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PRINCIPLES OF MARKETING-A2 Topics 09-10 Promotion: 1. Marketing Communication Theory 2. Marketing Promotional Tools Assoc. Prof. A. Popissakov 2009-2010 5/23/2017 1 Topic Contents Communication Theory 1. The Communication Process 2. The Promotional Mix 3. Communication Planning Model – Communication objectives – Communication strategies 4. Models of Marketing Involvement 5/23/2017 2 Some Communication problems in society = government do things right, people do not believe. in business = poor communication costs money, time and opportunities. in family = the gap between generations, in school = clever teacher vs. lazy and stupid students in university = ignorance vs. proper academic scholarship (The “P” word), in love = “I love you more than you do”.etc. 5/23/2017 3 Six Questions in Communication Process (“6 Qs”) Who? What? Why? Where? When? How? Whatever communication task you are undertaking, asking these six simple questions before you start will give your communication a better chance of success and make the task easier E.g. What is your name? 5/23/2017 4 2. The Communication Process Sender Who? Ideation What? N o Action Do?Not do? 5/23/2017 Analyzing What? Encoding How? i s Media channels Where/When e Decoding How? Receiver Who? 5 “6 Qs” - Who? Who? - The Sender and Receiver Sender is me. Who exactly is the receiver, my audience? What sort of person is he? Personality? Education? Age? Status? Social status? Nationality? .... How is he likely to react to my message? What does he know already about the subject of my message? A lot? Not much? Nothing? 5/23/2017 Less/more than I do?, etc. 6 “6 Qs” - What? What? = subject = Ideation What exactly do I want to say? What do I need to say? What does he need to know? What information can I omit? What information must I include? 5/23/2017 7 “6 Qs” - How? Encoding/Decoding How? = Encoding/Decoding The process of organizing the ideas into series of symbols, words, gestures, specially designed to communicate with particular receiver. How am I going to communicate my message? With words? Or pictures? Or both? Which words? Which pictures? How the receiver will decoded what I have encoded in my massage? 5/23/2017 8 “6 CQs” - How? Encoding/Decoding E.g. Student (encoding massage) to Teacher: I am late with my report, but I shell submit it on Friday. Teacher(decoding massage from Student) This guy is lazy and arrogant (not responsible, violation of due date, just informing, no appology). 5/23/2017 9 “6 CQs” - How? Encoding/Decoding Student (encoding): I am ready with my report, but my dog ate it just before my leaving for school. Will you give me a chance to rewrite it and submit on Friday. Teacher(decoding): This story may be true or not, but this guy seems courteous, let give him a chance. 5/23/2017 10 “6 Qs” - Where? When? Where? When? = (place and context) Where will he be when he receives my message? At what point in the total matter does my message come? Am I replying to something he has raised? Or will my message represent the first he has heard about this topic/problem/issue? Is the subject of my message the cause of controversy between us? Is the atmosphere strained or cordial? 5/23/2017 11 “6 CQs” - Feedback Feedback occurs when the receiver send the message back to the sender. It restarts the communication process. The receiver becomes the sender by beginning with IDEATION, ENCODING and so on. If sending the original message results in two-way communication this process can go though many cycles. 5/23/2017 12 Marketing Communication Gap Communication process An equation can be developed, What do we want our customers to know - What they already know ------------------------------------------------------= Gap (to be filled by communication) What if the “Gap” > 0 or < 0? 5/23/2017 13 The Promotional “P” Promotion is WHAT and HOW marketers communicate with their target markets. I make bicycles “Nike” is the brand name Price from $100-$500 Unisex product Quality is higher than price Find them in Metro, Billa … 10% Christmas sale etc. …….. 5/23/2017 Promotional Communication messages 14 The promotional mix The direct way in which organisations attempt to communicate with various target audiences. It consists of five main elements 5/23/2017 15 Changing promotional mix for consumer or B2B markets PR Direct marketing Sales promotion Advertising PR Direct marketing Sales promotion PR Direct marketing Sales promotion Advertising Personal selling Capital equipments Personal selling Raw materials Services B2B goods Home improvements 5/23/2017 Advertising Personal selling Consumables Consumer goods Cars White goods Brown goods Cloths FMCG 16 Communications Planning Model (CPM) Initial step (3 in 1) 5/23/2017 18 (CPM) Situation Analysis (1): The Target Market Knowledge of the target market is an essential prerequisite for communication strategy. Who are our customers? Are they – defindable? reachable? sizable?… B2B or consumer market? E.g. B2B markets depend on personal selling, while for consumer markets advertising and promotions dominate. 5/23/2017 19 (CPM) Situation Analysis (1): Push or pull strategy Flow of product 5/23/2017 Flow of infomation 20 (CPM) Situation Analysis (2): The Product How the promotional mix is affected by the type of product and the product life cycle. Type of product B2B and consumer goods It is simplistic to believe that personal selling is effective only for B2B products, while all consumer goods require advertising. Both types of product can benefit from any of the various elements of the promotional mix. 5/23/2017 21 (CPM) Situation Analysis (2): The PLC Product life cycle The product life cycle stages Introduction Growth Mature Decline Since marketing objectives change as a product matures, the communication objectives and messages also change. 5/23/2017 22 (CPM) Situation Analysis (3): The Environment Key environmental factors affect communication strategies Social and cultural acceptance of product/services. Customer's changing attitudes and lifestyle, (danger of stereotyping through mass communication efforts). Political and regulatory environment Competitors etc. STEP Analysis 5/23/2017 23 Communications Planning Model (CPM) (continued) Situation analysis 1,2,3, help marketers to set the background influences of the CPM. Further Steps in the CPM Define the Objectives Divise Strategies Decide on Budgeting Implementation and Evaluation of CPM 5/23/2017 24 CPM Step 3. Communication Strategies THREE logical and sequential steps in marketing communication A. Informing B. Persuading C. Reinforcing These objectives must guide the customer from the stage of awareness to the real buying and postsales reassure. 5/23/2017 26 A. Informing Emitting relevant information about market product/services: they do exist what they do what are their features where can be obtained 5/23/2017 27 B. Persuading Creation of favourable attitude about market products/services: favour one brand (product) over the other favour one view point over the other create a feeling that this product is what you need. create a feeling that this product is your best choice. 5/23/2017 28 C. Reinforcing Building support/loyalty to a point of view of purchasing Ensuring a good climate for future sales. Transforming a buyer by chance user to a heavy user Motivation of customers to be your advertising assistants (Word-of-mouth) 5/23/2017 29 Models of Marketing Involvement Generally all models are based on Knowledge, Attitude and Behaviour Knowledge Information stage 5/23/2017 Atitude Behaviour Persuasion stage 30 Models of Marketing Involvement AIDA Model - Strong’s (1925) Knowledge Attention Get attention 5/23/2017 Atitude Interest Provoke interest Behaviour Desire Action Arose desire Buy / not buy 31 Models of Marketing Involvement Six stage Lavidge & Steiner Model Knowledge Awareness Knowledge Linking Atitude Preference Conviction Behaviour 5/23/2017 Purchasing 32 Models of Marketing Involvement DAGNAR Study of Russel Colley (a list of 50 possible advertising objectives) Knowledge Awareness Comprehension Atitude Conviction Behaviour Action Defining Advertising Goals for Measured Advertising Results 5/23/2017 33 CPM – Step 4 Budgeting (self actinity) Two main methods of budget setting: Judgemental budget setting: – Arbitrary budgets, – Affordable method, – Percentage of past sales method, – Percentage of future sales. Data-based budget setting: – Competitive parity, – Objective and task budgeting. 5/23/2017 Brassington and Pettit (2005) pp. 279-280 34 CPM – Step 5 Implementation of the Plan Planning helps marketers to: establish priorities, allocate responsibilities, ensure a fully integrated, consistent approach that maximises the benefits gained from all elements of the communication mix. 5/23/2017 35 CPM – Step 6 Evaluation of Plan The final check-list of whole planning model : What return on investment did we achieve? What increase in sales revenue and from where and why? What part of the “Communication GAP” did we filled? 5/23/2017 36 The End 5/23/2017 37