exact worse. This is because we all selectively
screen out messages or stimuli that may cause discomfort, tension or ‘cognitive dissonance’. Image
that the smoker allows the message (warning) to be perceived. This will cause discomfort every time
a cigarette is taken, since the box give the smoker an unpleasant message. In order to reduce this
tension, the smoker has two options: (a) change behaviour (stop smoking) or (b) screen out the
message and continue the behaviour (smoking).
Many stimuli are screened out by the perceptual system, which, it is estimated, is hit by between 500
and 1,500 different advertisements a day. The next example shows how preferences and motivations
affect perception.
So perceptions are biased by our underlying motivations. Take this example from Hong Kong where
in 1997 china regained control over this former British colony. The committee responsible for
celebrating the resumption of Chinese sovereignty chose the white dolphin as its symbol. A British
newspaper, the independent, pointed out that his century. The committee also chose to place it
alongside the new symbol for the future special Administrative Region of Hong Kong, the Bauhina
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flower, which, reported the newspaper, was a sterile hybrid that produces no seed. The newspaper
perceived Hong Kong to be marching into the future under the symbols of an endangered species
and sterility. The Hong Kong committee saw the friendly dolphin as appealing to differ vastly even
over the same symbol or stimulus. Perceptions can vary even within the same region. A UK TV
advertisements for Unilever’s Persil washing powder showed a Dalmatian shaking off its black
spots, a white horse breaking away from black horses and a skater dressed being racist. Despite the
advertisements having been tested with Afro-Caribbean women before going on air, the ITC
(Independent Television Commission) received 32 complaints.
Before perception occurs, attention has to be gained by, say, the advertiser. As Williams (1989) says
interests, needs and motives determine ‘not only what will arouse attention, but also what will hold
it’. For example, advertisements for a new house are ignored by the mass population.
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But there is a sector of the population that is actively looking for house this sector has a need for a
new house and it is therefore receptive to any of these advertisements. Individual form this sector
positively select information relevant to their needs. This is known as ‘selective attention’.
There are also certain physical properties that increase the likelihood of message gaining attention:
intensity and size; position; sound; colour; contrast; and movement (eyes are involuntarily attracted
to movement because of the body’s instinctive defence mechanism). Given that an individual’s
attention is constantly called upon by new stimuli, repetition can enhance the likelihood of a
message getting through. Novelty can also be sued to ajar expectations and grab attention.
Perceived differences in brands are not necessarily dependent on real differences (in either function
or form). As Chinssall (1985) says: ‘Consumers evaluate products against the background to their
experiences, expectations and associations. Perception is seldom an objective, scientific assessment
of the comparative values of competing brands.
An understanding of the way our perceptual system organizes information has helped some brand
advertisers to exploit perceptual systems through an understanding of gestalt psychology. Gestalt
means ‘total figuration’. One of the four basic perceptual organizing techniques form the gestalt
school is ‘closure’. An individual strives to make sense of incomplete messages by filling in the gaps
or shaping the image so that it can fit comfortably into his cognitive set (or set of knowledge).
Marlboro’s, ‘MARL’ advertisements and Kit-Kat’s ‘Kit’ advertisements play on the need to fill in
these gaps. This may happen so fast that the viewer is not aware of what is going on inside to the
complete image is visible only inside our head. Effectively, the mind momentarily becomes the
medium, since the complete image. In a sense our head, while the external advertisement shows the
incomplete stimulus. The natural perceptual tendency towards ‘closure’ completes the
advertisement’s image inside the audience’s mind.
Perception is also inextricably linked with past experiences, motivation, beliefs, attitudes and the
ability to learn.
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Module 13 Marketing Communications Strategy
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3: Managing the Marketing
Evaluating marketing communications activities
Understanding communications effectiveness
Table 1: Communications are designed to meet three objectives
Awareness
Trial
Reinforcement
Increase brand awareness and establish brand recognition
Stimulate trial purchase
Stimulate and reinforce brand loyalty
To succeed in achieving these goals, communications must:
Gain attention
Communicate a message
Obtain the audience’s liking for the message and its execution
There are two elements to ht evaluation of the effectiveness of marketing communications
campaigns
Developing and testing the message themselves: guidance through pre-testing
Measuring the overall impact and effect of the message: quantitative evaluation after the campaign
(post testing)
The difficult part is measuring the effectiveness of the marketing communications process. The
following are some possible techniques.
Table 2:
Marketing communications methods
Personal selling
Public relations
Advanced Diploma in Marketing Management
Examples of measurements
Sales targets; productivity, costs
Editorial coverage; awareness; opinions
46
Direct marketing
Advertising
Sales promotion
Exhibitions
Online communications
Enquiries generated
Brand awareness
Stock turnover
Contact made
‘click-thoughts’
The following table shows possible advertising effectiveness and control methods.
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Table 3: Classification of advertising effectiveness measures
Type of measure
Laboratory measures
Advertising related
Pretesting panels
(Respondent aware of testing)
Consumer panels
Theatre tests
Portfolio tests
Hall tests
Readability tests
Laboratory tests
Physiological measure e.g. eye
tracking
Pretesting
Real world measures
(Respondent
testing)
unaware
Product related
Pretesting
of Dummy advertising
Inquiry tests
On air tests
Post testing
Recognition
Recall tests
Association measure
Consumer communication case studies
The cases used here are presented in a format, which would provide a framework for marketing
communication planning:
 Situation analysis
 Communications objectives
 Marketing communications strategy
 Communications tactics – promotional mix
 Action – implementation
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
Control – measurement and evaluation
Business-to-Business Strategies
Although the principles of marketing communications are the same for both consumer and industrial
markets, there are significant differences in the details of how promotion is carried out.
In particular, the targets in industrial markets are usually more specific and promotional budgets are
usually more limited. In order to understand these differences it is valuable to look again at the major
differences between industrial (or business) marketing and consumer marketing.
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Table 4: Major differences between industrial and consumer marketing
Area
Purchase motivation
Nature of demand
Emphasis of seller
Customer needs
Nature of buyer
Time effects
Product details
Promotion decisions
Price decisions
Place decisions
Customer service
Legal factors
Environmental factors
Industrial marketing
Multiple buying influences
support company operations
Derived or joint demand
Economic needs
Each customer has different
needs
Group decisions
Consumer marketing
Individual or family need
Primary demand
Immediate satisfaction
Group with similar needs
Purchase by individual or
family unit
Long term relationships
Short term relationships
Technically sophisticated
Lower technical content
Emphasis on personal selling
Emphasis on mass media
advertising
Price determined before terms Price
substantially
fixed
are important
discounts are important
Limited numbers of larger Large number of small buyers
buyers, short channels
complex channels
Critical to success
Less important
Contractual arrangements
Contracts only on major
purchases
Affect sales both directly and Affect demand directly
indirectly
Business Decision-Making Process
Perhaps the most significant differences are the nature of the buying motivation and the linked
nature of the buying decision process. In industrial buying there are many motivations. These stem
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partly form the technical use of the product but also from financial, security of supply, and, to a
lesser degree, emotional reasons.
Table 5: Decision makers and buying motivation
Decision makers
Operational manager
Technical manager
The managing director
The purchasing manager
Legal manager
Finance manager
Health and safety manager
Buying motivation
Uses the product in the organization’s processes – wants efficiency
and effectiveness
Often has to test and approve the product – wants reliability
May approve major expenditure or change of supplier
Approves conditions of purchase
Monitors supplier performance
Draws up or approves legal contracts with supplier
Approves expenditure and controls debt payment
May have a role to play with hazardous supplies
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Implications for marketing communications strategy
It will be obvious that marketing communications strategy for industrial marketing must reflect this
considerably more complex decision-making process.
Strategic Importance
Business or industrial marketing can be regarded as involving more strategic decision in its
implementation. Consumer products, by definition, are mass-market products often purchased in a
routine and habitual manner. This is unlikely to be the case in industrial marketing. Business
customers have differing needs and in some cases these needs may be conflicting within the
organization. Identifying business is complicated by having to deal with different decision makers
within the company.
Impact of Time
The length of time involved for the purchase evaluation and for the life of the product is much
greater industrial markets. Consumers often make buying decisions on the spur of the moment.
Industrial buying decisions may take over one year. This them alters both the type of marketing
communications and the relationships between the buying and selling organizations.
Buying Organization
Business buyers have several different methods of organizing purchasing and this can affect
communication strategy. Some firms purchase on a highly centralized basis. This allows for
maximum price advantage and negotiation strength because of economies of scale. Other
organizations allow decentralized purchases, which leads to local needs being better met. In these
cases, two different forms of selling organization are needed and the communication strategy needed
to reach the right person will be different in each case.
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Variety of Products and Services
The variety of products in business markets is extremely large. Business products vary form product
inputs to items for resale. They can be broken down into three main types.
Capital equipment (major purchases of fixed assets)
Product inputs (becoming part of the buyer’s process)
Business supplies/services (on-going use by the buyer)
Again, each type of purchase will need a different communications strategy.
The Business-to-Business Communications Mix
The chart below shows the relative importance of differing elements of the promotional mix between
consumer and industrial markets. These differences are reflected in developing marketing
communication strategies for industrial markets.
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Figure 4: Relative importance of the promotional element
High
Advertising
Personal selling
Direct-marketing
Public relations
Low
Consumer markets
Business-to-business markets
Relative Importance of Promotional Elements
The clearest difference is the importance of personal selling in industrial markets because of the
complexity of the decision-making process, the differing process, the differing industrial needs and
the higher value of individual purchases. Advertising though still important in industrial marketing,
is less so than for consumer marketing.
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The diagram also shows that both public relations and direct marketing have important continuing
roles in both consumer and industrial marketing. It is clear from the above list that the methods to
communicate with industrial markets will be of a much greater variety than for consumer markets.
This in turn means that industrial marketing decisions can be really challenging and the need for
effective co-coordinated marketing communications is important.
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Table 6: The range of promotional methods is described below.
Method
Personal selling
Internal selling
Internet
Advertising
Telemarketing
Direct mailing
Comment
This is a major component of industrial marketing because of the need to
deal with technical and other issues on a face-to-face basis.
Increasingly it is recognized that a salesperson has an internal role to play
in representing his customer’s needs to the company
The use of the internet for e-commerce is perhaps more highly developed
in industrial marketing than in the consumer sector. Advertising and
online catalogues are just two of the ways that it can be used. Many
companies have also set up electronic links with suppliers and customers
for such functions as automatic ordering.
A wide variety of publications exist which can be used to target
individual market sectors including:
Trade journals
Business press
Directories
Advertising is used to create awareness, provide information, generate
leads, assist channel members and sometimes to sell off the page
Telemarketing has been proved to be a very cost effective method of
order processing, customer service, sales support and account
management
Industrial marketers have used direct mail; another form of direct
marketing, for a long time but its use has substantially increased. It can
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Public relations
Sales promotion
be used to provide information and generate enquiries. It can be tailored
to individual customer needs.
Sometimes in industrial markets this is referred to as publicity. It often
focuses on getting editorial coverage in appropriate magazines but it has
a wider role of building customer relations.
Sales promotion is an important area of communication in industrial
markets. There are a wide range of methods that are of well established
use in industrial campaigns.
Literature
Videos
Events
Trade shows
Exhibitions
Discounting
Business gifts
Technical literature is clearly important in specifying the product.
Complicated equipment can be captured on video and applications
shown. Trade shows and exhibitions continue to grow in importance.
Discounting and special price promotions are used extensively in
industrial markets. Business gifts continue to have their value if not used
excessively
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Evaluating the effectiveness of personal selling
This hinges around measuring the inputs made (the effort and costs by the sales force) against the
outputs achieved. The key measure, productivity, is the ratio of inputs to outputs. Increasing
emphasis is also being placed upon the profitability of each salesperson.
Activities
Sales calls
Presentation made
Expenses
Cost of samples
Time taken
these can be measured against
organizational standards
Knowledge and skills inputs
Depth of product knowledge
Presentation skills
Customer relationships
Market knowledge
less easily evaluated, but very
important (and likely to become more so)
Ratios are often used to measure the performance and productivity of a salesperson or the sales force
as a whole. They can also be used to benchmark against industry standards.
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Table 7
Type of ratio
Expense ratios
Servicing ratios
Activity ratios
Examples
Expenses
Sales;
Sales value
Number of orders;
Number of orders
Number of calls;
Costs
Number of calls
New accounts
Total accounts
Number of calls
Number of weeks
Marketing communications for service organizations
The promotions of goods and services have many similarities. We do not need to discriminate
between the two when considering:
 The role of promotion in meeting marketing objectives
 The need to design effective promotions
 The managerial challenge of efficient implementation
 The broad choice of methods and media
 The agencies available to support promotion
Promotional objectives for services are related to those for products, as the following examples
show.
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Marketing
 Build awareness and interest in the service and the service organization
 Communicate and portray the benefits of the service available
 Build and maintain the overall image and reputation of the service organization
 Advise customers of new channels
 Advise customers of special offers or modifications to the service
 Persuade customers to use or buy the service
In spite of these similarities there are significant differences caused by the special nature of services.
Gronroos, a Swedish writer on service marketing, draws attention to some of the complexity in the
diagram below demonstrating service relationships.
In service markets there are four elements of the service that need to be taken into account in
planning.
The core service concept and any auxiliary service.
The accessibility of the service
The interactive communications that take place in delivering the service
The influence of the consumer and other consumers receiving the service
Four promotional methods are then used to influence the customer
Traditional selling
Advertising and direct marketing
Public relations and sales promotions
The communication aspects of pricing policy
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Traditional selling
corporate image
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PR sales
Promotion
Figure 5: Model of services communication
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There are differences in promotion necessitated by the characteristics of service industries and
services companies.
Table 8
Characteristics
Lack of market orientation
Consequences
Managers are untained, unskilled and unaware of the role of
promotion
Professional and ethical Places limitations of certain promotion methods. Sometimes legal
constraints
restrictions
Small scale of many service Limits size of promotion budgets
organizations
Nature of capacity available Capacity for delivering the service may be limited. Promotion may
produce too much demand
Attitude
to
promotion Limited knowledge of and attitude to wide range of promotion
methods
method
Table 9: The marketing of services
Characteristics
Consequences
Nature of the service
Services may be specific, which excludes mass advertising
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Consumer attitudes
Buying process
Consumers may rely on subjective judgement made at the point of
service delivery
The need to develop a professional relationship with the service provider
makes customer care important
These differences lead to a number of guidelines that must be considered when designing
communication campaigns for service markets.
Use clear unambiguous messages to communicate the range, depth, quality and level of services
Emphasize the benefits of the service rather than their technical details
Only promise what can be delivered, to avoid disappointment
Advertise to employees, as they are particularly important in many people-intensive services
Obtain maximum customer co-operation in the service production process as the service is often an
interactive system
Build on word of mouth communication form one satisfied customer to another
Provide tangible evidence to strengthen promotional messages. Use well knows personalities to
support the messages.
Develop continuity in promotion by the use consistent and continuous symbols, themes, formats or
images
Remove post purchase anxiety by reassuring the buyer of the soundness of choice, especially where
there is no tangible product
Personal selling becomes more important in the promotion of services as the following table shows
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Table 10: Differences between selling goods and services
Issue
Comment
Customer’s purchase Customers view service as having less consistent quality
perception
of Service purchasers have higher risks
services
Service purchasing is less pleasant
When services are bought greater consideration is given to the particular
salesperson
Perception of the service company is an important factor when deciding to
buy a service
Customer’s purchase Customers may do fewer price comparisons with services
behavior
with Customers give greater consideration to the particular seller of services
services
Customers are less likely to be influenced by advertising and more by
personal recommendations
Personal selling of Customer involvement is greater
services
Customer satisfaction is influenced by the salesperson’s personality and
attitude
Salespeople may have to spend more time reducing customer uncertainty
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Marketing Communications for Non Profit Organizations
The major principles of marketing communications for non-profit organizations are the same as for
consumer and industrial marketing. There are, however, considerable differences of emphasis. The
sum of money available for organized communication may be less. Public scrutiny of policies may
be higher.
Almost certainly there will be a different set of communication objectives.
 Making target customers aware of a product, service or social behaviour
 Educating consumers about the offer or changes in the offer
 Changing beliefs about negative and positive consequences of taking a particular action
 Changing the relative importance of particular consequences
 Enlisting the support of a variety of individuals
 Recruiting motivating or rewarding employees or volunteers
 Changing perceptions about the sponsoring organization
 Influencing government bodies
 Preventing the discontinuity of support
 Providing benefits over ‘competitor’s
 Combating injurious rumours
 Influencing funding agencies
Once the non-profit marketer has developed the broad objectives for the communications plan the
next step is to decide specific messages. These messages may be developed within one of the three
frameworks.
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Rational, emotional and moral framework
Rational messages pass on information and serve the audience’s self interest. For example messages
about value, economy or benefits
Emotional messages are designed to develop emotion to shape the desired behavior. For example
with fear, guilt, shame appeals to stop doing things like smoking, drinking, taking drugs or
overeating.
Moral messages directed at the audience’s sense of right or wrong. For example, to support a cleaner
environment or equal rights or help the under-privileged.
Reward and situation framework
There may be four types of reward: rational, sensory, social or ego satisfaction rewards
Rewards may result directly from use, or indirectly form the products in use, or be incidental to use.
For example, think about the various rewards offered by cars with catalytic converters.
Attitude change framework
Changes in the importance of one or more outcomes
Changes in the beliefs about one or more outcomes
Adding new positive outcomes
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Having decided what messages to transmit it is then necessary to decide the style of promotional
execution. The following styles are appropriate for consumer goods advertising but can easily be
adopted for non-profit organizations.
Table 11: Health Education
Styles
Slice of life
Life-style
Fantasy
Mood
Musical
Personalities
Technical expertise
Scientific evidence
Testimonial evidence
Execution
Family doing healthy activities throughout the day
Father and daughter of jogging early in morning
Dream of winning a marathon
Exercises in a field of wild flowers
Exercises to modern music
Using a well known successful sports personality
Quoting performance capability in exercises
Showing the benefits of less illness and greater longevity
Members of the public give views on benefits
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Table 12: How marketers of non-profit organizations can reach target audiences
Method
Paid advertising
Comment
Non-profit organizations may have limited funds but his can still be an
effective route even on low budgets, as the save the children fund
campaign showed. Alternatively obtaining commercial sponsorship
may boost the budget.
Unpaid (public service) Media owners may provide airtime or press space on a free of charge
advertising
basis as a public. However, there is little control over this and the time
or spaces may occur at unpopular times or places
Sales promotions
Short-term incentives to encourage purchases or donations. Market
control is strong and promotions are often newsworthy (for example,
Red Nose day or Poppy day promotions)
Public relations
Many of the stories of non-profit organizations are of considerable
interest. They may feature in the press or the broadcast media. Control
over the message is good and feedback is possible
Personal
selling
and Staff at all levels of the non-profit organizations should be trained in
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personal communications. They will often have the opportunity to ‘sell’
to their supporters and possible benefactors.
communication
Categories of non-profit communications include the following:
 Political partly communications
 Social cause communications
 Charitable communications
 Government communications
 Religious communication
 Professional body communications
 Other private non-profit communications (hospitals, universities, museums and so on)
Direct marketing
This is a medium increasingly being used by non-profits organizations, particularly arts foundations
and charities. It has seven important advantages for non-profit marketers.
It can be very focused for maximum effect on the target market.
It can be private and confidential. This is especially important when dealing with sensitive issues
There is the less direct regulation on direct mail promotions. In the past charitable advertising in the
broadcast media has been limited.
Cost per conduct and cost per response is low and controllable, which is important where funds have
to be used wisely
Results are clearly measurable and can make the programme more accountable
Small-scale tests of proposed strategies are feasible
The effectiveness of direct marketing can be assessed in terms of behavior (i.e. orders, donations,
requests for membership).
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Behaviour Channels
Non-profit campaigns often call for behavioural changes on the part of the target audience. It is for
this reason that it is valuable to monitor the effectiveness of such a campaign using a modification of
the hierarchy of effects model. The model shown below has been adapted for a campaign to
encourage the use of contraceptives to aid family planning.
Figure 6: Contraceptive campaign social behaviour change model
MANAGEMENT TASK
A. EDUCATION
1
CONSUMER BEHAVIOUR
Understands reproduction
B. VALUE CHANGE
2
Understands contraception
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Not opposed to contraception
Interested in using contraception
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3
C. ATTITUDE CHANGE
4
5
6
D. MOTIVATE TO ACT
7
Acquires method
8
9
E. TRAIN AND REINFORCE
10
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Campaign title: NSPCC
Tries method
Continues usage
3 Managing the
Adopts correct usage
Context
Business
The NSPCC set up a five-vision programme to tackle the problem of child abuse, head on. This
programme sought to:
Set up an investigative service to run in parallel with the police
Promote quality parenting
Work with schools and teacher training colleges
Develop children-friendly communities
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Work for cultural and legislative change
External
An independent national commission of enquiry had reported that child abuse and neglect can almost
always be prevented, provided the will to do so is there.
Organizational
The financial resources necessary to implement the five visions were limited
There was a strong culture and drive to be successful
Customer
Giving fatigue, NSPCC fatigue
Suspicion concerning raising the standard of parenting
Attitudes – skepticism at he charity’s ambition to abolish child abuse/cruelty
Abuse is universally condemned but people feel helpless … they know what to do and they don’t
think it goes on near them
Stakeholder
Organizations willing to be associated with cause related issues, which equate to sponsorship and
assistance with fund raising.
Promotional objectives
The aim was to hit every household in the UK
Corporate
to end child abuse
Marketing
to raise £250 million in 12 months – donated or pledged (normal
Amount £50m)
Communication: to raise awareness of child cruelty to persuade people to become involved with the
cause
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Promotional strategy
Strong pull campaign designed to raise awareness of child cruelty. Campaign to be delivered in two
main steps. The first to develop awareness and the second step to be action oriented.
In parallel there should be a strategy designed to communicate with businesses in order to generate
funds, goodwill and support.
The overall profile of the organization (NSPCC) shall be raised and communications need to ensure
that the integrity of the organization and those associated with it are maintained. In addition all
communications need to be consistent.
Promotional mix used to create a dialogue with the public
Public relations
TV, posters
Field Marketing
Direct Marketing: Direct Mail, Telemarketing
Website
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First phase
Public relations were used at the initial stages of the campaign t help create awareness. Public
address systems at railway stations and airports were used as a reminder mechanism.
A national TV campaign, supported by posters, broke soon after the public relations in order to raise
awareness and provoke the question within each individual, ‘what can I do?’ the message strategy
was very emotional and used strong imagery to crate shock and attention.
The heavy TV campaign looked to generate 600 TVRs, 85% coverage at 7.1 OTSs. The supporting
poster campaign used 48 sheets on 3,500 sites designed to deliver 55% coverage with 21 OTSs.
Initial enquires to this wave of communications were heralded by an automated telemarketing
bureau.
Second phase
This initial approach was followed up by a 23 million nationwide doordrop campaign. The aim was
to provide the public with an answer to the question that the advertising had provoked, namely, to
sign the pledge and/or volunteer as a donor or fundraiser.
The envelope picked up the TV creative treatment, repeating as a subdued background motif the
image of nursery wallpaper with a teddy bear covering its eyes with its paws. Don’t close your eyes t
cruelty to children’.
It was thought that the doordrop letter addressed as ‘Dear Householder’ might offend established
donors. To avoid this, 160,000 best donors were sent an early warning letter in advance of the
campaign breaking in order to get their support. Another million received personal letters just ahead
of the doordrop.
It was anticipated that the bulk of enquiries would come from the doordrop action and these were to
be handled through personal telemarketing responses (inbound). The website was also adapted in
order that it would be able to accept pledges.
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In addition to this the campaign utilized a call-to-action weekend with volunteers staffing 2,000 sites
around the country, including most city centers, to remind and raise cash donations.
Promotional mix used to communicate with businesses
Sponsorship
Direct mail/information pack
Internet
Sponsorship deals were made available enabling businesses to align themselves more closely with
the campaign. Microsoft have been closely involved with NSPCC for a number of years and hey
acted as prime movers encouraging other businesses to pledge their support. Microsoft sponsored the
advertising for the campaign.
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Other sponsorship and cause related marketing packages were detailed in a Toolkit distributed to
other major organizations.
Direct mail was also used to encourage business to make donations and electronic communications
were used to promote pledges online.
(Sources: adopted form Goften K (1999) “NSPCC aims to convert abuse anger into cash”,
marketing).
This campaign sought to deal with on issue that most people choose to ignore. The ambitious targets
needed an extraordinary marketing communications campaign if it was to e successful. The
coordinated promotional plan enabled a simple yet hard-hitting message to be conveyed to a
substantial part of the nation.
It should be remembered that without knowing the budgets made available to fund the campaign and
the extent of the contribution made by the business-to-business sector, it is doubtful whether a return
on the investment will be made known outside of the charity. However, this should not detract from
what is a major contribution to the social and moral welfare of the nation, made possible through
astute use of an coordinated marketing communications campaign.
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Integrated Marketing Communications
During the past several decades, companies around the world have perfected the art of mass
marketing – selling highly standardized products to masses of customers. In the process, they have
developed effective mass-media advertising techniques to support their mass-marketing strategies.
These companies routinely invest huge sums of money in the mass media, reaching tens of millions
of customers with a single ad. However, in the twenty-first century, marketing managers face some
new marketing communications realities.
The Changing Communications Environment
Two major factors changing the face of today’s marketing communications. First, as mass markets
have fragmented, marketers are shifting away from mass marketing. More and more, they are
developing focused marketing programmes designed to build closer relationships with customers in
more narrowly defined micro markets. Second, vast improvements in information technology are
speeding the movement towards segmented marketing. Today’s information technology helps
marketers to keep closer track of customer needs – more information is available about customers at
the individual and household levels than ever before. New technologies also provide new
communications avenues for reaching smaller customer segments with more tailored messages.
The shift from mass marketing to segmented marketing has had a dramatic impact on marketing
communications. Just as mass marketing gave rise to a new generation of mass media
communications, so the shift towards one-to-one marketing is spawning a new generation of more
specialized and highly targeted communications efforts.
Given this new communications environment, marketers must rethink the roles of various media and
promotion-mix tools. Mass-media advertising has long dominated the promotion mixes of consumerproduct companies. For example, in 2003, media advertising represented 40.5 per cent of global
marketing spend, followed by sales promotion (20.5 per cent), PR and sponsorship (15.4 per cent)
direct mail (14.0 per cent) and interactive marketing (7.7 per cent). However, although television,
magazines and other mass media remain very important, their dominance is declining. Companies
are not giving up on mass-media advertising, but are seeking ways to get better value for money.
For example, Unilever’s Comfort Refresh, a clothing and fabric deodorants spray, is advertised in
the women’s lavatories of clubs and pubs, because its target audience of young females, who use it
to remove the smell of cigarette smoke form their clothing are more likely to be out partying then
sitting at home watching television for hours at a time. Refresh also sponsors a TV series that
appeals to young females. In keeping with the assumption that the 30-second TV commercial, when
the company launched comfort easy iron spray, product demonstrations were staged in shopping
malls across the country. Unilever is also increasing its use of outdoor poster advertising in brandbuilding campaigns for product launches.
Market fragmentation has resulted in media fragmentation – in an explosion of more focused
media that better match today’s strategies. Beyond the traditional mass-media channels, advertisers
are making increased use of new, highly targeted media, ranging from highly focused specialty
magazines and cable or satellite television channels to CD catalogues and website on the internet, to
airport kiosks and floor decals in supermarket aisles.
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Many companies are diverging marketing spending to interactive marketing, which can be focused
more effectively on individual consumer and trade segments. In all, companies are doing less
broadcasting and more narrow casing.
The need for Integrated Marketing Communications
All too often, companies fail to integrate their various communications channels. The result is a
hodgepodge of communications to consumers. Mass-media advertisement say one thing a price
promotion sends a different signal, a product label creates still another message, company sales
literature says something altogether different, and the company’s website seems out of sync with
everything else.
The problem is that these communications often come form different company sources. Advertising
message are planned and implemented by the advertising department or advertising agency. Sales
management develops personal selling communications. Other functional specialists are responsible
for public relations, sales promotion, direct marketing online sites and other forms of marketing
communication.
Recently, such functional separation has been a major problem for many companies and their
Internet communications activities. Many companies first organized their new web communications
operations into separate groups or divisions, isolating them from mainstream marketing activities.
However, although some companies have compartmentalized the new communication tools,
customers may do a bit of web surfing to find out about companies’ products or services, but this
does not mean that they no longer pay attention to TV or magazine ads or take any notice of firms’
sales promotion campaigns.
To be sure, the Internet promises exciting marketing communications potential. However, marketers
trying to use the Web alone to build brands face many challenges. One limitations is that the Internet
does not build mass brand awareness. The web simply cannot match the impact of World Cups,
Olympic games or Six Nations Rugby, where tens of millions of people see the same 30-second
Nokia and Nike ad at the same time. Instead, it is like having millions of private conversations.
Using the Web, it is hard to establish universal meanings – such as ‘Nokia Connecting People’ or
‘Just do it’ that are at the heart of brand recognition and brand value.
Thus, if treated as a special case, the Internet – or any other marketing communication tool – can be
a disintegrating force in marketing communications. Instead, all the communication tools must be
carefully integrated into the broader marketing communication mix.
In the past, no one person was responsible for thinking through the communication roles of the
various promotion tools and coordinating the promotion mix. Members of various departments often
differ in their views on how to split the promotion budget. The sales manager would rather hire a
few more salespeople than spend a few hundred thousand euros more on a single television
commercial. The public relations manager feels that he or she can do wonders with some money
shifted from advertising to public relations. Today, however, more companies are adopting the
concept of integrated marketing communications. Under this concept, as illustrated in the figure
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below, the company carefully integrates and coordinates its many communications channels to
deliver a clear, consistent and compelling message about the organization and its products.
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It builds a strong brand identity in the marketplace by trying together and reinforcing all the
company’s messages, positioning and images, and identity, coordinating these across all marketing
communications venues. It means that your direct mail campaign, and your advertising has the same
‘look and feel’, as your website.
IMC calls for recognizing all contract pints where the customer may encounter the company, its
products and its brands. Each brand contact will deliver a message, whether good, bad or indifferent.
The company works out the roles that the various promotional tools will play and the extent to which
each will be used to deliver a consistent and positive message at all contact points. It carefully
coordinates the promotional activities and the timing of when major campaigns take place. It keeps
track of its promotional expenditures by product, promotional tool, product life-cycle stage and
observed effect in order to improve future use of the promotion-mix tools. Finally, to implement
integrated marketing communications, some companies appoint a marketing communication director
– or marcom manager – who has overall responsibility for the company’s communications efforts.
Essentially, in order for the firm’s external communication to be integrated effectively, it must first
integrate its internal communications activities.
Integrated marketing communication produce better communications consistency and greater sales
impact. They place the responsibility in someone’s hands – where none existed before – to unify the
company’s image as it is shaped by thousands of company activities. They lead to a total marketing
communication strategy aimed at showing how the company and its products can help customers
solve their problems.
A View of the Communication Process
Integrated marketing communications involve identifying the target and shaping a well-coordinated
promotional programme to elicit the desired audience response. Too often, marketing
communications focus on overcoming immediate awareness, image or preference problems in the
target market. This approach to communication is too shortsighted. Today, marketers are moving
towards viewing communications as managing the customer relationship over time, that is, during
the pre-selling consumption and post-consumption stages.
Because customers differ, communications programmes need to be developed for specific segments,
niches and even individuals. Importantly, given the new interactive communications technologies,
companies must ask not only ‘How can we reach our customers?’ but also ‘How can we find ways to
let our customers reach us?’
Thus, the communication process should start with an audit of all the potential interactions that
target customers may have with talk to others, see television commercials, read articles and
advertisements in newspapers and magazines, visit various websites and try out computers in one or
more stores. The marketer needs to assess the influence that each of these communications
experiences will have at different stages of the buying process. This understanding helps marketers
to allocate their communication budget more effectively and efficiently.
To Communicate Effectively, Marketers need to understand how Communication Works.
Communication involves the nine elements shown in the figure below. Two of these elements are the
major parties in a communication – the sender and the receiver.
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Another two are the major communication tools – the message and the media. Four more are
primary communication functions – encoding, decoding, response and feedback. The last element is
noise in the system. We will explain each of these elements using an ad for Ericsson mobile phones.
Figure 7: Integrated marketing communication strategy
sender
Encoding
Message
Decoding
Receiver
Media
Noise
Feedback
Sender’s field of experience
Response
Receiver’s field of experience
Sender. The party sending the message to anther party – in this case, Ericsson.
Encoding. The process of putting the intended message or thought into symbolic form – Ericsson’s
advertising agency assembles words and illustrations into an advertisement that will convey the
intended message.
Message. The set of words pictures or symbols that the sender transmits – the actual Ericsson mobile
phone ad.
Media. The communication channels through which the message moves from sender to receiver – in
this case, the specific magazine that Ericsson selects.
Decoding. The process by which the receiver assigns meaning to the symbols encoded by the sender
– a consumer reads the Ericsson mobile phone ad and interprets the words and illustrations it
contains.
Receiver. The party receiving the message by another party – the consumer or business customer
who reads the Ericsson mobile phone ad.
Response.
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The reactions of the receiver after being exposed to the message – any of hundreds of possible
responses, such as the customer is more aware of the attributes of the Ericsson mobile phone,
actually buys the mobile phone advertised, or does nothing
Feedback. The part of the receiver’s response communicated back to the sender – Ericsson’s
research shows that consumers like ad remember the ad, or consumers write or call the company
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 from the one the sender sent – for example, the customer is
distracted while reading the magazine and misses the Ericsson mobile phone ad or its key points.
For a message to be effective, the sender’s encoding process must mesh with the receiver’s decoding
process. Thus, the best messages consist of words and other symbols that are familiar to the receiver.
The more the sender’s field of experience overlaps with that of the receiver, the more effective the
message is likely to be. Marketing communicators may not always share their consumer’s field of
experience. For example, an advertising copywriter from one social stratum might crate an ad for
consumers for another stratum – say, blue-collar workers or wealthy business executives. However,
to communicate effectively, the marketing communicator must understand the consumer’s field of
experience.
This model points out the key factors in good communication. Senders need to know what audiences
they want to reach and what responses they want. They must be good at encoding messages that take
into how the target audience decodes them. They must send channels so that they can assess the
audience’s response to the message.
Steps in Developing Effective Communication
We now examine the steps in developing an effective integrated communication and promotion
programme. The marketing communicator must identify the target audience, determine the
communication objective, design a message, choose the media through which to send the message,
and collect feedback to measure the promotion’s results. Let us address each of these steps in turn.
Identifying the Target Audience
A marketing communicator starts with a clear target audience in mind. The audience may be
potential buyers or current users, those who make the buying decision or those who influence it. The
audience may be individuals, groups, special publics or the general public. The target audience will
heavily affect the communicator’s decision on what will be said, how it will be said, when it will be
said, where it will be said and who will say it.
Determining Communication Objectives
Once the target audience has been defined, the marketing communicator must decide what responses
is sought. Of course, in many cases, the final response is purchase. But purchase is the result of a
long process of consumer decision-making. The marketing communicator needs to know where the
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target audience now stands and to what state it needs to be moved. To do this, he or she must
determine whether or not the customer is ready to buy.
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The target audience may be in any of six buyer-readiness stages – the stages that consumers
normally pass though on their way to making a purchase. These stages are awareness, knowledge,
liking, preference, conviction and purchase. They can be described as a hierarchy of consumer
response stages. The purpose of marketing communication is to move the customer along the stages
and ultimately to achieve final purchase.
Awareness
The marketing communicator’s target market may be totally unaware of the product, know only its
name or know one or a few things about it. If most of the target audience is unaware, the
communicator tries to build awareness, perhaps starting with just name recognition. This process can
begin with simple messages that repeat the company or product name. For example, when Orange
introduced its mobile phone network, it began with an extensive ‘teaser’ advertising campaign to
crate name familiarity. Initial ads for Orange crated curiosity and awareness by emphasizing the
brand name, but not the service.
Figure 8: Buyer readiness stages
Awareness
Knowledge
Liking
Preference
Conviction
Purchase
Knowledge
The target audience might be aware of the existence of the company or of the product, but not know
much more. The company needs to learn how many people in its target audience have little, some or
much knowledge about its offering. At launch, Orange ads created knowledge by informing potential
buyers of the company’s service and innovative features.
Liking
Assuming target audience members know the product, how do they feel about it? Once potential
buyers knew about orange, the company’s marketers would want to move them along to the next
stage – to develop favourable feelings about the brand. If the audience looks unfavourably on the
brand, the communicator has to find out why, and then resolve the problems identified before
developing a communications campaign to generate favourable feelings.
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Preference
The target audience might like the product, but not prefer it to others.
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In this case, the communicator must try to build consumer preference by promoting the product’s
quality, value and their beneficial features. The communicator can check on the campaign’s success
by measuring the audience’s preferences again after the campaign. If orange finds that many
potential customers like its service offering but prefer other mobile phone operators’ brands, it will
have to identify those areas where its offerings are not as good as competing deals and where they
are better. It must them promote its advantages to build preference among prospective clients, while
redressing its weaknesses.
Conviction
A target audience might prefer the product, but not develop a conviction about buying it. Thus some
customers may prefer orange to other mobile phone network brands, but may not be absolutely sure
that it is what they should subscribe to. The communicator’s job is to build conviction that the
offering is the best one for the potential buyer. A combination of the promotion mix tools should be
used to create preference and conviction. Advertising can be used to extol the advantages offered by
the brand. Press releases and public relations activities would be used to stress the brand’s specific
features, such as its innovativeness or performance.
Direct marketing tools could be used or dealer salespeople could also be encouraged to educate
potential buyers about the product or service options, value for the price and after-sale service.
Purchase
Finally, some members of the target audience might be convinced about the product, but not quite
get around to making the purchase. Potential buyers might decide to wait for more information or for
the economy to improve. The communicator must lead these consumers to take the final step.
Actions might include offering special promotional prices, rebates or premiums. Salespeople might
call or write to selected customers, inviting them to visit the sales outlet for a special demonstration
or product trial.
In discussing buyer readiness stages, we have assumed that buyers pass through cognitive and
behavioral stages, in that order. This ‘learn-feel-do’ sequence is appropriate when buyers have high
involvement with a product category and perceive brands in the category to be highly differentiated,
such as the purchase of a car. But consumers often follow other sequences. For example, they might
follow a ‘do-feel-learn’ sequence for high-involvement products with little perceived differentiation,
such as a central heating system. Still a third sequence is the ‘learn-do-feel’ sequence, where
consumers have low involvement and perceive little differentiation, as is the case when they buy a
product such as salt.
Furthermore, marketing communication alone cannot crate positive feelings and purchases for the
product. So, for example, orange must provide superior value to potential buyers. In fact,
outstanding marketing communications can actually speed the demise of a poor product. The more
quickly potential buyers learn about the poor product, the faster they become aware of its faults.
Thus, good marketing communications call for ‘good deeds followed by good words’. Nonetheless,
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by understanding consumers’ buying stages and their appropriate sequence, the marketer can do a
better job of planning communications.
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Designing a Message
Having defined the desired audience response, the communicator turns to developing an effective
message. Ideally, the message should get Attention, hold interest, arouse Desire and obtain action. In
practice few messages take the consumer all the way form awareness to purchase, but the AIDA
framework suggests the desirable qualities of a good message.
In putting the message together, the marketing communicator must decide what to say and how to
say it.
Message Content
The communicator has to figure out and appeal or theme that will produce the desired response.
There are three types of appeal: rational, emotional and moral. Rational appeals relate to the
audience’s self-interest. They show that the product will produce the desired benefits. Examples are
messages showing a product’s quality, economy, value or performance. Thus, in its ads, Mercedes
offers automobiles that are ‘engineered like no other car in the world’, stressing engineering design,
performance and safety.
Emotional appeals attempt to stir up their positive or negative emotions that can motivate purchase.
Communicators may use positive emotional appeals such as love, humor, pride, promise of success
and joy.
Communicators can also use negative emotional appeals, such as fear, guilt and shame appeals in
order to get people to do things they should or to stop doing things they shouldn’t. for example, a
recent Crest ad invoked mild fear when it claimed ‘there are some things you just cant afford to
gamble with’. So did Michelin tyre ads that featured cute babies and suggested ‘Because so much is
riding on your tyres’.
Moral appeals are directed to the audience’s sense of what is ‘right’ and ‘proper’. They are often
used to urge people to support social causes such as a cleaner environment, better race relations,
equal rights for women and aid to the disadvantaged.
Message Structure
The communicator must decide how to say it. This requires the communicator to handle three
message-structure issues. The first is whether to draw a conclusion or to leave it to the audience.
Early research showed that drawing a conclusion was usually more effective where the target
audience is less likely to be motivated or may be incapable of arriving at the appropriate conclusion.
More recent research, however, suggests that in many cases where the targets are likely to be
interested in the product, the advertiser is better off asking questions to stimulate involvement and
motivate customers to think about the brand, and then letting them come to their own conclusions.
The second message structure issue is whether to present a one-sided argument, or a two-sided
argument. Usually, a one-sided argument is more effective in sales presentations – except when
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audiences are highly educated or likely to hear opposing claims or when the communicator has a
negative association to overcome. The third 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.
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Message Format
The communicator also needs a strong format for the message. In a print ad, the communicator has
to decide on the headline, copy, illustration and colour. To attract attention, advertisers can use
novelty and contrast, eye-catching pictures and headlines, distinctive formats, message size and
position, and colour, shape and movement. If the message is to be carried over the radio, the
communicator has to choose words, sounds and voices. The ‘sound’ of an announcer promoting
banking services should be different from one promoting quality furniture.
If the message is to be transmitted on television or conveyed in person, then all these elements plus
body language have to be planned. Presenters plan their facial expressions, gestures, dress, posture
and even hairstyle. If the message is carried on the product or its package, the communicator has to
watch texture, scent, colour, size and shape. For example, colour plays an important communication
role in food preferences.
Thus, if coffee company wants to communicate that its coffee is rich, it should probably use a red
container along with label copy boasting the coffee’s rich taste.
Even when an individual is exposed to a message, he or she may pay no attention to the message
because it is either boring or irrelevant. The communicator increases the chances of the message
attracting the attention of the target audience by taking into consideration the following factors:
The message must have a practical value to the target audience because individuals are in the market
for the product.
The message must interest the target group
The message must communicate new information about the product or brand. Consumers pay more
attention to new messages.
The message must reinforce or help to justify the buyer’s recent purchase decisions – if you have
recently bought a personal computer, it is likely that you will notice or your attention will be quickly
drawn to ads for the PC
The message must be presented in such a way as to make an impact. As explained above, this
objective can be achieved by paying attention to message formats and stressing creativity in the way
the copy, artwork/illustrations and physical layout or presentation delivered
While advertisers’ basic aim is to get their ads noticed, they must be sensitive to, and comply with,
codes of practice operated by the industry watchdogs or country regulators. Messages should create
maximum impact but without causing public offence and irritation.
Choosing Media
The communicator must now select channels of communication. There are two broad types of
communication channel: personal and non-personal.
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Personal Communication Channels
In personal communication channels, two or more people communicate directly with each other.
They might communicate face-to-face, over the telephone or mobile phone, through the mail or even
through an Internet, ‘chat’. Personal communication channels are effective because they allow for
personal addressing and feedback.
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Some personal communication channels are controlled directly by the company. For example,
salespeople contact buyers in the target market. Other personal communications about the product
may reach buyers through channels not directly controlled by the company. These might include
independent experts – consumer advocates, consumer buying guides and others – making statements
to target buyers. Or they might be neighbours, friends, family members and associates talking to
target buyers. This last channel, known as word-of-mouth influence, has considerable effect in many
product areas.
Personal influence carries great weight for products that are expensive, risky or highly visible. For
example, buyers of cars and major appliances often go beyond mass-media sources to seek the
opinions of knowledgeable people. Companies can take steps to put personal communications
channels to work for them. For example, they can create opinion leaders – people whose opinions
are sought by others – by supplying certain people with the product on attractive terms. This is also
called buzz marketing – cultivating opinion leaders and getting them to spread information about a
product or service to others in their communities. They could work through community members
such as local radio personalities, heads of local organizations or community leaders. They can also
use influential people in their advertisements or develop advertising that has high ‘conversation
value’.
Non-Personal Communication Channels
Non-personal communication channels are media that carry messages without personal contact or
feedback. They include major media, atmospheres and events. Important media consist of print
media, broadcast media, and online and electronic media. Atmospheres are designed environments
that create or reinforce the buyer’s leanings towards buying a product. Thus lawyers’ offices and
banks are designed to communicate confidence and other factors that might be valued by their
clients. Events are occurrences staged to communicate messages to target audiences. For example,
public tours and other events to communicate with specific audiences.
Non-personal communication affects buyers directly. In addition, using mass media often affects
buyers indirectly by causing more personal communication. Communications first flow from
television, magazine and their mass media to opinion leaders step between h mass media ad their
audiences and carry messages to people who are less exposed to media. This suggests that mass
communication should aim their messages directly at opinion leaders, letting them carry the message
to others. For example, pharmaceutical firms direct their new drugs promotions at the most
influential doctors and medical experts first – the ‘thought leaders’ in the profession, if they are
persuaded, their opinions have an impact upon the new product’s acceptance by others in the field.
Thus opinion leaders extend the influence of the mass media. Or they may alter the message or not
carry the message, or not carry the message, thus acting as gatekeepers.
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Selecting the Message Source
In either personal or non-personal communication, the message’s impact on the target audience is
also affected by how the audience views he communicator. The credibility and attractiveness of the
message source – the company, the brand name, the spokesperson for attractiveness of the brand, or
the actor in the ad in the ad who endorses the product – must therefore be considered.
Messages delivered by highly credible sources are more persuasive.
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Pharmaceutical firms want doctors to tell about their products’ benefits because of doctors rank high
on expertise in their field, so they have high credibility. Many food companies promote to doctors,
dentists and their healthcare experts to motivate these professionals to recommend their products to
patients. For example, for years, Sensodyne toothpaste has promoted the product in dental surgeries,
and ads use endorsements by dental practitioners to persuade target users to adopt the brand. But, to
remain credible, the source must be perceived by the target audience as being an expert where the
product is concerned, and trustworthy: that is, objective and honest in his or her opinion of the
benefits claimed for the product.
Marketers also use celebrity endorsers – top athletes, well-know film stars, fashion models and even
cartoon characters – to deliver their brand messages. Michael Owen, Paul Gascoigne and Gary
Lineker have all spoken for walkers crisps, while Tiger Woods stands behind Nike, Tag Heuer and a
dozen other brands.
However, companies must be careful when selecting celebrities to represent their brands. Picking the
wrong spokesperson can result in embarrassment and a tarnished image. Nike found this out when it
entrusted its good name to the care of Kobe Bryant who was trialled for sexual assault. Pepsi and
Kodak faced similar embarrassment when their spokesperson, boxer Mike Tyson was accused of
beating his wife and was later jailed for rape.
Figure 10: Feedback measurements for two brands
20% not aware
100%
40% did
not try
Market
60% tried
Of these
80% aware
80%
disappointed
20% satisfied
60% not
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70% did
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30% tried
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Collecting Feedback
After sending the message, the communicator must research its effect on the target audience. This
involves asking the target audience members whether they remember the message, how many times
hey saw it, what points they recall, how they felt about the message, and their past and present
attitudes towards the product and company. The communicator would also like to measure behavior
resulting in the message – how many people bought a product, talked to others about it or visited the
store.
Figure 6 shows an example of feedback measurement for two hypothetical brands. Looking at Brand
A, we find that 80 per cent of the total market is aware of it, that 60 per cent of those aware of it
have tried it, but that only 20 per cent of those who tried it were satisfied. These results suggest that
although the communication programme is creating awareness, the product fails to give consumers
the satisfaction they expect. Therefore, the company should try to improve the product while staying
with the successful communication programme. In contrast, only 40 per cent of the total market of
Brand B, only 30 per cent of those aware of Brand B, has tried it, but 80 per cent of those who have
tried it are satisfied. In this case, the communication programme needs to be stronger to take
advantage of the brand’s power to obtain satisfaction.
Setting the Total Promotion Budget and Mix
We have looked at the steps in planning and sending communications to a target audience. But how
does the company decide on the total promotion budget and its division among the major
promotional tool to create the promotion mix? By what process does it blend the tools to create
integrated marketing communications? We now look at these questions.
Setting the Total Promotion Budget
One of the hardest marketing decisions facing a company is how much to spend on promotion. John
Wanamaker, an American department store magnate, one said: ‘I know that half of my advertising is
wasted, but I don’t know which half. I spent $2 million for advertising, and I don’t know if that is
half enough or twice too much.’ It is not surprising; therefore, that industries and companies vary
widely in how much they spend on promotion. Promotion spending may be 20 – 30 per cent of sales
in the cosmetics industry and only 2 or 3 per cent in the industrial machinery industry. Within a
given industry, both low and high spenders can be found.
How does a company decide on its promotion budget? There are four common methods used to set
the total budget for advertising: the affordable method, the percentage-of-sales methods, the
competitive-parity method and the objective-and-task method.
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Affordable Method
A common ‘rule-of-thumb’ used by many companies is the affordable method: they set the
promotion budget at the level they think the company can afford. They start with total revenues,
deduct operating expenses and capital outlays, and then devote some portion of the remaining funds
to advertising.
Unfortunately, this method of setting budgets completely ignores the effect of promotion on sales. It
tends to place advertising last among spending priorities, even in situations where advertising is
critical to the firm’s success.
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It leads to an uncertain annual promotion budget, which makes long-range market planning difficult.
Although the affordable method can result in overspending on advertising, it more often results in
under spending.
Percentage-of-Sales Method
In the percentage-of-sale method, marketers set their promotion budget at a certain percentage of
current or forecast sales. Or they budget a percentage of the unit sales price. Automotive companies
usually budget a fixed percentage for promotion based on the planned car price. Fast-moving
consumer goods companies usually set it at some percentage of current anticipated sales.
The percentage-of-sales method has advantages. It is simple to use and helps managers think about
the relationship between promotion spending, selling price and profit per unit. The method
supposedly creates competitive stability because competing firms tend to spend about the same
percentage of their sales on promotion.
Despite these claimed advantages, however, there is little to justify the method. It wrongly views
sales as the cause of promotion rather than as the result. The budget is based on availability of funds
rather than on opportunities. It may prevent the increased spending sometimes needed to turn around
falling sales. It fails to consider whether a higher or lower level of spending would be more
profitable. Because the budget varies with year-to-year sales, long-range planning is difficult.
Finally, the method does not provide any basis for choosing a specific percentage, except what has
been done in the past or what competitors are doing.
Competitive-Parity Method
Other companies use the competitive-parity method, setting their premonition budgets to match
competitors’ outlays. They watch competitors’ advertising or get industry promotion-spending
estimates from publications or trade associations, and then set their budgets based on the industry
average.
Two arguments support this method. First, competitors’ budgets represent the collective wisdom of
the industry. Second, spending what competitors spend helps prevent promotion wars. Unfortunately
neither argument is valid. There are no grounds for believing that the competition has a better idea of
what a company should be spending on promotion than does the company itself. Companies differ
greatly in terms of market opportunities and profit margins, and each has its own special promotion
needs. Finally, there is no evidence that budgets based on competitive parity prevent promotion
wars.
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Objective-and-Task Method
The most logical budget-setting method is the objective-and-task method, whereby the company sets
sit s promotion budget based on what it wants to accomplish with promotion. The method entails (1)
defining specific promotion objectives, (2) determining the tasks needed to achieve these objectives,
and (3) estimating the costs of performing these tasks. The sum of these costs is the proposed
promotion budget.
The objective-and-task method forces management to spell out its assumptions about the relationship
between amount spent and promotion results. But it is also the most difficult method to use. Mangers
have to set sales and profit targets and then work back to what tasks must be performed to achieve
desired goals. Often it is hard to figure out which specific tasks will achieve specific objectives.
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For example, suppose Phillips wants 95 per cent awareness for its new DVD player model during the
six-month introductory period. What specific advertising messages and media schedules would
Phillips need in order to attain this objective? How much would these messages and media schedules
cost? Philips management must consider such questions, even though they are hard to answer. By
comparing the campaign cost with expected profit gains, the financial viability of the promotions
campaign can be determined.
The main advantage of this method is that it gets managers to define their communication objectives,
how each objective will be met using selected promotion tools and the financial implications of
alternative communication programmes.
Setting the Promotion Mix
The concept of integrated marketing communication suggests that it must blend the promotion tools
carefully into a coordinated promotion mix. But how does the company determine what mix of
promotion tools it will use?
Companies are always looking for ways to improve by replacing one promotion tool with another
that will do the same job more economically. Many companies have replaced a portion of their field
sales activities with telephone sales and direct mail. Other companies have increase their sales
promotion spending in relation to advertising to gain quicker sales.
Designing the promotion mix is even more complex when one tool must be used to promote another.
Thus when British Airways decides to offer Air Miles for flying with the company, it has to run ads
to inform the public. When Lever Brothers uses a consumer advertising and sales promotion
campaign to back a new washing powder, it has to set aside money to promote this campaign to the
resellers to win their support.
Many factors influence the marketer’s choice of promotion tools. We now look at these factors.
The Nature of Each Promotion Tool
Each promotion tool has unique characteristics and costs. Marketers must understand these
characteristics in selecting the promotion mix. Let us examine each of the major tools.
Advertising
The many forms of advertising make it hard to generalize about its unique qualities. However,
several qualities can be noted:
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Advertising can reach masses of geographically dispersed buyers at a low cost per exposure; A for
example, TV advertising can reach huge audiences
Beyond its reach, large-scale advertising by a seller says something positive about the seller’s size,
popularity and success
Because of advertising’s public nature, consumers tend to view advertised products as standard and
legitimate – buyers know that purchasing the product will be understood and accepted publicly.
Advertising enables the seller to repeat a message many times, and lets the buyer receive and
compare the messages of various competitors
Advertising is also very expressive, allowing the company to dramatize its products through the
artful use of visuals, print, sound and colour.
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On the one hand, advertising can be used to build up a long-term image for a product. On the other
hand, advertising can trigger quick sales.
Advertising also has some Shortcomings
Although it reaches many people quickly, advertising is impersonal and cannot be as persuasive as
company salespeople
Advertising is only able to carry on a one-way communication with the 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 larger budgets.
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. Compared to advertising personal selling
has several unique qualities:
It involves personal interaction between two or more people, so each person can observe the other’s
needs and characteristics and make quick adjustments
Personal selling also allows all kinds of relationships to spring up, ranging from a matter-of-fact
selling relationship to a deep personal friendship. The effective salesperson keeps the customer’s
interests at heart in order to build a long-term relationship
Finally, with personal selling the buyer usually feels a greater need to listen and respond, even if the
response is a polite ‘no thank you’.
These unique qualities come at a cost, however, a sales force requires a longer-term commitment
than does advertising – advertising can be turned on and off, but sales force size is harder to change.
Personal selling is also the company’s most expensive promotion tool, costing companies several
hundreds euros on average per sales call,
Sales Promotion
Sales promotion includes a wide range of tools – coupons, contests, price reductions, premium
offers, free goods and others – all of which have many unique qualities
They Attract Consumer Attention and Provide Information that may Lead to a Purchase
They offer strong incentives to purchase by providing inducements or contributions that give
additional value to consumers
Moreover, sales promotions invite and reward quick response. Whereas advertising says ‘buy our
product; sales promotion offers incentives to consumers to ‘buy it now’.
Companies use sales promotion tools to create a stronger and quicker response. Sales promotion can
be sued to dramatize product offers and to boost sagging sales. Sales promotion effects are usually
short-lived, however, and are often not as effective as advertising or personal selling in building
long-run brand preference. To be effective, marketers must carefully plan the sales promotion
campaign and offer target customers genuine value.
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Public Relations
Public relations of PR offers several unique qualities. It is all those activities than the organization
does to communicate with target audiences, which are not directly paid for.
PR is very believable: news stories, features, sponsorship and events seem more real and believable
to readers than ads do
Public relations can reach many prospects who avoid salespeople and advertisements, since the
message gets to the buyers as ‘news’ rather than as a sales-directed communication
Like advertising PR can dramatize a company or product. The Body shop is one of the few
international companies that have used public relations as a more effective alternative to mass TV
advertising.
Marketers tend to under use public relations or to use it has an afterthought. Yet a well-thought-out
public relations campaign used with other promotion-mix elements can be very effective and
economical.
Direct Marketing
Although there are many forms of direct marketing – direct mail, telemarketing, electronic
marketing online marketing and others – they all share four distinctive characteristics.
Direct marketing is non-public as the message is normally addressed to a specific person
Direct marketing is immediate as messages can be prepared very quickly
Direct marketing can be customized, so messages can be tailored to appeal to specific customers
Direct marketing is interactive: it allows a dialogue between the communicator and the customer,
and messages can be altered depending on the consumer’s response.
Thus, direct marketing is well suited to highly targeted marketing efforts and to building one-to-one
customer relationships.
Promotion Mix Strategies
Marketers can choose form two basic promotion mix strategies – push promotion or pull promotion.
The figure below contrasts the tow strategies. The relative emphasis on the specific promotion tools
differs for push and pull strategies. A push strategy involves ‘pushing’ the product through
distribution channels to final consumers. The firm directs its marketing activities towards channel
members to induce them to carry the product and to promote it to final consumers. Using a pull
strategy, the producer directs its marketing activities towards final consumers to induce them to buy
the product. If the pull strategy is effective, consumers will then demand the product from channel
members, who will in turn demand it from producers. Thus under a pull strategy, consumer demand
‘pulls’ the product through the channels.
Some small industrial-goods companies’ use only push strategies; some direct-marketing companies
use only pull. However, most large companies use some combination of both. For example, Lever
Brothers uses mass-media advertising to pull consumers to its products and a large sales force and
trade promotions to push its products through the channels.
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In recent years, consumer-goods companies have been decreasing the pull portions of their
promotion mixes in favour of more push. There are a number of reasons behind this shift in
promotion strategy. One is the rising cost of mass-media campaigns.
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Many firms have also found advertising less effective in recent years. Companies are increasing their
segmentation efforts and tailoring their marketing programmes more narrowly, making national
advertising less suitable than localized retailer promotions. In these days of heavy brand extensions
and me-too products, many companies are finding it difficult to feature meaningful product
differentiations in advertising. Instead, they differentiate their brands through price reductions,
premium offers, coupons and other promotions aimed at the trade.
Figure 11: Push versus pull promotion strategy
Producer
Producer
Producer marketing activities Reseller marketing activities
(Personal selling, trade
(personal selling, advertising
Promotion, other)
sales promotion, other)
Retailers and
wholesalers
Demand
Demand
Retailers and
wholesalers
Consumers
Consumers
Producer marketing activities
(Consumer advertising, sales promotion, other)
The growing strength of retailers is also a key factor influencing the shift form pull to push. Big
retail chins in Europe have greater access now than ever before to product sales ad profit
information. They have the power to demand and get what they want from suppliers. And what they
want is margin improvements – that is, more push. Mass advertising bypasses them on its way to the
consumers, but push promotion benefits them directly. Consumer promoting give retailers an
immediate sales boost and cash from trade allowances pads retailer profits. So, manufacturers are
compelled to use push promotions just to obtain good shelf space and advertising support from their
retailers.
However, reckless use of push promotion leads to fierce price competition and a continual spiral of
price slashing and margin erosion, leaving less money to invest in the product R&D, packaging and
advertising that is required to improve and maintain long-run consumer preference and loyalty.
Robbing the advertising budget to pay for more sales promotion could mortgage a brand’s long-term
future for short-term gains. While push strategies will remain important, particularly in packagedgoods marketing, companies that find the best mix between the two – consistent advertising to build
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long-run brand value and consumer preference and sales promotion to crate short-run trade support
and consumer excitement – are most likely to win the battle for loyal and satisfied customers.
Factors in Designing Promotion Mix Strategies
Companies consider many factors when designing the promotion mix strategies, including the type
of product/market, buyer-readiness stage and the product life-cycle stage.
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Type of Product/Market
The importance of different promotional tools varies between consumer and business markets.
Consumer-goods companies usually put more of their funds into advertising, followed by sales
promotion, personal selling and then public relations. Advertising is relatively more important in
consumer markets because there are a larger number of buyers, purchases tend to be routine, and
emotions play a more important role in the purchase-decision process. In contrast, industrial-goods
companies put most of their funds into personal selling, followed by sales promotion, advertising
and public relations. In general, personal selling is used more heavily with expensive and risky
purchases, and in markets with fewer and larger sellers.
Figure 12: Relative importance of promotion tools in consumer versus industrial markets
Advertising
Sales promotion
Personal selling
Public relations
Relative importance
(Consumer goods)
Personal selling
Sales promotion
Advertising
Public relations
Relative importance
(Industrial goods)
Although advertising is less important than sales calls in business markets, it still plays an important
role. Advertising can build product awareness and knowledge, develop sales leads and reassure
buyers. Similarity, personal selling can add a lot to consumer goods marketing efforts. It is simply
not the case that ‘salespeople put products on shelves and advertising takes them off’. Well-trained
consumer-goods salespeople can sign up more dealers to carry a particular brand, convince them to
give more shelf space and urge them to use special displays and promotions.
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Buyer-Readiness Stage
The effects of the promotional tool vary for the different buyer-readiness stages. Advertising along
with public relations plays the leading role in the awareness and knowledge stages, more important
than that played by ‘cold calls’ from salespeople. Customer liking, preference and conviction are
more affected by personal selling, which is closely followed by advertising. Finally, closing the sale
is mostly done with sales calls and sales promotion. Clearly, advertising and public relations are the
most cost-effective at the early stages of the buyer decision process, while personal selling, given its
high costs, should focus on the later stages of the customer buying process.
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Product Life-Cycle Stage
The effects of different promotion tools also vary with stages of the product life cycle. In the
introduction stage, advertising and public relations continue to be powerful influences, whereas sales
promotion again becomes important relative to advertising. Buyers know the brands and advertising
is needed only to remind them of the product. In the decline stage, advertising is needed only to
remind them of the product. In the decline stage, advertising is kept at a reminder level, public
relations is dropped and salespeople give the product only a little attention. Sales promotion,
however, might continue strong in order to stimulate trade and prop up sales.
Integrating the Promotion Mix
Having set the promotion budget and mix, the company must now take steps to se that all of the
promotion mix elements are smoothly integrated. Here is a checklist for integrating the firm’s
marketing communications.
Analyse trends – internal and external – that can affect your company’s ability t do business. Look
for areas where communications can help the most. Determine the strengths and weaknesses of each
communications function. Develop a combination of promotional tactics based on these strengths
and weaknesses.
Audit the pockets of communications spending throughout the organization. Itemise the
communications budgets and tasks and consolidate these into a single budgeting process. Reassess
all communications expenditures by product, promotional tool, stage of the life-cycle, and observed
effect.
Identify all contract points for the company and its brands. Work to ensure that communications at
each point are consistent with your overall communications strategy and that your communications
efforts are occurring when, where and how your customers.
Team up in communications planning. Engage all communications functions in joint planning.
Include customers, suppliers and other stakeholders at every stage of communication planning.
Create compatible themes, tones and quality across all communications media. Make sure each
element carries your unique primary messages and selling points. This consistency achieving greater
impact and prevents the unnecessary duplication of work across functions.
Create performance measures that are shared by all communications elements. Develop systems to
evaluate the combined impact of all communications activities.
(Industrial goods)
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Appoint a director responsible for the company’s persuasive communications efforts. This move
encourages efficiency by centralizing planning and creating shared performance measures.
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4: Successful Marketing Communications Strategies
Products and Services for Consumers
Quality
Global competition is placing new emphasis on some basic tenets of business. It is shortening
product life cycles and focusing on the importance of quality, competitive prices, and innovative
products. The power in the marketplace is shifting form a seller’s market to customers, who have
more choices because there are more companies competing for their attention. More competition,
more choices, puts more power in the hands of he customer, and that, of course, drives the need for
quality. Gone are the days when the customer’s knowledge was limited to one or at best just a few
different product. Today the customer knows what is best, cheapest, and highest quality. It is the
customer who defines quality in terms of his or her needs and resources.
American products have always been among the world’s best, but competition is challenging us to
make even better products are among the most important criteria by which purchases are made. For
consumer and industrial products alike, the reason often given for preferring one brand over another
is better quality at a competitive price. Quality, as a competitive tool, is not new to the business
world, but many believe that it is the deciding factor in world markets. However, we must be clear
about what we mean by quality.
Quality Defined
Quality can be defined on two dimensions: market-perceived quality and performance quality. Both
are important concepts, but concepts, but consumer perception of a quality product often has more to
do with market perceived quality than performance quality. The relationship of quality conformance
to customer satisfaction is analogous to an airline’s delivery of quality. If viewed internally form the
firm’s perspective (performance quality), an airline has achieved quality conformance with as flight
and landing. But because the consumer expects performance quality be a given, quality to the
consumer is more than compliance (a safe flight and landing). Rather, cost timely service, frequency
of flights, comfortable seating and performance of airline personnel from check in to baggage claim
are all part of the customer’s experience that is perceived as being of good or poor quality.
Considering the number of air miles flown daily, the airlines industry is approaching zero defects in
quality conformance, yet who will sat that customer satisfaction is anywhere near perfection? These
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market perceived quality attributes are embedded in the total product, that is, the physical or core
product and all the additional features the consumer expects.
In a competitive marketplace where the market the market has choices, most consumers expect
performance quality to be a given. Naturally, if the product does not perform up to standards, it will
be rejected. When there are alternative products, all of which met performance quality attributes.
Interestingly, china’s leading refrigerator maker recognized the importance of these market
perceived quality attributes when it adopted a technology that enabled it to let consumers choose
form 20 different colors and textures for door hand green marble handles and moldings. Why is this
important? Because it lets consumers “update the living rooms” where most of the refrigerators are
parked. The company’s motive was simple: it positioned its product for competition form
multinational brands by giving the consumer another expression quality.
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Quality is also measured in many industries by objectives third parties. In the United States, JD
Power and Associates has expanded its auto quality ratings based on consumer surveys to other
areas, such as computers. Customer satisfaction indexes developed first in Sweden are now being
used to measure customer satisfaction across a wide variety of consumer products and services.
Finally, the U.S Department of Commerce annually recognise4s American firms for the quality of
their international offerings the Ritz Carlton Hotel chain has won the prestigious award twice.
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Maintaining Quality
Maintaining performance quality is critical, but frequently a product that leaves the factory at
performance quality is damaged as it passes through the distribution chain. This is a special problem
for many global brands for which production is distant form the market and/or control of the product
is lost because of the distrbut8ion system within the market. When Mars Company’s Snickers and
other Western confectioneries were first introduced to Russia, they were a big hit. Foreign brands
such Mars, Toblerone, Waldbaur, and Cadbury were the top brands indeed, only one Russian brand
placed in the top ten. But within the five years the Russian brand placed in the top ten. But within
five years the Russian brands had retaken eight of the top spots, and only one U.S. brand, Mars’s
Dove bars, was in the top ten.
What happened? A combination of factors caused the decline. Russian’s Red October Chocolate
Factory got its act together, modernized its packaging, product mix, and equipment, and set out to
capture the market. Performance quality was also an issue. When the Russian market opened to
outside trade, foreign companies anxious to get into the market dumped surplus out of date and poor
quality products. In other cases, chocolates were smuggled in and sold on street corners and were
often mishandled in the process. By the time they made it to consumers, the chocolates were likely
to be misshapen or discolored poor quality compared with Russia’s Red October chocolate.
Market perceived quality was also an issue. Russian chocolate has a different taste because of its
formulation more cocoa and chocolate liqueurs are used than in western brands, which make it
grittier. Thus, the Red October brand appeals more to Russian taste even though it is generally priced
above Western brands. As evinced by this example, quality is not just desirable, it is essential for
success in today’s competitive global market, and the decision to standardize or adapt a product is
crucial in delivering quality.
Physical or Mandatory Requirements and Adaptation
A product may have to change in a number of ways to meet the physical or mandatory requirements
of a new market, ranging form simple package changes to total redesign of he physical core product.
In many countries the term product homologation is used to describe the changes mandated by local
product and service standards. A recent study reaffirmed the often-reported finding that mandatory
adoptions were more frequently the reason for product than adapting for cultural market.
Legal, economic, political, technological, and climatic requirements of the local marketplace often
dictate product adaptation. During a period in India when the government was very anti foreign
investment, Pepsi-Cola changed its product name to Lehar-Pepsi (in Hindi, Lehar means “wave”) to
gain as much local support as possible. The name returned to Pepsi-Cola when the political climate
turned favorable. Laws that vary among countries usually set specific package sizes and safety and
quality standards. To make a purchase ore affordable in low-income countries, the number of units
per package may have to be reduced form the typical quantities offered in high-income countries.
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Razor blades, cigarettes, chewing gum, and other multiple pack items are often sold singly or tow to
pack instead of he more customary 10 or 20 Cheetos, a product of PepsiCo’s Frito-Lay, is packaged
on 15 gram boxes in china so it can be priced at 1 Yuan, about 12 cents. At this price, even children
with little spending money can afford Cheetos.
Changes may also have to be made to accommodate climatic differences. General Motors of Canada,
for example, experienced major problems with several thousand Chevrolet automobiles shipped to a
mid East country; it was quickly discovered they were unfit for the hot, dusty climate.
Supplementary air filters and different clutches had to be added to adjust for the problem. Similarly,
crackers have to be packaged in tins for humid areas.
The less economically developed a market is, the greater degree of change a product may need for
acceptance. One study found that only one in ten products could be marketed in developing countires
without modification of some sort. Because most products sold aboard by international companies
originate in home markets and most require some form of modification, companies need a
systematic process to identify products that need adapting.
A quality issue of growing importance the world over, especially in Europe and the United States, is
green marketing. Europe has been at eh forefront of the “green movement”, with strong public
opinion and specific legislation favouring environmentally friendly marketing. Green marketing is a
term used to identify concern with the environmental consequences of a variety of marketing
activities. The European Commission has passed legislation to control all kinds of packaging waste
throughout the EC. Two critical issues that affect product development are the control of the packing
component of solid waste and consumer demand for environmentally friendly products.
The Europeans Commission issued guidelines for eco-labeling that became operational in 1992.
Under the directive, product is evaluated on all significant environmental effects throughout its life
cycle, from manufacturing to disposal a cradle to grave approach. A detergent whose formulation
would be harmful when discharged friendlier than a detergent whose formulation would be harmful
when discharged into the environment. Aerosol propellants that do not deplete the ozone layer are
another example of environmentally friendly products. No country’s laws year require products to
carry an eco-label to be sold, however. The designation that a product is “environmentally friendly
product.
Since the introduction of he eco-label idea, Hoover washing machines have been the only products
that have gained approval for he eco-label. Interestingly enough, the benefits of winning the symbol
have resulted in Hoover trebling its market share in Germany and doubling its share of he premium
sector of the U.K. Washing machine market. The approval process seems to be deterring many
European manufacturers, many of whom are using their known, unofficial symbols. The National
Consumer Council, a consumer watchdog group, and reports that many consumers are so confused
and cynical about the myriad symbols that they are giving up altogether on trying to compare the
green credential of similar products.
Laws that mandate systems to control solid waste, while voluntary in one sense, do carry penalties.
The EC law requires that packaging material through all levels of distributions, from the
manufacturer to the consumer, be recycled or reused. Currently, between 50 percent and 45 percent
of he weight of the totality of packaging materials contained in packaging waste will be recycled.
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Each level of he distribution chain is responsible for returning all packaging, packing, and other
waste materials up the chain. The biggest problem is with the packaging form the customer if no
central recycling locations are available. For the manufacturer’s product to participate in direct
collection and not have to be returned to the retailer for recycling, the manufacturer must guarantee
financial support for curbside or central collection of all materials. The growing public and political
pressure to control solid waste is a strong incentive for compliance.
Although the packaging and solid waste rules and burdensome, there have been successful cases of
not only meting local standards but also being able to transfer this approach to other markets.
Procter $ Gamble’s international operations integrated global environmental concerns as a response
to increasing demands in Germany. It introduced Lenor, a fabric softener in a superconcentrated
form, and sold it in a plastic refill pouch that reduced packaging by 85 percent. This move increased
brand sales by 12 percent and helped set a positive tone with government regulators and activists.
The success of Lenor was transferred to the United States, where P $ G faced similar environmental
pressures. A superconcentrated Downy, the U.S. brand of fabric softener, was repackaged in refill
pouches that reduced package size by 75 percent, thereby costing consumers less green marketing as
a European problem; concern for the environment is worldwide and similar legislation is sure to
surface elsewhere. This is another example of the need to adapt products for global marketing.
Product and Culture
To appreciate the complexity of standardized versus adapted products, one needs to understand how
cultural influences are interwoven with the perceived value and importance a market places on a
product. A product is more than a physical item: it is bundle of satisfactions (or utilities) that the
buyer receives. These include its form, taste, colour, odor and texture; how it functions in use; the
package; the label; the warranty; manufacturer’s and retailer’s servicing; the confidence or prestige
enjoyed by the brand; the manufacturer’s reputation; the country of origin; and other symbolic utility
received form the possession or use of the goods. In short, the market relates to more than a
product’s confer much of the importance of these other benefits. In other words, product is the sum
of the physical and psychological satisfactions it provides the user.
A product’s attributes generally are required to create its primary function. The primary function of
an automobile, for example, is to move passengers from point A to B. this ability requires a motor,
transmission, and other physical features to achieve its primary purpose. The physical features or
primary function of an automobile product are required when moving form one culture to another.
However, an automobile (colour, size, design, brand name, price) have little to do with its primary
function the movement form point A to B but do add value to the satisfaction received.
The meaning and value imputed to the psychological attributes of a product can vary among cultures
and are perceived as negative or positive. To maximize the bundle of satisfactions received and to
create positive products attributes rather than negative ones, adaptation of the nonphysical features
of a product may be necessary. Coca-Cola, frequently touted as a global product, found it had to
change Diet Coke to Coke Light when it was introduced in Japan. Japanese women to not like to
admit to dieting, and further, the idea of diet implies sickness or medicine. So instead of
emphasizing weight loss, “figure maintenance” is stressed.
Adaptation may require changes of any one or all of the psychological aspects of a product. A close
study of the meaning of a product shows to what extent the culture determines an individual’s
perception of what a product is and what satisfaction that product provides.
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The adoption of some products by consumers can be affected as much by how the product concept
conforms with norms, values, and behaviour patterns as by its physical or mechanical attributes. For
examples, only recently have Japanese consumers taken an interest in dishwashers they simply
didn’t have room in the kitchen. However, very compact designs by Mitsubishi, Toto (a Japanese
toilet company), and others are making new inroads into Japanese kitchens. A novelty always comes
up against a closely intergraded cultural pattern, and it is primarily this determines whether, when,
how, and in what form it gets adopted. Insurance has been difficult to introduce into Muslim
countries because the pious could claim that it part look of both usury and gambling, both explicitly
voted in the Koran. The Japanese have always found all body jewelry repugnant. The Scots have a
decided resistance to pork and all its associated products, apparently form days long ago when such
taboos were founded on fundamentalist interpretations of he Bible. Filter cigarettes have failed in at
least one Asian country because a very low life expectancy hardly places many people in the age
bracket most prone to fears o flung cancer even supposing that they shared Western attitudes about
death.
When analyzing a product for a second market, the extent of adoption required depends on cultural
differences in product use and perception between the market the product was originally developed
for and the new market. The greater these cultural difference between the to markets, the greater the
extent of adoption that may be necessary.
An example of this rule of thumb involves an undisputed American leader in cake mixes, which
tacitly admitted failure in the English market by closing down operations after five unsuccessful
years. Taking its most successful mixes in the U.S. market, the company introduced them into the
British market. Considerable amounts of time, money, and effort were expended to introduce its
variety of cake mixes to this new market. Hindsight provides several probable causes for he
company’s failure. Traditionalism was certainly among the most important. The British eat most of
the cake with tea instead of dinner and have always preferred dry sponge cake, which is easy is to
handle; the fancy, iced cakes favored in the United Sates were the type introduced. Dancy iced cakes
are accepted in Britain, but they are considered extra special and are purchased form a bakery or
made with much effort and care at home. The company introduced what it thought to be an easy
cake mix. This easy cake mix was considered a slight to domestic prowess. Homemakers felt guilty
about not even cracking an egg, and there was suspicion that dried eggs and milk were not as good
as fresh ones. Therefore, when the occasion called for a fancy cake, an easy cake mix was simply not
good enough.
Ironically, this company had faced almost identical problems, which they eventually overcame,
when introducing new easy cake mixes in the U.S. market. There was initial concern about the
quality of mixes and the resulting effect on the homemaker’s reputation as a baker. Even today there
remains the feeling that “scratch” cakes are of special quality and significance can should be made
for extra important occasions. This feeling persists in spite of the fact that the uniform quality of
results form almost all mixes and the wide variety of flours certainly equal, if not exceed, the ability
of most to bake from scratch.
Such a cultural phenomenon apparently exists in other cultures as well. When instant cake mixes
were introduced in Japan, the consumers’ response was less than enthusiastic. Not only do Japanese
reserve cakes for special occasions, but also they prefer the cakes to be beautifully wrapped and
purchased in pastry shops. The Japanese homes do not have ovens. An interesting sidebar to this
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example is the company’s attempt to correct for that problem by developing a cake mix that could be
cooked in a rice cooker, which all Japanese homes have.
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The problem with that idea was that in a Japanese kitchen rice and the manner in which it is cooked
has strong cultural overtones, and to use the rice cooker to cook something other than rice is a real
taboo.
Examples are typically given about cultures other than American, but the need for cultural
adaptation is often necessary when a foreign company markets a product in the United States. A
major Japanese cosmetics company, Shiseido, attempted to break into the U.S. cosmetic market with
the same products sold in Japan. After introducing them in more than 800 U.S. stores, the company
realized that American taste in cosmetic is very different form Japanese. The problem was that
Shiseido’s make up required a time consuming series of steps, a point that does not bother Japanese
women. Success was attained after designing a new line of cosmetics as easy to use as American
products.
The problems of adapting a product to sell abroad are similar to those associated with the
introduction of a new product at home. Products are not measured solely by their physical
specifications. The nature of the new product is in what it odes to and for the customer to habits,
tastes, and patterns of life. The problems illustrated in the cake mix example have little to do with
the physical product or the user’s ability to make effective use of it, but more with fact that
acceptance and use of he cakes mixes would have required upsetting behaviour patterns considered
correct or ideal.
What significance, outside its intended use, might a product have in a different culture? When
product acceptance requires changes in patterns of life, habits, or taste, the understanding of new
ideas, the acceptance of the difficult to believe, or the acquisition of completely new tastes or habits,
special emphasis must be used to overcome natural resistance to change.
Innovative Products and Adaptation
An important first step in adapting a product to a foreign market is to determine the degree of
newness as perceived by the intended market. How people react to newness and how new product is
to market must be understood. In evaluating the newness of a product, the international marketer
must be ware that many products successful in the United States, having reached the maturity or
even decline stage in their life cycles, may be perceived as new in another country or culture and
thus must be treated as innovations. From a sociological viewpoint, any idea perceived as new by a
group of people is an innovation.
Whether or not a group accepts an innovation, and the t time it takes to do so, depends on the
product’s characteristics. Products new to a social system are innovations, and knowledge about the
diffusion (i.e, the process by which innovation spreads) of innovations is helpful in developing a
successful product strategy. Sony’s marketing strategies for the U.S. introduction of its Playsation 2
were well informed by its wild success achieved six months earlier during the product’s introduction
in Japan. Conversely, mid 1990s dips in Japanese sales of Apple computers were preceded by dips in
Apple’s home U.S. market. Marketing strategies can guide and control to a considerable extent the
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rate and extent of new product diffusion because successful new product diffusion is dependent on
the ability to communicate relevant product information and new product attributes.
A critical factor in the newness of a product is its effect on established patterns of consumption and
behaviour.
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In the preceding cake mix example, the fancy, iced cake mix was a product that required both
acceptance of the “difficult to believe”, that is, that dried eggs and milk are as good in cake as the
fresh products, and the acquisition of new ides, that easy to bake fancy cakes are not a slight to one’s
domestic integrity. In this case, the product directly affected two important aspects of consumer
behaviour, and the product innovation met with sufficient resistance to convince the company
studied the target market before introducing the product, perhaps it could have avoided the failure.
Another U.S. cake mix company entered the British market but carefully eliminated most of the
newness of the product. Instead of introducing the most popular American cake mixes, the company
asked 500 British housewives to bake their favorite cake. Since the majority baked a simple, very
popular dry sponge cake, the company brought to the market a similar easy mix. The sponge cake
mix represented familiar tastes and habits that could be translated into a convenience item and did
not infringe on the emotional aspects of preparing a fancy product for special occasions.
Consequently, after a short period of time, the second company’s product gained 30 to 35 per cent of
the British cake mix market. Once the idea of a mix for sponge cake was acceptable, the introduction
of other flavours became easier.
The goal of a foreign marketer is to gain product acceptance by the largest number of consumers in
the market in the shortest span of time. Although they may ultimately be accepted, the time it takes
for a culture to learn new ways, to learn to accept a new for investment and profitability. If a
marketer invests with the expectation that a venture will break even in three and it takes seven to
gain profitable volume, the effort may have to be prematurely abandoned. The question comes to
mind of whether the probable rate of acceptance can be predicted before committing resources and,
more critically, if the probable rate of acceptance is too low, whether it can be accelerated. In both
cases, the answer is a qualified yes. Answers to these questions come form examining the
Analyzing the five characteristics of an innovation can assist in determining the rate of acceptance or
resistance of the market to a product. A product’s (1) relative advantage (the perceived marginal
value of the new product relative to the old); (2) compatibility (its compatibility with acceptable
behaviour, norms, values, and so forth); (3) complexity (the degree of complexity associated with
product use); trailability (the degree of economic and/or social risk associated with product use); and
(5) observability (the ease with which the product benefits can be communicated) affect the degree
of its acceptance or resistance. In general, it can be postulated that the rate of diffusion is positively
related to relative advantage, compability, trailability, and observability, but negatively related to
complexity.
By analyzing a product within these five dimensions, a marketer can often uncover perceptions held
by the market that if left unchanged, would slow product acceptance. Conversely, if these
perceptions are identified and changed, the marketer may be able to accelerate product acceptance.
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The evaluator must remember that it is the perception of product characteristics by the potential
adopter, not the marketer that is crucial to the evaluation. A market analyst’s self-reference criterion
(SRC) may cause a perceptual bias when interpreting the characteristics of a product. Thus, instead
of evaluating product characteristics form the foreign user’s frame of reference, the marketer might
analyze them form his or her frame of reference, leading to a misinterpretation of the product’s
cultural importance.
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Once the analysis has been made, some of the perceived newness or cause for resistance can be
minimized through adroit marketing. The more congruent that product perceptions are with current
values, the less resistance there will be and the more rapid product diffusion or acceptance will be.
Production of Innovations
Some consideration must be given to the inventiveness of companies and countries. For example, it
is not surprise that most of the new ideas associated with the Internet are being produced in the
United States. The 110 million American users of the Internet far out number the 18 million
Japanese users. Similarly, America wins the overall R$D expenditure contest. Expenditures are
about the same across OCED countries at about 2 to 3 percent of GDP, so America’s large economy
supports twice R$D spending as does Japan, for example. This spending yields about three times the
U.S. patents granted to American firms versus Japanese firms. Many Japanese firms take advantages
of American innovativeness by establishing design centers in the United States most notable are the
plethora of auto design centers in southern California. At the same time American automobile first
have established design centers in Europe. Indeed, the Ford Taurus, the car that saved Ford in the
1980s, was a European design.
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5: International Marketing Communications
Global Perspective
Most industry analyst remains to be persuaded that there is a big enough market to justify the A380’s $10.2 billion development costs. Some call it folie de grandeur a foolish expression of
European pride. Airbus describes it as the “flagship” passenger jet of he next century that will give
the company victory over its archival, Boeing. We shall see.
While everyone is familiar with most of consumer brands sales of such products and services do not
constitute the majority of export sales for industrialized countries.
The issues of standardization versus adaptation have less relevance to marketing industrial goods
than consumer goods because there are more similarities in marketing products and services t
businesses across country markets than there are differences. The inherent nature of industrial goods
and the sameness in motives and behaviour among businesses as customers create a market where
product and marketing mix standardization are commonplace. Photocopying machines are sold in
Belarus for he same reasons as in the United States: to make photocopies. Some minor modification
may be necessary to accommodate different electrical power supplies or paper majority of industrial
goods. For industrial products that are basically custom made majority of industrial goods. For
industrial products that are basically custom made (specialized steel, customized machine tools, and
so on), adaptation takes place for domestic as well as foreign markets.
Two basic factors for greater market similarities among industrial goods customers than among
consumer goods customers. First is the inherent nature of the product: industrial products and
services are used in the process of creating other goods and services; consumers are in their final
form are consumed by individuals. Second, the motive or intent of he user differs: industrial
consumers are seeking profit whereas the ultimate consumer is seeking satisfaction. These factors
are manifest in specific buying patterns and demand characteristics, and in a special emphasis on
relationship marketing as a competitive tool. Whether a company is marketing at home or abroad the
differences between business to business and consumer markets merit special consideration.
Along with industrial goods, business services are highly competitive growth market seeking quality
and value. Manufactured products generally come to mind when we think of international trade. Yet
the most rapidly growing sector of U.S firms in global markets. The intangibility of services
accounting, advertising, banking, consulting, construction, hotels, insurance, law, transportation, and
travel sold by U.S firms in global markets. The intangibility of services creates a set of unique
problems to which the service provider must respond. A further complication is a lack of uniform
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laws that regulate market entry. Protectionism, although prevalent for industrial goods, can be much
more pronounced forth e service provider.
This chapter discusses the special problems in marketing goods and services to businesses
internationally, the increased competition and demand for quality in those goods and services, and
the implications for the global marketer.
Demand in Global Business-to-Business Markets
Gauging demand in industrial markets can involve some huge bets. Just ask the folk at Iridium LLC
their 72 satellite, $5 billion communications system may be in orbit but it doesn’t look like its going
to fly.
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They badly miscalculated demand for their approach to global telecommunications, and the entire
system is currently in diuse and may become space refuse. Three factors seem to affect the demand
in international industrial markets differently than in consumer markets. First, demand in
international
industrial markets is by nature more volatile. Second, stages of industrial and
economic development affect demand for industrial products. Finally, the level of technology of
products and services makes their sales more appropriate for some countries than others.
There are numerous reasons why consumer products firms market internationally exposure to more
demanding customers, keeping up with the competition, extending product life cycles, and sales and
profits, to name a few. For firms production products aboard: dampening the natural volatility of
industrial markets. Indeed, perhaps the single most important difference between consumer and
industrial marketing is the huge, cyclical swings in demand inherent in the latter. It is true that
demand for consumer durables such as cars, furniture, or home computers can be quite volatile. In
industrial markets, however, two other factors come into play that exacerbate both the ups and
downs in demand: professional buyers tend to act in concert, and derived demand accelerates
changes in markets.
Purchasing agents at large personal computer manufacturers such as IBM, Apple, Accer, Samsung
and Toshiba are responsible for obtaining component parts for their firms as cheaply as possible and
in a timely manner. They monitor demand for PCs and prices of components such as
microprocessors or disk drives, and changes in either costumer markets or supplier prices directly
affect their ordering. Declines in PC demand or supplier prices can cause these professionals to slam
on the brakes in their buying; in the latter case they wait for further price cuts. And because the
purchasing agents at all the PC companies, here and abroad are monitoring the same data, they all
brake (or accelerate) simultaneously. Consumers monitor markets as well, built not nearly to the
same degree. Purchases of cola and cars tend to be steadier.
For managers selling capital equipment and big-ticket industrial services, understanding the concept
of derived demand is absolutely fundamental to their success. Derived demand can be defined as
demand dependent on another source. Thus, the demand for Boeing 747s is derived from the
worldwide consumer demand for air travel services, and the demand for Flour Daniel’s global
construction and engineering services to design and build oil refineries in china is derived from
Chinese consumers’ fends for gasoline. Minor changes in consumer demand mean major changes in
the related industrial demand. The 15 per cent decline in consumer demand in year 5 results in a
complete shutdown of demand for shower stall making machines. For Boeing circa 1998, Asian
financial problems directly caused reductions in air travel (both vacation and commercial) to and
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within the region, which in turn caused cancellations of orders for aircraft, indeed, the commercial
aircraft industry has always been and will continue to be one of the most volatile of all.
Industrial firms can take several measures to manage this inherent volatility, such as maintaining
broad product lines, raising prices faster and reducing advertising expenditures during booms, or
ignoring market share as a strategic goal and focusing on stability. For most American firms, where
corporate cultures emphasize beating competitors, such stabilizing measures are usually given only
lip service. Conversely, German and Japanese firms value employees and stability more highly and
are generally better at managing volatility in markets.
Some U.S. companies, such as Boeing, Intel, and Microsoft, have been quite good at spreading their
portfolio of markets served.
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Late 1990s declines in Asian markets were somewhat offset by strong American markets, just as late
1980s increases in Japanese demand had offset declines in the United States. Indeed one of the
strange disadvantages of having the preciously command economies go private in their integration
into the global market. That is, prior to the breakup of the USSR, Soviets bought industrial outside of
he communist bloc. Their off cycle ordering tended to dampen demand volatility for companies able
to sell there. Now privately held Russian manufacturers watch and react to world markets just as
their counterparts do all over the globe. The increasing globalization of markets will tend to increase
the volatility in industrial markets as purchasing agents around the world act with even greater
simultaneity. Managing this inherent volatility will necessarily affect all aspects of the marketing
mix, including products/service development.
Because an industrial product is purchased for business use and sought not as an entity in itself but
as part of a total process, the buyer places high value on service dependability, quality, performance,
and cost. in international marketing, these features are complicated by cultural and environmental
differences, including variations in industrial development found among countries.
Perhaps the most significant environmental factor affecting the industrial goods market is the degree
of industrialization. Although generalizing about countries is almost always impendent, the degree of
economic development in a country can be used as a rough gauge of the market for industrial goods.
Because industrial goods are products for industry, there is a logical relationship between the degree
of economic development and the character of demand for industrial goods ground within a country.
Recall Rostow’s five-stage model of economic development. Demand for industrial products can be
classified correspondingly.
The first stage of development (i.e., the traditional society) is really a preindustrial or precommercial
stage with little or no manufacturing and an economy almost wholly based on the exploitation of raw
materials and agricultural products. The demand for industrial products is confined to limited range
of goods used in the simple production of the country’s resources, that is, the industrial machinery,
equipment, and goods required in the production of these resources. During this stage, a
transportation system develops that creates a market for highly specialized and expensive
construction equipment that must be imported.
The second stage (preconditions for take-off) reflects the development of primary manufacturing
concerned with the partial processing of raw material and resources, which in stage 1 were shipped
in raw form. At this level, demand is for the machinery and other industrial goods necessary for
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processing raw materials prior to exporting. For example, in South Africa there is demand for health
services, construction equipment, telecommunications equipment, mining and processing facilities,
power generating equipment, and technical expertise and training for most of the basic industries.
The third stage of development (take off) is characterized by the growth of manufacturing facilities
for nonduarable and semi durable consumer goods. Generally, the industries are small, local
manufacturers of consumer goods having relative mass appeal. In such cases, the demand for
industrial products extends to entire factories and the supplies necessary to support manufacturing.
Most of the eastern European countries, such as Russia, Romania and Ukraine fit this category.
Liberia is another country at this stage of development.
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The Liberian development corporation has been focusing attention on developing same and medium
sized industries, such as shoe factories and battery and nail manufacturing this degree of
industrialization requires machinery and equipment to build and equip the factories and supplies to
keep machinery and equipment imports form the United States are construction and mining
equipment, motor vehicles and parts, metal structures and parts, and manufactured rubber goods.
A country at stage 4 (drive to maturity) is a well-industrialized economy. This stage reflects the
production of capital goods as well as consumer goods, including products such as automobiles,
refrigerators, and machinery. Even though the country produces some industrial goods, it still needs
to import more specialized and heavy capital equipment not yet produced there but necessary for
domestic industry. Parts of Eastern European typify countries at this stage for example, the Czech
Republic, Hungary, Poland and Estonia. The needs of their industrial base reflect major
revitalization, creating an enormous market as they turn form socialist managed to market driven
economies.
Another category of countries in this fourth stage is the newly industrialized countries (NICs), many
of which were in stages 1 or 2 just a few decades ago. South Korea for example, has risen form a
war torn economy to a major competitor in world markets, offering an ever increasing number of
industrial and consumer products. Even though South Korea is a major exporter of high tech goods
such as petrochemicals, electronics, machines, automobiles and steel, it is dependent more
industrialized countries for industrial tools, commercial aircraft, information systems, and other
technologically advanced products not priestly produced in South Korea but necessary to sustain its
expanding manufacturing base. Sales form American industrial suppliers such as Boeing, Cisco
Systems, and Intel suffered substantially when South Korea growth nose-dived in 1997.
The fifth stage of economic development (the age of mass consumption) signifies complete
industrialization and generally indicates world leadership in the production of a large variety of
goods. Many of the industrial goods that had been purchased form others are now produced
domestically. Countries that have achieved this level typically compete worldwide for consumer and
industrial goods markets.
Japan, the United States, and Germany have all reached the fifth stage of industrial development, and
although they are industrialized economies, there is still the need to import goods. Countries in this
category are markets for ht e latest technology as well as for less sophisticated products that can be
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produced more economically in other countries. Demand is found for telecommunication equipment,
computer chips, electronic forklifts and lathes. However, products on the cutting edge of technology
and goods produced in the most cost effective manner are the important differential advantages for
companies competing for market demand in countries in the fifth stage. Indeed, information
technology exports are helping maintain world economic leadership well into the 21st century.
Success in a fiercely competitive global market for industrial goods depends on building an edge in
science and technology. The industrialization of many countries in stages 1 to 4 creates enormous
demand for goods produced by firms in the most advanced stages of technical development.
Automated machines that wire 640 circuits in an hour are phasing out the Asian worker who can
wire 1220 integrated circuits for semiconductor chips in one hour. As technology develops, countries
that have been relying on cheap labor for a competitive advantages have to shift to more
sophisticated machines, thus creating markets for products from more technologically advanced
countries.
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The Message: Creative Challenges
International communications may fail for a variety of reasons. A message may not get through
because of media inadequacy, the message may received by the intended audience but not be
intended audience and be understood but have no effect because the marketer did not correctly
assess the needs and wants or even the thinking processes of the target market.
The effectiveness of promotional strategy can be jeopardized by so many factors that a marketer
must be certain no controllable influences are overlooked. Those international executives who
understand the communications process are better equipped to manage the diversity they face in
developing an international promotional program.
In the international communications process, each of the seven identifiable steps can ultimately
affect the accuracy of the process.
1.An information source. An international marketing executive with a product message to
communicate.
2.Encoding. The message forms the converted into effective symbolism for transmission to a
receiver.
3.Decoding. The interpretation by the receiver of the symbolism transmitted from the information
source.
4.Receiver. Consumer action by those who receive the message and are the target of the thought
transmitted.
5.Feedback. Information about the effectiveness of the message that flows from the receiver (the
intended target) back to the information source for evaluation of the effectiveness of the process
6.A message channel. The sales force/or advertising media that convey the encoded message to the
intended receiver
7.Noise. Uncontrollable and unpredictable influences such as competitive activities and confusion
that detract form the process and affect any or all of he other six steps.
Unfortunately, the process is not as simple as just sending a message via a medium to a receiver and
being certain that the intended message sent is the same one perceived by the receiver. Otherwise, a
message falling outside the receiver’s perceptual filed may transmit an unintended meaning. It is this
area that even the most experienced companies make blunders.
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Most promotional misfires or mistakes in international marketing are attributable to one or several of
these steps not properly reflecting cultural influences or to a general lack of knowledge about the
target market. The product message to be conveyed should reflect the needs and wants of the target
market; however, often the actual market bends and the marketer’s perception of them do not
coincide. This is especially true when the marketers relies more on the self-reference criterion (SRC)
than on effective research. It can never be assumed that “if it sells well in one country, it will sell in
another.” for instance, bicycles designed and sold in the United States to consumers fulfilling
recreational exercise needs are not sold as sold as effectively for the same reason in a market where
the primary use of the bicycle is transportation. Cavity reducing fluoride toothpaste sells well in the
United States, where healthy teeth are perceived as important, but has limited appeal in markets such
as Great Britain and the French areas of Canada, where the reason for buying toothpaste is breath
control. From the set of the communications process, if basic needs are incorrectly defined,
communications fail because an incorrect or meaningless message is received even though the
remaining steps in the process are executed properly.
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The encoding step causes problems even with a “proper” message. At this step such factors as color,
timing, values, beliefs, humor and tastes can cause the international marketers to symbolize the
message incorrectly. For example, the marketer wants the product to convey coolness so the color
green is used; however, people in the tropics might decode green as dangerous or associate it with
disease. Another example of the encoding process misfiring was a perfume presented against a
backdrop of rain that, for Europeans, symbolized a clean, cool, refreshing image, but to Africans was
symbol of fertility. The prompted many viewers to ask if the perfume was effective against
infertility.
DeBeers, South Africa Diamond Company, found that its stylish ads depicting shadow figures
conveying engagement, wedding, and anniversary gifts of diamonds with ghosts and death. A totally
different ad was developed for the Chinese market. In some Muslim countries the ads had to be
altered so that shadows showed silhouettes of women wearing veils, rather than the barefaced
women shadows are show in Western markets.
Problems of literacy, media, media availability, and types of media create problems in the
communications process at the encoding step. Message channels must be carefully selected if an
encoded message is to reach the consumer. Errors such as using television as a medium when only a
small percentage of an intended market is exposed to TV, or using print media for a channel of
communications when the majority of the intended users cannot read or do not read the language in
the medium, are examples of infective media channel selection in the communications process.
Improper encoding, which caused such errors as Pepsi’s “come Alive” slogan being decoded as
“Come out of the grave” generally, creates decoding problems. Chevrolet’s brand name for the Nova
model (which means new star) was decoded into Spanish as No Va! , meaning “it doesn’t go”. In
another misstep, a translation that was supposed to be decoded as “hydraulic ram” was instead
decoded as “wet sheep”. In a Nigerian ad, a platinum blonde sitting next to the driver of a Renault
was intended to enhance the image of the automobile. However the model was perceived as not
respectable and so created a feeling of shame. An ad used for everyday energizer batteries with the
energizer bunny was seen by Hungarian consumers as touting a bunny toy, not a battery.
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Decoding errors may also occur accidentally. Such was the case with Colgate Palmolive’s selection
of the brand name Cue for toothpaste. The brand name was not intended to have any symbolism;
nevertheless, the French into a pornographic word instead decoded it. In some cases, the intended
symbolism has no meaning to the decoder. In an ad transferred form the United States, the irony of
tough guy actor Tom Selleck standing atop a mountain with a steaming mug of Lipton tea was lost
on Eastern Europeans. Errors at the receiver end of the process generally result form a combination
of factors; an improper message resulting form incorrect knowledge of use patterns, poor encoding
producing a meaningless message, poor media selection that does not get the message to the
receiver, or inaccurate decoding by the receiver so that the message is garbled or incorrect.
Finally, the feedback step of the communications process is important as a check on the
effectiveness of he other steps. Companies that do not measure their communications efforts are apt
to allow errors of source, encoding, media selection, decoding, or receiver to continue longer than
necessary. In fact, proper feedback system (ad testing) allows a company to correct errors before
damage occurs.
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In addition to the problems in the steps outlined, the effectiveness of the international
communications process can be impaired by noise comprises all other external influences, such as
competitive advertising, other external influences, such as competitive advertising, other sales
personnel, and confusion at the receiving end, that can detract form the ultimate effectiveness of the
communication. Noise is a disruptive force interfering with the process at nay step and is frequently
beyond the control of the sender or the receiver.
The model’s significance is that one or all steps in the.
process, cultural factors or the market’s SRC can affect the ultimate success of he communication.
for example, the message, encoding, media, and the intended can be designed perfectly but eh
inability of he receiver to decode may render the final message inoperative. in developing
advertising messages, the international marker can effectively use this model as a guide to help
ensure that all potential constraints and problems are considered so that the final communication
received and the action taken correspond with the intent of the source.
The growing intensity of international competition, coupled with the complexity of multinational
marketing, demands that the international advertiser function at the highwest creative level. The
creative task is made more daunting by other kinds of barriers to effective communications legal,
linguistic, cultural, media, production, and cost considerations.
.
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Personal Selling and Sales Management
The salesperson is a company’s most direct tie to the consumer; in the eyes of most customers, the
person is the company. As presenter of company offerings and gatherer of customer information, the
sales representative is the final link in the culmination of a company’s marketing and sales effort.
Increased global competition coupled with the dynamic and complex nature of international business
increases both the need and the means for closer ties with both customers and supplier. Relationship
marketing, built on effective communications between the seller and buyer, focuses on building
long-term alliances rather than treating each sale as a one-time event. Advances in information
technology are allowing for increasingly higher levels of coordination across advertising in customer
relationship management selling efforts, yielding new roles and functions in customer relationship
management (CRM). Similarly, such advances are changing the nature of personal selling and sales
management, leading some to forecast substantial reductions in field sales efforts.
In this ever-changing environment of international business, the tasks of designing, building,
training, motivating, and compensation an international sales group generate unique problems at
every stage of management and development. This chapter discusses the alternatives and problems
of managing sales and marketing personnel in foreign countries. Indeed, these problems are among
the most difficult facing international marketers. In one survey of CEOs and other top executives,
the respondents identified “establishing sales and distribution networks” and cultural differences” as
major difficulties in international sales and operations.
Designing the Sales Forces
The first step in managing a sale force is its design. Based on analyses of current and potential
customers, the selling environment, competition, and the firm’s resources and capabilities, decisions
must be made regarding the numbers, characteristics, and assignments of sales personnel. All these
design decisions are made more challenging by the wide variety of pertinent conditions and
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circumstances in international markets. Moreover, the globalization of market and customers. Selling
high technology products may allow for ht greater use of American expatriates, whereas selling
consulting services will tend to require more participation by native sales representatives. Selling in
low context (individualistic/egalitarian) cultures such as Germany may also allow for greater use of
expatriates. However, high context (collectivistic/hierarchical) countries such as Japan will require
the most complete local knowledge possessed only by natives. Writing about Japan, two
international marketing experts agree: “personal selling as a rule has to be localized for even most
global corporations and industries.
Once decisions have been made about how many expatriates, local nationals, or third country
nationals a particular market requires, then more intricate aspects of design can be undertaken, such
as territory allocation and customer call plans. Many of the most advanced operations research tools
developed in the United States can be applied in foreign markets, with appropriate adaptation of
inputs, of course. For example, one co company has provided tools to help international firms create
balanced territories and find optimal locations for sales offices in Canada, Mexico, and Australia.
However, the use of such high tech resource allocation tools requires intricate knowledge of not only
geographical details but also appropriate call routines. Many things can differ across cultures length
of sales cycles, the kinds of customer relationship, and the kinds of interactions with customers.
Indeed, more than one study has identified substantial differences in the importance of referrals in
the sales of industrial services in Japan vis-à-vis the United States.
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The implications are that in Japan sales calls be made not only on customers, but also on the key
people, such as bankers, in the all important referral networks.
Recruiting Marketing and Sales Personnel
The number of marketing management personnel form the home country assigned to foreign
countries according to the size of the operation and the availability of qualified locals. Increasingly,
the number of U.S home country nationals (expatriates) assigned to foreign posts is smaller as the
pool of trained, experienced locals grows. The largest personnel requirement aboard for most
companies is the sales force, recruited form three sources: expatriates, local nationals, and third
country nationals. a company’s staffing pattern may include all three types in any single foreign
operation, depending on qualifications, availability, and a company’s needs. Sales and marketing
executives can be recruited via the traditional media of advertising (including newspapers,
magazines, job fairs, and the internet), employment agencies or executive search firms, and the allimportant personal referrals. The last source will be crucial in many foreign countries, particularly
the high-context ones.
Expatriates
The number of companies relying on expatriate personnel is declining as the volume of world trade
increases and as more companies use locals to fill marketing positions. However, when products are
highly technical, or when selling requires an extensive background of information and applications,
an expatriate sales force remains the best choice. The expatriate salesperson may have the
advantages of greater technical training, better knowledge of the company and its product line, and
proven dependability. Because they are not locals, expatriates sometimes add to the prestige of the
product line in the eyes of foreign customers. And perhaps most important, expatriates usually are
able to effectively communicate with and influence headquarters personnel.
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The chief disadvantages of an expatriate sales force are the high cost, cultural and legal barriers, and
the limited number of high-caliber personnel willing to live abroad for extended periods. Companies
in the United State are finding it difficult to persuade outstanding employees to take overseas posts.
Employees are reluctant to go aboard for many reasons: some find it difficult to uproot families for a
two or three year assignment, increasing numbers of dual career couples often require finding
suitable jobs for spouses, and many executives believe such assignments impede their subsequent
promotions at home. Recall the comments of the executives in the Global Perspective. The loss of
visibility at corporate headquarters plus the belief that “out of sight is out of mind” are major reasons
for the reluctance to accept a foreign assignment. Companies with well-planned career development
programs have the least difficulty; indeed, the best international companies make it crystal clear that
a ticket to top management is an overseas stint. Korn/Ferry International reports in its most recent
survey of 75 senior executives form around the world that “international experience” is the attribute
identified as second most important for CEOs experience in marketing and finance positions were
first and third, respectively.
Expatriates commit to foreign assignments for varying lengths of time, from a few weeks or months
to a lifetime. Some expatriates have one-time assignments (which may last for years), after which
they are returned to the parent company; others are essentially professional expatriates, working
abroad in country after country. Still another expatriate assignment is a career long assignment to a
given country or region; this is likely to lead to assimilation of the expatriate into the foreign culture
to such an extent that the person may more closely resemble a local than an expatriate.
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Because expatriate marketing personnel are likely to cost substantially more than locals, a company
must be certain of their effectiveness.
More and more American companies are taking advantage of American employees who are fluent in
languages other than English. For example, many U.S. citizens speak Spanish as their first language.
The large number of Puerto Ricans working American multinationals in places like Mexico City is
well documented. Recent immigrants and their sons and daughter who learn their parents’ language
and both their native cultures will continue to be invaluable assets for firms wishing to enter such
markets. Certainly ethic Chinese and Vietnamese Americans are serving as cultural bridges for
commerce with those two nations. Indeed, throughout history commerce has always followed
immigration.
Virtual Expatriates
The Internet and other advances in communications technologies, along with the growing reluctance
of executives to move aboard, are creating a new breed of expatriate, the virtual one. According to a
pricewater HouseCoopers survey of 270 organizations, there has been a substantial increase in
shorter term, commuter and virtual assignments since 1997. Virtual expatriates manage operations in
other countries, but don’t move there. They stay in hotels, make long visits and maintain their
families at home. Some spend up to 75 percent of their working time traveling. None leave home
without the ubiquitous laptop and cell phone.
Close contact with subordinates and customers is, of course, tougher for virtual expatriates.
Moreover, the travel can be a killer that is, foreign bugs are often more virulent and easier to catch
on long international flights (indeed, one doctor calls airplanes “germ tubes”), crime against
expatriates and travelers in foreign cities is a real hazard, and living in hotels is lonely. However,
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virtual expatriates’ families don’t have to be uprooted, and executives can stay in closer touch with
the home office. Finally, form the firm’s perspective a virtual assignment may be the only option and
often a good way to avoid the extra expenses of an actual executive move.
The historical preference for expatriate managers and salespeople form the home country is giving
way to a preference for local nationals. For example, one study reports that the number of U.K.
Managers and professionals on international assignment dropped form a high of 30,000 in 1991 to a
low of about 22,000 in 1997. At the sales level, the picture is clearly biased on favour of the locals
because they transcend both cultural and legal barriers. More knowledgeable about a country’s
business structure than an expatriate would be, local salespeople are better able to lead a company
through the maze of unfamiliar distribution systems and referral networks. Furthermore, in some
places there are now pools of qualified foreign available, who cost less to maintain than a staff of
expatriates.
In Europe and Asia, many locals have earned MBA degrees in the United States; thus, a firm gets the
cultural knowledge of he local meshed with an understanding of U.S. business management systems.
Although expatiates’ salaries may be no more than those of their national counterparts, the total cost
of keeping comparable groups of expatriates in a country can be considerably higher (often three
times the expense) because of special cost of living benefits, moving expenses, taxes, and other costs
associated with keeping an expatriate.
The main disadvantage of hiring local nationals is the tendency of headquarters personnel to ignore
their advice.
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Even though most foreign nationals are careful to keep relationships at the home office warm, their
influence is often reduced by their limited English communications skills and lack of understanding
of how office politics influence communication skills and lack of understanding of how politics
influence decision-making. Another key disadvantage can be their lack of availability; one CEO of a
consulting firm that specializes in recruiting managers in china reports that ten openings exist for
every one qualified applicant. Moreover, while in the United States it is common practice to hire
away experienced salespeople form competitors, suppliers, or vendors, the same approach in other
countries will not work. In places like Japan, employees are much more loyal to their companies and
therefore are difficult to lure away even for big money. College recruits can also be hard to hire in
Japan because the smartest students are heavily recruited can also be hard to hire Japan because the
smartest students are heavily recruited by the largest Japanese firms. Smaller firms and foreign firms
are seen in Japan as much as more risky employment opportunities.
One other consideration makes recruiting of local nationals as sales representatives more difficult in
many foreign countries. We all know about Americans ‘aversion to being a “salesman”. Personal
selling is often derided as a career and represented in negative light in American media Arthur
Miller’s Death of a Salesman is of course the best example. Despite the bad press, however, personal
selling is the most common job in the United States. Indeed, the United States has been described as
“a nation of salesmen”. But, as negatively as hr selling profession is viewed in the United States, in
many other countries its viewed in even worse ways. Particularly in the more hierarchical cultures
such as Mexico and Japan, sales representatives tend to be on the bottom rung of the social ladder.
Thus, it can be very difficult indeed to recruit the brightest people to fill sales positions in foreign
operations.
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Third Country Nationals
The internationalization of business has created a pool of third country nationals (TCNs,),
expatriates form their own countries working for a foreign company in a third country. TCNs are a
group whose nationality has little to do with where they work or for whom. An example would be a
German working in Argentina for a U.S. company. Historically, aboard, but now a truly “global
executive” has begun to emerge. The recently appointed chairman of division of a major Netherlands
company is a Norwegian who gained that post after stints in the United States, where he was the
U.S. subsidiary’s chairman, and in Brazil, where he held the position of general manager. At one
time, a Frenchman, the Swiss subsidiary by a Dane, the German subsidiary by an Englishman, the
French subsidiaries by a Swiss, the Venezuelan subsidiary by an Argentinean, and the Danish
subsidiary by Dutchman ran Burroughs Corporation’s Italian subsidiary.
American companies often seek TCNs form other English speaking countries to avoid the double
taxation costs of their American managers. Americans working in Spain, for example, must pay both
Spanish and U.S income taxes, and most American firm’s compensation packages for expatriates are
adjusted accordingly. So given the same pay and benefits, it is cheaper for an American firm to post
a British executive in Spain than an American.
Overall, the development to TCN executives reflects not only a growing internationalization of
business but also an acknowledgement that personal skills and motivations are not the exclusive
property of one nation. TCNs often are sought because they speak several languages and know an
industry or foreign country well.
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More and more companies feel that talent should flow to opportunity regardless of one’s home
country.
The host government’s attitudes towards foreign workers complicate flexibility in selecting
expatriate U.S. Nationals or local nationals. Concerns about foreign corporate domination, local
unemployment, and other issues cause some countries to restrict the number of non-nationals
allowed to work within the country. Most countries have specific rules limiting work permits for
foreigners to positions that cannot be filled by a national. Further, the law often limits such permits
such permits to periods just long enough to train a local for a specific position. Such restrictions
mean that MNCS have fewer opportunities for sending home country personnel to management
positions aboard.
In earlier years, personnel gained foreign country experience by being sent to lower management
positions to gain the necessary training before eventually assuming top level foreign assignments.
Most countries, including the United States, control the number of foreign managers allowed to work
or train within their borders. In one year, the United States immigration and Naturalization Service
rejected 37 of 40 applications form European chefs that the Marriott Corporation wanted to bring the
United States for management training in their U.S. hotels.
Selecting Sales and Marketing Personnel
To select personnel for international marketing positions effectively, management must define
precisely what is expected of its people. A formal job description can aid management in expressing
long-range needs as well as current needs. In addition to descriptions for each marketing position,
the criteria should include special requirements indigenous to various countries.
People operating in the country need only the attributes of effective salespersons, whereas a
transnational manger can require skills and attitudes that would challenge a diplomat. International
personnel requirements vary considerably. However, some basic requisites leading to effective
performance should be considered because effective executives and salespeople, regardless of what
foreign country they are operating in, share certain personal characteristics, skills, and orientations.
Maturity is a prime requisite for expatriate and third country personnel. Mangers and sales personnel
working aboard typically must work more independently than their domestic counterparts. The
company must have confidence in their ability to make decisions and commitments without constant
recourse to thee home office or they cannot be individually effective.
International personnel require a kind of emotional stability not demand in domestic positions.
Regardless of location, these people are living in cultures dissimilar to their won; to some extent
they are always under scrutiny and always aware that they are official representatives of the
company aboard. They need sensitivity to behavioural variations in different countries, but they
cannot be so hypersensitive that their behaviour is adversely affected.
Managers or salespeople operating in foreign countries need considerable breadth of knowledge of
many subjects both on and off the job. The ability to speak one or more other languages differences
and deals effectively with the selling situation.
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The marketer who expects to be effective in the international marketplace needs to have a positive
outlook on an international assignment.
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People who do not like what they are doing and where they are doing it stand little chance of
success, particularly in a foreign country. Failures usually are the result of overselling the
assignment, showing the bright side of the picture and not warning about the bleak side.
An international salesperson must have a high level of flexibility, whether working in a foreign
country or at home. Expatriates working in a foreign country must be particularly sensitive to the
habits of ht e market those working at home for a foreign company must adapt to the requirements
and ways of the parent company. Successful adaptation in international affairs is based on a
combination of attitude and effort. Careful study of the customs of the market country should be
initiated before the marketer arrives and should be continued as long as there are facets of the culture
that are not clear. One useful approach is to listen to the advice of national and foreign
businesspeople operating in that country. Cultural empathy is clearly a part of the basic orientation
because it is unlikely that anyone can be effective if antagonistic or confused about the environment.
Finally, international sales and marketing personnel must be energetic and enjoy travel. Many
international sales representatives spend about two thirds of their nights in hotel rooms around the
world. Going through the long lines of customers and immigration after a 15 hour flight requires a
certain kind of stamina kind of stamina not commonly encountered. Some even argue that frequent
long flights can damage your health. Even the seductive lights of Paris nights fade after the fifth
business trip there.
Most of these traits can be assessed during interviews and perhaps during role-playing exercises.
Paper and pencil ability, biographical information, and reference checks are of secondary
importance. Indeed, as previously mentioned, in many countries referrals will be the best way to
recruit mangers and sales representatives, making reference checks during evaluation and selection
processes irrelevant.
There is also evidence that some traits that make for successful sales representatives in the United
States may not be important in other countries. In one study sales representatives in the electronic
industries in Japan and the United States were compared. For the American representatives, pay and
education were both found to be positively related to performance and job satisfaction? In Japan they
were not. That is, the Americans who cared more about money and were more educated tended to
perform better in and be more satisfied with their jobs. Conversely, the Japanese sales
representatives tended to be more satisfied with their jobs when their values were consistent with
those of their company. The few systematic studies in this genre suggest that selection criteria must
be localized, and American management practices must be adapted to foreign markets.
There is also evidence that some traits that make for successful sales representatives in the United
States may not be important in other countries. In one study sales representatives in the electronic
industries in Japan and the United States were compared. For the American representatives, pay and
education were both found to be positively related to performance and job satisfaction. In Japan they
were not. That is, the Americans who cared more about money and were more educated tended to
perform better in and be more satisfied with their jobs. Conversely, the Japanese sales
representatives tended to be more satisfied with their jobs when their values were consistent with
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those of their company. The few systematic studies in this genre suggest that selection criteria must
be localized, and American management practices must be adapted to foreign markets.
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Selection mistakes are costly. When an expatriate assignment does not work out, hundreds of
thousands of dollars are wasted in expenses and lost time. Getting the right person to handle the job
is also important in the selection of locals to work for foreign companies within their home country.
Most developing countries and many European countries have stringent laws protecting worker’s
right. These laws are specific as to penalties for the dismissal of employees. Perhaps Venezuela has
the most stringent dismissal legislation: with more than three months of service in the same firm, a
worker gets severance pay amounting to one month’s plus an additional 15 days’ pay for each year
employed. Further, after an employee is dismissed, the law requires that person be replaced within
30 days at eh same salary. Colombia and Brazil have similar laws that make employee dismissal a
high cost proposition.
Impact of cultural values of managing
After sales force has been established, next come the tasks of training, motivating, and controlling.
Several vital questions arise when performance these task in other cultures. How much does a
different culture affect management practices, processes, and concepts commonly used in the United
States? Practices that work well in the United States may not be equally effective when customs,
values, conflict handling behaviours, and lifestyles differ. Transferring management practices to
other cultures without concern for their exportability is no less vulnerable to major error than
assuming that product successful in the Untied States will be successful in other countries.
Management concepts are influenced by cultural diversity and must be evaluated in terms of
laocalnorms. Whether or not any single management practice needs adapting depends on the local
culture. Perhaps peter Ducker put it best: different people have to be managed differently”.
Because of the unlimited cultural diversity in the values, attitudes and beliefs affecting management
practices, only those fundamental premises on which U.S. management reader’s awareness of the
need for adaptation of management practices rather than to present a complete discussion of U.S.
culture and management behaviour.
There are many divergent views reading the most important ideas on which normative U.S. cultural
concepts are based. Those that occurs most frequently in discussions of cross cultural evaluations are
represented by the following:
 “Master of destiny” viewpoint
 Independent enterprise as the instrument of social action
 Personnel selection and reward based on merit
 Decisions based on objective analysis
 Wide sharing in decision making
 Never ending quest for improvement
 Competition yielding efficiency
The “master of destiny” philosophy is fundamental to U.S. management thought. Simply stated,
people can substantially influence the future; we are in control of our own destinies. This viewpoint
also reflects the attitudes that although luck may influence an individual’s future, on balance,
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persistence, hard work, a commitment to fulfill exceptions, and effective use of time give people
control of their destinies. In contrast, many cultures have a fatalistic approach to life. They believe
individual destiny is determined by a higher order and that what happens cannot be controlled.
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In the United States, approaches to planning, control, supervision, commitment, motivation,
scheduling, and deadlines are all influenced by the concept that individuals can control their futures.
In cultures with more collectivistic and fatalistic beliefs, these good business practices may be
followed, but concern for the final outcome is different. After all, if one believes the future is
determined by an uncontrollable higher order, than what difference does individual effort really
make?
The acceptance of the idea that independent enterprise is an instrument for social action is the
fundamental concept of U.S corporations. A corporation is recognized as an entity that has rules and
continuity of existence, and is a separate and vital social institution. This recognition of he
corporation as an entity can result in strong feelings of obligation to serve the company. Indeed, the
company may take precedence over family, friends, or other activities that might detract form what
is best for the company. This is in sharp contrast to the attitudes held by Mexicans, who feel strongly
that personal relationships are more important in daily life than the corporation.
Consistent with the view that individuals control their won destinies is the belief that personnel
selection and reward must be made on merit. The selection, promotion, motivation, or dismissal of
personnel by U.S. managers emphasizes the need to select the best-qualified persona for jobs,
retaining them as long as their performance meets standards of expectations, and continuing the
opportunity for upward mobility as long as those standards are met. In other cultures where
friendship or family ties may be more important than the vitality of the organization, the criteria for
selection, organization, and motivation are substantially different form those in U.S. companies. In
some cultures, organizations expand to accommodate the maximum number of friends and relatives.
If one knows that promotions are made on the basis of personal ties and friendship rather than on
merit, fundamental motivation lever is lost.
The very strong beliefs in the United States that business decisions are based on objective analysis
and that managers strive to be scientific has a profound effect on the U.S. manager’s attitudes
toward objectivity in decision making and accuracy of data. While judgment and intuition are
important criteria for making decisions, most U.S. managers believe decisions must be supported
and based on accurate and relevant information. Thus, in U.S. business, great emphasis is placed on
the collection and free f low of information to all levels within the organisation and on frankness of
expression in the evaluation of business opinions or decision. In other cultures, such factual and
rational support for decisions is not as important; the accuracy of data and even the proper reporting
of data are not prime prerequisites. Further, existing data frequently are for the eyes of a select few.
The frankness of expression and openness in dealing with data characteristics of U.S. businesses do
not fit easily into some cultures.
Compatible with the views that one controls one’s own destiny and that advancement is based on
merit is the prevailing idea of wide sharing in decision-making. Although decision making is not a
democratic process in U.S. businesses, there is a strong belief that individual in an organization
require and, indeed, need the responsibility of making decisions for continued development. Thus,
decisions are frequently decentralized, and the ability as well as the responsibility for making
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decisions are highly centralized, in part because of he belief that only a few in the company have the
right or the ability to make decisions.
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In the Middle East, for example, only top executives make decisions.
A key value underlying the American business system is reflected in the notion of a never depending
quest for improvement. The United States has always been a relatively activist society; in many
walks of life, the prevailing question is “can it be done better?” thus, management concepts reflects
the belief that change is not only normal buy also necessary, that nothing is scared or above
improvement. In fact, the merit on which one achieves advancement is frequently tied to one’s
ability to make improvements. Results are what count; if practices must change to achieve result,
and then change is in order. Another cultures, the strength and power of those in command
frequently rest not on change but on the premise that the status quo demands stable structure. To
suggest improvement implies that those in power have failed; for someone in a lower position to
suggest change would be viewed as a threat to another’s private domain rather than as the suggestion
of a later and dynamic individual.
Perhaps most fundamental to Western management practices is the notion that completion is crucial
for efficiency, improvement, and regeneration. Gordon Gekko put it most banally in the movie Wall
Street: “greed is good”. Adam Smith in his Wealth of Nations wrote one of the most important
sentences in the English language: “by pursuing his own interest he frequently promotes that of the
society more effectually than when he really intended to promote it”. This is the “invisible hand”
notion that justifies competitive behavior because it improves society and its organizations.
Competition among sales people (for example, sales contests) is a good thing because it promotes
better individual performance and consequently better corporate performance. When companies
compete, society is better off, according to this reasoning. However, managers and policy makers in
other cultures often do not share this “greed is good” view. Cooperation is more salient, and
efficiencies are attained through reduced transaction costs. These latter views are more prevalent in
collectivistic cultures such as China.
The views expressed here pervade much of what is considered U.S. management technique. They
are part of our self-reference criterion (SRC) and affect out management attitudes and they must be
considered by the international marketer when developing and managing an international sales force.
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6 Wider Issues of Marketing
6: Wider Issues of Marketing Communications
Legal Constraints
Laws that control comparative advertising vary country to country in Europe. In Germany, it is
illegal to use comparative terminology; you can be sued by a competitor if you do. Belgium and
Luxembourg explicitly ban comparative advertising, whereas it is clearly authorized advertising
allows implicit comparisons that do not name directive covering comparative advertising allows
comparisons between named products. The European commission has issued several directives to
harmonize the laws governing advertising.
However, member states are given substantial latitude to cover issues under their jurisdiction. Many
fear that if the laws are not harmonized, member states may close their borders to advertising that
does not respect their national rules.
Comparative advertising is heavily regulated in other parts of the world, as well. In Asia, an
advertisement showing chimps choosing Pepsi over Cooke was banned form most satellite
television; the phrase “the leading cola” was accepted only in the Philippines.
An Indian court ordered to cease claiming that it’s New Pepsodent toothpaste was “12% better” than
the leading brand. Colgate, the leading brand, was never mentioned in the advertisement, although a
model was shown mounting the word “Colgate” and the image was accompanied by a “ting” sound
recognized in all Colgate ads as the ring of confidence. Banning explicit comparisons will rule out
an effective advertising approach heavily used by U.S companies at home and in other countries
where it is permitted.
A variety of restrictions on advertising of specific products exist around the world. Advertising of
pharmaceuticals is restricted in many countries. For example, critics in Canada complain that laws
there haven’t been revised in 50 years and have been rendered obsolete by the advent of TV and
more recently the Internet. Toy, tobacco, and liquor advertising is restricted in numerous countries.
Advertising on television is strictly controlled in many countries. In Kuwait, the government
controlled TV network allows only 32 minutes of advertising per day, in the evening. Commercials
are controlled to exclude superlative descriptions, indecent words, fearful or shocking shots,
indecent clothing or dancing, contests, hatred or revenge shots, and attacks on competition. It is also
illegal to advertise cigarettes, lighters, pharmaceuticals, alcohol, airlines, and chocolates or other
candy.
There does seem to be some softening of country laws against accessibility to broadcast media.
Australia has ended a ban on cable television spots, and Malaysia is considering changing the rules
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to allow foreign commercials to air newly legalized satellite signals. However, with rare exceptions,
all commercials on Malaysian television still must be made in Malaysia.
Companies that rely on television infomercials and television shopping are restricted by the
limitations placed on the length and number of television commercials permitted when their
programs are classified as advertisements. The levels of restrictions in the European Community
vary widely, from no advertising on the BBC in the United Kingdom to member states that limit
advertising to a maximum of 15 percent of programming daily.
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Communications
6 Wider Issues of Marketing
The Television without Frontiers directive permits stricter or more detailed rules to the broadcasters
under jurisdiction of each member state. In Germany, for example, commercials must be spaced at
least 20 minutes apart and total ad time may not exceed 12 minutes per hour. Commercial stations in
the United Kingdom are limited to 7 minutes per hour.
Internet services are especially vulnerable as EU member states decide which area of regulation
should apply to these services. Barriers to pan-European services will arise if some member states
opt to apply television-broadcasting rules to the Internet while other countries apply print media
advertising rules. The good news is that the EU is addressing the issue of regulation of activities on
the Internet. Although most of the attention will be focused on domain names and Internet addresses,
the Commission does recognise that online activities will be severely hampered if subject to
fragmented regulation. Some countries have special taxes that apply structure in Austria best
illustrates how advertising taxation can distort media choice by changing the cost ratios of various
media: in federal states, with the exception of Bergenland and Tyrol there is a 10 per cent tax on ad
innervations; for posters, there is a 10 to 30 percent tax according to state and municipality. Radio
advertising carries a 10 per cent tax, except in Tyrol, where it is 20 percent. In Salsburg, Steiremark,
Karnten, and Voralbert, there is no tax. There is a uniform tax a 10 percent tax in Vienna, 20 percent
in Bergenland and 30 percent is Steiermark. There is no cinema tax in the pother federal states.
Linguistic Limitations
Language is one of the major barriers to effective communication through advertising. The problem
involves different languages of different countries, different languages or dialects within one
country, and the subtler problems of linguistic nuance and vernacular. Incautious handling of
language has created problems in all countries. Some examples suffice. Chrysler Corporation was
nearly laughed out of Spain when it translated its U.S. theme that advertised “dart is power” to the
Spanish, the phrase implied that buyers sought but lacked sexual vigor. The Bacardi Company
concocted fruity bitters with a made up name, pavene, suggestive of French chic. Bacardi want to
sell the drink in Germany, but pavene is perilously close to Pavian, which means “baboon”. A
company marking tomato paste in the Middle East found that in Arabic the phrase “tomato paste”
translates as “to mate glue” in Spanish speaking countries. The word ball translates in Spanish as
bola, which means ball in one country, revolution in another a lie or fabrication in another, and is an
obscenity in yet another.
Tropicana brand orange juice was advertised as jugo de china in Puerto Rico, but when transported
to Miami’s Cuban it was china the country and the Cubans were not in the market for Chinese juice.
One Middle East advertisement featured an automobile’s new suspension system that, in translation,
said the car was “suspended form the ceiling”. Since there are at least 30 dialects among Arab
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countries, there is ample room for error. What may appear as the most obvious translation can come
out wrong. For example, “a whole new range of products” in a German advertisement came out as “a
whole new stove of products”.
Language raises innumerable barriers that impede effective, idiomatic translation and thereby
hamper communication. This is especially apparent in advertising materials.
Abstraction, terse writing, and word economy, the most effective tools of the advertiser pose
problems for translators. Communication is impeded by the great diversity of cultural heritage and
education that exists within countries and which causes varying interpretations of even single
sentences and simple concepts.
Module 13 Marketing Communications Strategy
6 Wider Issues of Marketing
Communications
Some companies have tried to solve the translation problem by hiring foreign translators who live in
the United States his often is not satisfactory because both the language and the translator change, so
the expatriate in the Untied State is out of touch after a few years. Everyday words have different
meanings in different cultures. Even pronunciation causes problems: Wrigley had trouble selling its
Spearmint gum in Germany until it changed the spelling to Spearmint.
In addition to translation challenges low literacy, in many countries seriously impedes
communications and calls for greater creativity and use of verbal media. Multiple languages within a
country or advertising are pose another problem for the advertiser. Even a tiny country such as
Switzerland has four separate languages. The melting pot character of the Israeli population accounts
for some 50 languages. A Jerusalem commentor says that even through Hebrew “has become a
negotiable instrument of daily speech, this has yet to be converted into advertising idiom,”
advertising communications must be perfect, and linguistic differences at all levels cause problems.
In country testing with the target consumer group is the only way to avoid such problems.
Cultural Diversity
The problems associated with communicating to people in diverse cultures present one of the great
creative challenges in advertising. One advertising executive puts it bluntly; “international
advertising is almost uniformly dreadful mostly because people don’t understand language and
culture”. Communication is more difficult because cultural factors largely determine the way various
phenomena are perceived. If the perceptual framework is different perception of the message itself
differs.
Knowledge of cultural diversity must encompass the total advertising project. General Mills had two
problems with one product. When it introduced instant cake mixes in the United States and England,
it had the problem of overcoming the homemaker’s guilt feelings. When General mills introduced
instant cake mixes in Japan, the problem changed. Cakes were not commonly eaten in Japan, so
there was no guilt feeling, but the homemaker was concerned about failing. She wanted the cake mix
as complete as possible. in testing TV commercials promoting the notion that making a cake is as
easy as making rice, General Mills learned it was offending the Japanese homemaker, who believes
the preparation of rice requires great skill.
Existing perceptions based on tradition and heritages are often hard to overcome. For example,
marketing researchers in Hong Kong found that cheese is associated with yeung-Yen (foreigners)
and rejected by some Chinese. The concept of cooling and heating the body is important IN Chinese.
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The concept of cooling and heating the body is important in Chinese thinking malted milk is
considered heating, whereas fresh milk is cooling; brandy is sustaining, whiskey harmful.
Procter & Gamble’s initial advertisement for pampers brand diapers failed because of cultural
differences between the United States and Japan. A U.S. commercial that showed an animated stork
delivering pampers diapers to homes was dubbed into Japanese with the U.S. Package replaced by
the Japanese package and was put on the air. To P$G’s dismay the advertisement failed to build the
market. Some belated consumer research revealed that consumers were confused about why this bird
was delivering disposable diapers. According to Japanese folklore, giant peaches that float on the
river bring babies to deserving parents, not storks.
In addition to concerns with differences among nations, advertisers find subcultures within a country
require attention as well. In Hong Kong there are ten different patterns of breakfast eating.
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6 Wider Issues of Marketing
The youth of a country almost always constitute a different consuming culture from the older people,
and urban dwellers differ significantly from rural dwellers. Besides these differences, there is the
problem of changing traditions. In all countries, people of all ages, urban or rural, cling toothier
heritage to a certain degree but are willing to change some areas of behaviour. A few years ago, it
was unthinkable to try to market coffee in Japan, but it has become the fashionable drink for younger
people and urban dwellers who like to think of themselves as European and sophisticated. Coffee
drinking in Japan was introduced with instant with coffee, and there is virtually no market for
anything else.
Media Limitations
Media are discussed at length later, so here we note only that limitations on creative strategy
imposed by media may demise the role of advertising in the promotional program and may force
marketers to emphasize other elements of the promotional mix. A marketer’s creativity is certainly
challenged when a television commercial is limited to ten showings a year with no two exposures
closer than ten days, as is the case in Italy, creative advertisers in some countries have even
developed their own media for overcoming media limitations. In some African countries, advertisers
run boats up and down the rivers playing popular music and broadcasting commercial into rural
areas as they travel.
Production and Cost Limitations
Creativity is especially important when a budget is mall or where there are severe production
limitations, such as poor quality printing and a lack of high-grade paper. For example, the poor
quality of high circulation glossy magazines and other quality publications in Eastern Europe has
caused Colgate Palmolive to depart form its customary heavy use of print media in the West fo other
media. Newsprint is of such low quality in China that a color ad used by Kodak in the west is not an
option. Kodak’s solution has been to print a single sheet markets poses another problem in many
countries. Foe example, hand painted billboards must be instead of printed because the limited
number of billboards does not warrant the production of printed sheets. In Egypt, static filled
television and poor quality billboards have led companies such as coco-cola and Nestle to place their
advertisements on the sails of feluccas, boat that sail along the Nile. Feluccas, with the it triangle
sails, have been used to transport goods since the time of the pharaohs and serve as an effective
alternative to attract attention to company names and logos.
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