Download Sales Promotion

Ashesi University
COURSE TITLE : MARKETING
SEMESTER : FIRST, 2011/2012
MODULE 9: Making Communication Decisions
Lecturer: Ebow Spio
Learning Outcomes
1. Explain the key models of communications
2. Define and explain the roles of marketing communications to
differentiate, remind or reassure, inform and persuade
(DRIP)
3. Outline the steps in developing effective marketing
communications
4. Define the five promotion tools and their roles and discuss
the factors that must be considered in shaping the overall
promotion mix
5. Explain the methods for setting the promotion budget and
factors that affect the design of the promotion mix
Definition of Communications
Communication is the process whereby
thoughts are conveyed and meaning is
shared between individuals or between
organizations and individuals
COMMUNICATION MODEL
Encode
Sender
Decode
Message
Feedback Loop
Receiver
COMMUNICATION MODEL
Sender: The person sending the message to another person
Encoding: The process of putting the intended message or
thought into a symbolic form
Message: The set of words, pictures or symbols that the sender
transmits
Decoding: The process by which the receiver assigns meaning to
the symbols encoded by the sender
Receiver: The person receiving the message sent by another
person
Response: The reactions of the receiver after being exposed to
the message e.g. awareness of attributes, buy etc.
Feedback: The part of the receiver’s response communicated
back to the sender
Noise : The unplanned static or distortion during the
communication process, which results in the receiver getting a
different message than the one the sender sent
Integrated Marketing Communications
• Marketing Communication is a management process
through which an organisation enters into a dialogue
with its various audiences.
• Integrated marketing communication (IMC) is the
integration by the company of its communication
channels to deliver a clear, consistent, and compelling
message about the organization and its brands
Integrated Marketing Communications
• IMC considers all sources of brand & company
contacts which a customer or prospect has with a
product or service as a potential delivery channels for
future message.
• Integrated marketing communication involves
identifying the target audience and shaping a wellcoordinated promotional program to obtain the
desired audience response
Purposes of Communication
• Differentiate products and services
• Remind and reassure customers and potential
customers
• Inform
• Persuade targets to think and act in a particular way.
Promotional Tools
Personal Selling
Branding
Sales Promotion
Sponsorship
Public Relations
Advertising
The Customer
Packaging
Merchandising
Direct Marketing
Exhibitions
Corporate
Image
Internal
Marketing
Word of Mouth
The Promotion Mix
The promotion mix is the specific blend of advertising,
public relations, personal selling, and direct-marketing
tools etc that the company uses to persuasively
communicate customer value and build customer
relationships
14--4
Steps in Developing Effective Communications Plan
CONTEXT ANALYSIS
• Key Issues
COMMUNICATION OBJECTIVES
Market
Research
COMMUNICATION STRATEGY
• Target Audience
• Positioning
• Choice Promotional Mix
• Push, Pull and Profile Strategy
•Creative and Media Strategy
INTEGRATED COMMUNICATION
PLAN
• Budgets
• Scheduling
• Implementation
Steps in Developing Effective Communication
Determining the Communications Objectives
Marketers seek a purchase response that results from
a consumer decision-making process that includes the
stages of buyer readiness
•
Awareness
•
Knowledge
•
Liking
•
Preference
•
Conviction
•
Purchase
SMART objectives
Example: “The marketing communications objective for the period
January-March 2003 is to create 65% prompted awareness in
the ABC1, male 30-45 year old age group and those earning
14-24
£25,000 plus”
Promotion Tools : Advertising
Advertising is any paid form of non-personal
presentation and promotion of ideas, goods,
or services by an identified sponsor through
mass media with the purpose of achieving set
objectives such as creating awareness or
encouraging trial.
• Used to differentiate, remind, inform
and persuade
Stages in Developing Advertising Campaign
•
•
•
•
•
•
Define campaign responsibilities
Define target audience
Set campaign objectives
Set budgets
Media Selection and planning
Advertising development and testing
(message strategy, creative concept &
message execution)
• Implementation and scheduling
• Campaign evaluation
Developing Advertising Campaign: Message
Message strategy is the general message that
will be communicated to consumers. Focus largely
on consumer benefits.
Creative concept is the idea that will bring the
message strategy to life and guide specific
appeals to be used in an advertising campaign
Characteristics of the appeals include:
•
Meaningful
•
Believable
•
Distinctive
Developing Advertising Campaign: Message
High
involvement
• Rational product attribute
appeals
• Information provision
Low
Involvement
• Benefit claims
• Emotional image-based appeal
• Social, ego, hedonic orientation
Developing Advertising Campaign: Message
Message Execution :Four elements important:
• The balance : information vrs pleasure
• The structure: conclusion drawing, One or two sided
message, Primary vrs recency
• The source/credibility : company, opinion leader or
former
• Message Execution Styles : Information (factual, slice
of life, demonstration, comparative advertising) vrs
Emotion & Feeling (fear, humour, animation, sex,
music, fantasy)
Personality Symbol, Scientific Evidence, Technical
Expertise, Testimonial Evidence & endorsement
The Communications Industry
• The media
• The clients
• The agencies : An agency represents an external
supplier which an organization contracts to provide
services that assist in the creation and
implementation of effective communications.
• Support organisations
Communications Industry
Statutory & Self-Regulatory Control • Advertising Association of Ghana
• National Media Commission
• Private Newspaper Publishers of Ghana
• Advertisers Board
• Food and Drugs Board
• National Communication Authority
Agency Types
1. Full service : These provide full wide range of services
2. Limited Service Agencies: Specialize in specific elements of the
marketing communications process such as design or new media
• Direct Marketing
• Creative Hot Shops
• Sales Promotion
• Media Buying Houses
• Design Studios
• PR
3. A la Carte Agencies
An a la carte agency co-ordinates a range of specialist agencies on
behalf of an organization and outsources the work across a range
of other specialist agencies. This option provides great flexibility
but integration of campaigns can be problematic.
Agency Structure: Full Service
Agencies
Full Service Agencies : These agencies provide a
full range of services
Market
Research
Creative
Strategic
Production
Media Planning
Advantages : 1. Huge pool of staff under one roof that can be drawn on as needed
2. New different perspectives on communication problems may be
gained
3. Easier to manage integrated marketing communication under
one roof.
Disadvantages: Having your eggs in one basket. A gap is created when relationship breaks down.
Agency Structure
 Company Management
Board of Directors - Finance, direction of company
 Account Management
Account Directors, Managers and Executives liaison with and developing clients
 Creative Staff
Generally in two man teams visualiser and
copywriter
 TV Staff
Internal production staff
 Art Staff
Make up the ads, story boards etc.
Agency Structure
 Traffic Staff
Make sure all the elements come together
 Media Staff
Buying, TV air time, press, posters, radio, cinema
etc.
 Planning Staff
Developing advertising strategy and tactics for
clients
 Admin Staff
General administration billing of clients etc.
Agency remuneration
• Fees
• Media percentage 10% - 15%
• Print mark up 17.65% +
• Performance related
• Hourly rate
• Project by project quotes
The Agency brief
The success or failure of the implementation of a communications
campaign can depend on the quality of the brief given to the
agency. It is not easy to brief.
Briefing Outline:
• Current situation
• Promotional Objectives
• Target Markets
• Product/Service
• Budget
• Competitors
• Time Scales
Advertising Brief Format
 Why do we want new brand communication? Launch,
 What consumer understanding or insight drives this brief?
 Who is our target audience?
 What do they think and do now? State of mind or current
behaviour
 What would we like them to think and do in response to the
advertising? Objectives
 What is most likely to achieve this change? (i.e. the
differentiator or unique selling proposition) Could be functional
as well emotional
 Why should they believe it? Supporting evidence
 Practical Considerations : e.g. type of ad, media, duration
Sales Promotion
Marketing activities or techniques which are
intended to stimulate quick buyer action by
offering extra benefits or added value. The key
aim may be to accelerate sales or generate
trials. E.g. free sampling, premiums, coupons
Sales Promotion
• Offers buyers additional inducement to
buy
• Can be targeted at consumers,
intermediaries and the sales force
• Reach new customers
• Reduce distributor risk
• Reward behaviour
• Retention
• Assist segmentation
• Improve efficiency
Increasing Emphasis of Sales
Promotion
• Short termism (Target pressure)
• Management Accountability
• Brand Performance and Retail Technology
advancement
• Brand expansion and challenges of vast
spectrum of choice
• Competing brands offer less differentiation
• Competition for shelf space
• Consumers have become deal oriented.
• Retailers demanding more deals from suppliers
Objectives of Sales Promotion
• To stimulate trial
• To level out demand fluctuations
• To increase usage
• To encourage trading up
• To stem competitor move
• To maintain shares
• To increase customer loyalty
Sales Promotion
Types of Sales Promotions
•
•
•
Consumer promotions: Targeted End user
Trade promotions : Targeted at the
intermediaries e.g. wholesalers, retailers
Sales force promotions
Sales Promotion :Consumer Promotion Tools
•
•
•
•
•
•
Samples
Coupons
Cash refunds
Price packs
Premiums
Advertising
specialties
•
•
•
•
•
•
Patronage rewards
Point of purchase
displays
Demonstrations
Contests
Sweepstakes
Games
16-58
Sales Promotion :Trade Promotion
Tools
Trade promotion tools persuade resellers to:
•
Carry a brand
•
Give the brand more shelf space
•
Promote the brand in advertising
•
Push the brand to consumers
16-63
Sales Promotion :Trade Promotion
Tools
Trade promotion tools include:
•
Discount
•
Allowance
•
Free goods
•
Specialty advertising
Sales Promotion : Business Promotions
Tools
Business promotion tools are used to:
•
Generate leads
•
Stimulate purchases
•
Reward customers
•
Motivate salespeople
•
Conventions and trade shows
•
Sales contests
Public Relations
Public relations involves building good relations with the
company’s various publics by obtaining favorable publicity,
building up a good corporate image, and handling or
Heading off unfavorable rumors, stories, and events
Publicity involves the dissemination of messages through
third party media, such as magazines, newspapers or news
programmes.
Public relations is used to promote product, people, ideas,
and activities
Public Relations : Publics
Publics consist of the following
• Customer Groups
• Opinion Leaders and formers
• Local and central government
• Investors/shareholders
• The media
• Current and potential employees
• Trade unions
• Local community
• Suppliers
Public Relations Objectives
• To create/maintain corporate/brand image
• To raise an organisation’s profile (position and
standing in public)
• To enhance the perception of an organisation
• To disseminate information
• To overcome poor publicity
• To communicate the organisation’s ethos or
philosophy or corporate values.
• To manage crisis
• To guide and disseminate internally
organizational change initiative
Public Relations : Elements of
Corporate Identity
Corporate personality
• Culture (values, beliefs,
Strategic process
• Way company carries is
business
•Overall strategic
Purpose
NB: What an
organisation actual is
Corporate identity
• Formation of cues by
which stakeholders can
recognize the organisation
•Products & services
•Where made and
distributed
•How it communicates
with stakeholders
•How it behaves
•NB: How organisation
presents itself to
Corporate image
•Influenced by
identity
•Values, beliefs
and attitudes held
about the
Organisation
NB: What
stakeholders
perceive an
organisation to be
Public Relations: Factors Affecting Corporate Image
Image Destroying
Activities
Discrimination
Harassment
Pollution
Misleading communications
Deceptive communications
Offensive communications
Image Building
Activities
o
o
o
o
Empowerment of employees
Charitable contributions
Sponsoring local events
Selling environmentally safe
products
o Outplacement programs
o Support community events
Typical PR Techniques
•
•
•
•
•
•
•
•
Press releases
Press conferences
Publications
Media relations
Investor Relations
Events
Annual reports
Lobbying: presentation of papers to
parliament or government
• Private public sector partnership
Personal Selling
Interpersonal communication tool which
involves face-to-face activities
undertaken by individuals, often
representing an organisation, in order to
inform, persuade or remind an individual
or group to take appropriate actions
Personal Selling
• Involves face to face dialogue
• Gives flexibility of message
• Immediate feedback gained
• Very useful in business to business
markets
• Very useful when products and
services are complex
Personal Selling: Sales Force Objectives
• To increase sales turnover
• To reduce the number of clients under certain order
levels
• To reduce cost of sales
• To increase the number of distribution outlets
Tasks of Personal Selling
•
•
•
•
•
•
•
•
Orders : Getting or Taking
Prospecting
Communicating
Selling
Market Research and Information gathering
Servicing Account
Allocating
Customer relationship
The Personal Selling Process
•
•
•
•
•
•
•
•
Prospecting for customers
Qualifying prospects
Developing the relationship
Presenting the sales message
Handling queries and objections
Closing the sales
Providing the service and support
Developing the relationship and maintaining
commitment
Personal Selling
•
•
•
•
•
•
Set objectives
Know the customer
Know your product and service
Planning saves time
Develop a system
Good Presentation : Ask Questions, learn to listen,
uncover needs primary/secondary, address concerns,
position yourself properly, present ultimate benefits,
close sale
Support for Sales Force
•
•
•
•
•
•
•
•
Provide Information : product knowledge
Potential Lead
Client History
Financial Report
Promotional Materials
Sales Aids e.g. samples
Promotion plans
Brand Performance : e.g. numeric distribution,
shares etc.
Personal Selling
Personal selling is the most expensive element
of the marketing communication mix
• It is resource intensive
• It is time ineffective
• It incurs high contact costs
Direct Marketing
• Direct Marketing is a strategy used to create
personal and intermediary free dialogue with
customers
• It is an interactive system which uses one or
more advertising media to effect a measurable
response at a location
e.g. Direct Mail, mail order, Telephone sales, direct
response advertising
Direct Marketing
• Disseminate information
• Generate sales leads
• Increase repeat orders
• Build a relationship
Direct Marketing
• Used to create a personal dialogue with customers and
stakeholders (not through an intermediary)
• Breakthrough ad clutter
• Better Targeting to reduce waste
• Widely used
• Technology enabled
Direct Mail
• Direct Mail refers to personally addressed
advertising that is delivered through postal
system.
• It can be personalised and target with great
accuracy and its results are capable or precise
measurement
Telemarketing
This is approaching customers or prospects through the phone.
The scope
• To generate sales leads
• To screen leads prior to following up
• To arrange appointments for sales representatives
• To direct sales
• To encourage cross/upward selling
• To provide dealer support
• To manage and service accounts
• To undertake market research
• To undertake test marketing
Direct Response Advertising
• It is another form of direct marketing and
appears in the standard broadcast and
standard print media.
• Different from other forms of advertising as it
actually demands a response by giving a
website address, telephone number or
coupon for personal visit.
E-Media
• Internet can provide on-line versions
of other promotional tools
• Good for providing information
• Cost-effective
• Can be good at prompting immediate
action
Criteria for the review of promotional
tools
• Communications
Ability to reach out large audience, or interaction or
personal feedback
• Costs (Financial Resources) : This the cost involved in
sending a message to target audience.
• Control : Intended message is transmitted and
received by the target audience.
• Credibility : Borders on the objectivity of the
message
Characteristics of promotional tools Communications
Advertising
Sales
Promotion
Public
Relations
Personal
Selling
Direct
Marketing
Ability to deliver a
personal message
Low
Low
Low
High
High
Ability to reach a
large audience
High
Medium Medium Low
Mediu
m
Level of interaction
Low
Low
High
Credibility given
Low
Medium High
by target audience
Low
High
Medium Mediu
m
Characteristics of promotional tools Costs
Advertising
Sales
Promotion
Public
Relations
Personal
Selling
Direct
Marketing
Absolute costs
High
Medium
Low
High
Medium
Cost per contact
Low
Medium
Low
High
High
Wastage
High
Medium
High
Low
Low
Size of Investment
High
Medium
Low
High
Medium
Characteristics of promotional tools Control
Advertising
Sales
Promotion
Public
Relations
Personal
Selling
Direct
Marketing
Ability to target
particular audience
Medium High
Low
Medium High
Management’s
ability to adjust the
deployment of the
tool as
circumstances
change
Medium High
Low
Medium High
Communication Strategies
•
To accomplish promotional objectives,
strategies are needed to meet goals that
have been set. There are 3 broad strategies
namely
1. Pull Strategy
2. Push Strategy
3. Profile Strategy
Communication Strategies: Pull, Push
and Profile communications
• Pull – aims to encourage customers to ‘pull’
products through the channel
• Push – aims to communicate with members of
the channel to encourage them to ‘push’
products through the channel
• Profile – aims to develop corporate reputation
and image
Communication Strategies: Pull
Strategy
• A pull strategy is a marketing communications approach
which involves the delivery of messages to members of the
target audiences/consumers (Final Consumer)
• The aim is to stimulate demand by encouraging consumers
to “pull” products through the channel network
• This usually means consumers go into retail outlets or
shops to enquire about particular products
Pull Strategy
Pull Strategies can be used to achieve any of the
following goals:
1. Inform about a new product or raise levels of
awareness of an existing product.
2. Persuade a target audience to try a product or take
part in a sales promotion
3. Build or reinforce attitudes
4. Differentiate a brand from its competitors
5. Remind lapsed customers of brand values
Push Strategy
• A push strategy is a marketing communications
approach which involves communication with
members of the marketing channel networks. This is
vital to make products available to end users or
consumers.
• This strategy is designed to facilitate resale to other
members of network and contribute to achievement
of their own objectives.
• It is essentially aimed at “pushing” the product down
through the channel towards the end-users
Push Strategy
The purpose of push strategy is to achieve the following amongst
intermediaries:
1. To help distributors/retailers understand the attributes and
benefits of each products
2. Persuade intermediaries to take stock, provide facilities (e.g.
shelf space) and preference over other suppliers
3. Build long term relationship with intermediaries
4. Get intermediaries to become advocates of the products
5. Differentiation so that intermediaries can understand how a
product offering is positioned.
6. Provide coordination, the exercise of power and
encouragement of loyalty and commitment, so as to reduce
likelihood of tension
Profile Strategy
• Corporate communication is a communication where the
organisation itself or its identity is the focus of the
campaign rather than the product or service or other
offerings. It is the organisation and its role in context of a
particular stakeholders activities that is important
• The awareness, perception and attitudes held by
stakeholders towards an organisation needs to be
understood, shaped and acted upon. This can be
accomplished through continual dialogue, which can lead
to the development of trust and commitment and enable
relationships to grow. This is necessary in order that
stakeholders think and act favourably towards an
organisation and enable the organisation develop strategies
that are compatible with the environment and its own
objectives
Profile Strategy
• Profile Strategy provides stakeholders such as
investors and employees with information about the
organisation rather than products/services that
enables them to perceive and position an
organisation in a desired corporate image
• They are used to convey information about its
performance and policies to encourage investors
and/or attract employees
• They can also be used to provide consistent
messages to internal audiences.
• An organisation’s corporate communications are
bound by its identity.
Media Department Functions
Plan and buy – time and space in appropriate media vehicles
Task of the media planner: Deliver advertising messages through
a selection of media which match the viewing and/or reading
habits of the target audience at the lowest possible cost.
Selection: refers to the choice of media vehicles to carry the
message on behalf of the advertiser
Scheduling: Refers to the number of occasions, timing and
duration that a message is exposed in the selected vehicles to
the target audience.
Types of media available
• Broadcast - TV & Radio
• Print - Newspapers & Magazines
• Outdoor - Billboards & Transit
• New Media- CD-ROM, Internet, Website, SMS,
mobile phone etc
• In-Store - POP & packaging
• Other - Cinema, product placement,
• Exhibitions, etc
Television
Advantages:
• Reaches large audiences
• Visual and audio capabilities
• Maximum flexibility for gaining attention
• Short lead time to place ad.
Television
Disadvantages:
• Not easy to target selected audiences.
• Relatively expensive.
• Requires production specialists.
• Short exposure time.
Magazine
Advantages
• Reaches demographic and geographic segments.
• High Quality reproduction.
• Ad lasts as long as magazine is kept and
read.
• Ad benefits from magazine’s credibility.
Magazine
Disadvantages
• Must place ad well in advance of publication.
• Limited flexibility to gain attention.
• No complete control of location of ad in a in
magazine
Newspaper
Advantages
• Reaches large audience.
• Segments audiences by local, regional and
national.
• Short lead time to place ad.
• Credibility of newspaper can benefit ad.
Newspaper
• Disadvantages
• May be expensive.
• Little flexibility for creative messages.
• Limited reproduction quality (e.g. Use of
colour).
• Short life of newspaper carries over to ad.
Outdoor
Advantages
• Relatively inexpensive?
• Many repeat exposures for one appearance
Disadvantages
• Only a very limited message is possible.
• Cannot segment audience
• Very short exposure time..
Radio
Advantages
•
•
•
•
Audio capabilities.
Relatively low costs.
Short lead time to place ad.
Segments audiences demographically and
geographically.
• Reaches large audiences.
Radio
Disadvantages
• No visual capabilities.
• Short exposure time.
• Little flexibility to gain attention?
How Do You Decide Which
Media To Use?
• Audience Size
If you want to advertise nationally, exclude
regional newspapers, etc.
If you are testing, a regional test can be the
best way.
• Audience Type
What is your target market?
Would you advertise Mmaa Nkomo on Atlantis
FM?
How Do You Decide Which
Media To Use?
• Audience State Of Mind
Can ‘Drive To Work’ Radio deliver a complicated
message?
• Budget
What is the cost of promotion?
Is there a minimum cost of space?
What is the cost per thousand?
• Message Objective
Is colour/ sound needed?
Do you want to demonstrate the product?
Is there a lot of technical detail?
How Do You Decide Which
Media To Use?
• Is there a need for urgency?
Is the media compatible?
Would Rolls Royce and Mercedes Benz
advertise in the P & P ?
• Ease of buying
Lead times for space and production can impact?
Are your competitors using the same media?
Factors responsible for the emergency
of New Media
•
•
•
•
•
•
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Changing dynamics: demographics & life style
Increasing competition
Customer power
Fragmentation of the media
Increasing cost of media
Emerging distribution channel
New technologies
The Marketing Communication Budget
•
•
•
•
Who decides the budget?
When is it set?
How is the decision reached?
Special cases for expenditure
The Marketing Communications Budget
• Percentage of
previous year’s sales
• Desired share of voice
• Percentage of
anticipated turnover
• Media Inflation
• Competitive-Parity
Method
•
•
•
•
Objective & task
Affordable Method
New products
Residue of last year’s
surplus