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CHAPTER 2
THEORETICAL REVIEW
2.1 Marketing Communications
It is important to recognize that we are talking about marketing
communications not just market communications. Marketing involves more parties
than just those defined by market members. For marketing to be successful many
people have to be involved in the communication process both within the
organization and outside it.
Over recent years marketing communications has become the favored term
among academics and some practitioners to describe “all the promotional elements of
the marketing mix which involve the communications between an organization and
its target audiences on all matters that affect marketing performance.” (Kotler, 2011)
Most prior research on the use of marketing information has studied
antecedents of the use of information in new product strategy decisions. This study
investigates factors that are related to the use of marketing information in the
evaluation of marketing communications productivity. The information used in this
context originates from a wide range of internal and external sources. Collected
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survey data indicate that information quality, organization formalization, task
complexity, market turbulence, rationality of decision style, and group involvement
are all positively related to the use of information in assessing marketing communications productivity.
Internal information (such as sales volume, profitability, and promotional
expenditures) and external syndicated information (such as market share and market
growth rates) are a major source of growth in the current information explosion.
A greater understanding of the factors that enhance marketing information use
in the following decision context is needed:
1.
In the evaluation of marketing communications productivity;
2.
When the information used includes a broad range of types of information,
including internal and external/syndicated sources; and
3.
When the degree of group involvement varies.
These implications may include changes in an organization's structure,
processes, and training that will enhance marketing information use, in turn
improving decision-making and marketing productivity. Quality of information is
related to its credibility, an important motivation for managers who tend to use more
credible information sources and weigh them more heavily in decisions or judgments.
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Marketing communications is 'promotion' from the marketing mix. The
marketing communications mix is the marketer‟s bag of tools for communicating
with customers and other stakeholders, consists of the specific blend of these tools
(Kasper, Helsdingen, and Gabbott, 2006):

Advertising: Any paid form of nonpersonal presentation and
promotion of ideas, goods, or services by an identified sponsor.

Sales promotion: Short-term incentives to encourage the purchase
or sale of a product or service.

Personal selling: Personal presentation by the firm‟s sales force for
the purpose of making sales and building suctomer relationship.

Public relation (PR): Building good relations with the company‟s
various publics by obtaining favorable publicity, building up a
good corporate image, and handling or heading off unfavorable
rumore, stories, and events.

Direct marketing: Direct connections with carefully targeted
individual consumers to both obtain an immediate response and
cultivate lasting customer relationships.
(Kerin and Peterson, 2007) said that development of an integrated marketing
communication mix requires the assignment of relative weights to particular
communication activities based on communication objectives. Although no
established guidelines exist for designing an optimal communication mix, several
factors that influence the mix need to be considered. These factors are:
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
The information requirements of potential buyers.

The nature of the offering.

The nature of the target markets.

The capacity of the organization.
The competitive marketplace is becoming more globalized, product life cycles
are getting shorter, and competitive boundaries are blurring. The selling process is
becoming more focused on relationship selling, selling teams are often necessary to
fully address customer needs, people are spending more of their time on internal
selling and to develop customer solutions and sales force success is increasingly
measured in terms of productivity and profits as opposed to top line revenues.
A sales force program is a tool for planning how the sales force will perform
its role in achieving the firm‟s objectives. The sales program planning process begins
by reviewing the firm‟s business and marketing strategies.
Despite the availability of information such as sales, market share, and
profit—the three most commonly used measures of marketing communications
productivity (Mullich, 1996). A greater understanding of the factors that enhance
marketing information use in the following decision context is needed:
1. In the evaluation of marketing communications productivity;
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2. When the information used includes a broad range of types of information,
including internal and external/syndicated sources; and
3. When the degree of group involvement varies.
These implications may include changes in an organization's structure,
processes, and training that will enhance marketing information use, in turn
improving decision-making and marketing productivity. Quality of information is
related to its credibility, an important motivation for managers who tend to use more
credible information sources and weigh them more heavily in decisions or judgments.
According to (Reed, 2004) this was followed, in the early part of the 20th
century, by a variety of sales communication models. These early models of
communication appeared at the time of the evolution of the mass market and mass
communication (initially confined to print media). The underlying assumption of
communication in this era was a stimulus-response concept commonly referred to as
the „magic bullet‟ theory.
It was believed that media messages could be implanted into an audience in a
uniform manner and that the audience would then directly respond to the advertising
message. It was also believed that consumers were rational decision makers actively
seeking product information. Involvement is target audience specific as different
individuals can purchase the same product with different levels of involvement. The
level of involvement ranges from high involvement to low involvement.
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Based on theoretical review marketing communication is a significant tool to
justify marketing spends and link the increase in sales to marketing efforts directly,
collection of marketing variables that are used by companies to achieve marketing
goals. When trade promotions are used, they should be part of a supplier's integrated
marketing communications strategy, complementing consumer promotions and
advertising that has the goal of building lasting preferences for its brand.
From all the explanation above, we can say that marketing communication
mix is how the company introduces their product by considering about advertising,
sales promotion, personal selling, Public Relations and direct marketing.
2.2 Marketing Process
According to (Steward and Shashi 2005), marketing communications that
identify shared goals directly or indirectly should facilitate the cognitive and affective
transfer from the parent brand to the extension. It should be possible for marketing
communication to reinforce, if not create, the linkages between a parent brand and its
extension.
When we applied the target marketing strategy, we have to identify the
specific needs of group of people. Every company develops different marketing
strategies to satisfy their customer. The process by which marketer do is referred to as
target marketing and involves four basic steps: identifying market with unfulfilled
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needs, segmenting the market, targeting specific segments, and positioning one‟s
product or service through marketing strategies.
2.3 The Communication Process
According to (Hawkins,
Bulmer,
Eagle, 2011) Integrated Marketing
Communications (IMC) is a prominent marketing framework and literature shows
that IMC principles are commonly and successfully, applied by business to improve
their communications efforts with customers.
According to (Holm, 2006) Communication remains as one of the most
human of activities. Communication define as “a transactional process between two
or more parties whereby meaning is exchanged through the intentional use of
symbols”.
According to (Belch, 2007), promotion has been defined as the coordination
of all seller-initiated efforts to set up channels of information and persuasion in order
to sell goods and services or promote an idea.
The promotional planner must think about the process consumers will go
through in responding to marketing communications. The response process for
products or services for which consumer decision making is characterized by a high
level of interest is often different from that for low-involvement or routine purchase
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decisions. These differences will influence the promotional strategy. Communication
objectives refer to what the firm seeks to accomplish with its promotional program.
They are often stated in terms of the nature of the message to be communicated or
what specific communication effects are to be achieved.
2.4 The Role of IMC in the Marketing Process
According to (Hollensen, 2003) Integrated marketing communication (IMC)
is the coordination of advertising, sales promotion, personal seling, public relations
and sponsorship to reach customers with a powerful unified effects.
According to (Holm, 2006) there are common tents that characterise IMC,
these including: being customer-focused, communicating consistent messages using
all forms of relevant media, building relationships with stakeholders, and achieving
sustained behaviour change among the target audience
Figure 2-1 shows, development of a marketing program requires an in-depth
analysis of the market. The model includes a marketing strategy and analysis, target
marketing, program development, and the target market. The marketing process
begins with a marketing strategy that is based on a detailed situation analysis and
guides for target market selection and development of the firm‟s marketing program.
In the planning process, the situation analysis requires that the marketing strategy be
assumed. The promotional program is developed with this strategy as a guide.
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One of the key decisions to be made pertains to the target marketing process,
which includes identifying, segmenting, targeting, and positioning to target markets.
There are several bases for segmenting the market and various ways to position a
product. Once the target marketing process has been completed, marketing program
decisions regarding product, price, distribution, and promotions must be made. All of
these must be coordinated to provide an integrated marketing communications
perspective, in which the positioning strategy is supported by one voice. Thus all
product strategies, pricing strategies, and distribution choices must be made with the
objective of contributing to the overall image of the product or brand. Advertising
and promotion decisions, in turn must be integrated with the other marketing-mix
decisions to accomplish this goal.
Source: George E. Belch and Michael A. Blech (2007), Advertising and Promotion: An Integrated Marketing
Communication Perspective. Mc-GrawHill
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Marketing plans can take several forms but generally include five basic
elements:

A detailed situation analysis that consists of an internal marketing audit and
review and an external analysis of the market competition and environmental
factors.

Specific marketing objectives that provide direction, a time frame for
marketing activities, and a mechanism for measuring performance.

A marketing strategy and program that include selection of target market(s)
and decisions and plans for the four elements of the marketing mix.

A program for implementing the marketing strategy, including determining
specific tasks to be performed and responsibilities.

A process for monitoring and evaluating performance and providing feedback
so that proper control can be maintained and any necessary changes can be
made in the overall marketing strategy or tactics.
2.5 Analysis of the Communications Process
According to (Holm, 2006), the primary goal of IMC is to affect the
perception of value and behavior through directed communication. The development
and diffucion of IMC is closely associated with fast technological advancement and
of a rapidly globalizing and deregulations of markets and individualization of
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comsumption patterns. This has emphasized the need to adjust objectives and
strategies to changing marketing and communication realities.
From this poitn of view, communication has to move from tactics to strategy.
This stage of the promotional planning process examines how the company
can effectively communicate with consumers in its target markets. The promotional
planner must think about the process consumers will go through in responding to
marketing communications. The response process for products or services for which
consumer decision making is characterized by a high level of interest is often
different from that for low-involvement or routine purchase decisions. These
differences will influence the promotional strategy.
Communication objectives refer to what the firm seeks to accomplish with its
promotional program. They are often stated in terms of the nature of the message to
be communicated or what specific communication effects are to be achieved.
Communication objectives may include creating awareness or knowledge about a
product and its attributes or benefits; creating an image; or developing favorable
attitudes, preferences, or purchase intentions. Communication objectives should be
the guiding force for development of the overall marketing communications strategy
and of objectives for each promotional-mix area.
The final stage of the promotional planning process is monitoring, evaluating,
and controlling the promotional program. It is important to determine how well the
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promotional program is meeting communications objectives and helping the firm
accomplish its overall marketing goals and objectives.
2.6 SWOT Analysis
According to (Belch, 2007), SWOT (strength, weakness, opportunities and
threats) analysis is a technique specially designed to help identify suitable marketing
strategies for company to follow. A SWOT analysis encompasses both the internal
and external environments of the firms.
Still from (Belch, 2007) Internally, the framework addresses a firm‟s
strengths and weaknesses on key dimensions such as financial performance and
resource; human resources; production facilities and capacity; market share; customer
perceptions of product quality, price, and product availability; and organization
communication. The assessment of the external environment includes information on
the market (customer and competition), economic conditions, social trends,
technology, and government regulation.
2.7 STP Marketing and the Evolution of Marketing Strategies
According to (O‟Guinn and Semenik , 2009) the target segment is the
subgroup (of the larger market) chosen as the focal point for the marketing program
and advertising campaign. Markets are segmented; products are positioned. To pursue
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the target segment, a firm organizes its marketing and advertising efforts around a
coherent positioning strategy.
Bases for segmentation refered to (Belch, 2007):
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Geographic segmentation. These units may include nations, states, countries
or even neighborhoods.
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Demographic segmentation dividing the market on the basis of demographic
variables such as age, sex, family size, education, income, and social class.
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Psychographic segmentation dividing the market on the basis of personality
and/or lifestyles.
-
Behavioristic segmentation dividing consumers into groups according to their
usage, loyalties, or buying responses to a product.
-
Benefit segmentation. In purchasing products, consumers are generally trying
to satisfy specific needs or wants. They are looking for products that provide
specific benefits to satisfy these needs.
Selecting a target market
According to (Wood, 2004) the target marketing process involves determining
how many segments to enter and determining which segments offer the most
potential.
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Positioning process
According to (Wood, 2004) with positioning, use marketing to create a
competitively distinctive position for the product in the minds of targeted
customers.