THE 4PS - PROMOTION What is promotion?

Promotion is the function of informing, persuading and influencing the consumers purchase decision. It is any form of communication used to inform, persuade & remind people & organizations goals, goods, services, image, community involvement or impact on society. The Strategic role of Promotion Create or increase awareness - Management may need to make their audience aware that their product exists, and to explain exactly what it does. This is a particularly important objective for new products Create interest Motivating purchasing action (induce behaviour) Create, enhance & restore corporate image Encourage brand loyalty & discourage brand switching Educate consumers & other stakeholders Inform consumers & other stakeholders about products, prices, courses of action, changes & community activities Positioning & influence attitudes

The basic role of promotion is to COMMUNICATE Modern marketing calls for more than developing a good product, pricing it attractively, and making it accessible. Companies must also communicate with present and potential stakeholders as well as the general public. For most companies, the question is not whether to communicate but rather what to say, to whom, and how often. Integrated marketing communications Successful marketers use the marketing concept and relationship marketing to develop customer-oriented marketing programs. The customer is at the heart of IMCs. An IMC begins not with the organisations goods and services but with consumer wants or needs and then works in reverse to the product, brand, or organisation. It sends receiver focused, rather than product focused messages. Integrated Marketing Communications is a simple concept. It ensures that all forms of communications and messages are carefully linked together.
1

At its most basic level, Integrated Marketing Communications, or IMC, as we'll call it, means integrating all the promotional tools, so that they work together in harmony. Promotion is one of the Ps in the marketing mix. Promotion has its own mix of communications tools. All of these communications tools work better if they work together in harmony rather than in isolation. Their sum is greater than their parts - providing they speak consistently with one voice all the time, every time. This is enhanced when integration goes beyond just the basic communications tools. There are other levels of integration such as Horizontal, Vertical, Internal, External and Data integration. Here is how they help to strengthen Integrated Communications. Horizontal Integration occurs across the marketing mix and across business functions - for example, production, finance, distribution and communications should work together and be conscious that their decisions and actions send messages to customers. While different departments such as sales, direct mail and advertising can help each other through Data Integration. This requires a marketing information system which collects and shares relevant data across different departments. Vertical Integration means marketing and communications objectives must support the higher level corporate objectives and corporate missions. Meanwhile Internal Integration requires internal marketing - keeping all staff informed and motivated about any new developments from new advertisements, to new corporate identities, new service standards, new strategic partners and so on. External Integration, on the other hand, requires external partners such as advertising and PR agencies to work closely together to deliver a single seamless solution - a cohesive message - an integrated message. Benefits of IMC Although Integrated Marketing Communications requires a lot of effort it delivers many benefits. It can create competitive advantage, boost sales and profits, while saving money, time and stress. IMC wraps communications around customers and helps them move through the various stages of the buying process. The organisation simultaneously consolidates its image, develops a dialogue and nurtures its relationship with customers.

This 'Relationship Marketing' cements a bond of loyalty with customers which can protect them from the inevitable onslaught of competition. The ability to keep a customer for life is a powerful competitive advantage. IMC also increases profits through increased effectiveness. At 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' of over five hundred commercial messages which bombard customers each and every day. At another level, initial research suggests that images shared in advertising and direct mail boost both advertising awareness and mail shot 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, to make a purchase Carefully linked messages also help buyers by giving timely reminders, updated information and special offers which, when presented in a planned sequence, help them move comfortably through the stages of their buying process... and this reduces their 'misery of choice' in a complex and busy world. IMC also makes messages more consistent and therefore more credible. This reduces risk in the mind of the buyer which, in turn, shortens the search process and helps to dictate the outcome of brand comparisons. Un-integrated communications send disjointed messages which dilute the impact of the message. This may also confuse, frustrate and arouse anxiety in customers. On the other hand, 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 bring all the agencies together - for briefings, creative sessions, tactical or strategic planning. This reduces workload and subsequent stress levels - one of the many benefits of IMC. Barriers to IMC Despite its many benefits, Integrated Marketing Communications, or 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 which restrict IMC. These include: Functional Silos; Stifled Creativity; Time Scale Conflicts and a lack of Management know-how. Take functional silos. Rigid organisational structures are infested with managers who protect both their budgets and their power base. Sadly, some organisational 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 promotion people and so on. Imagine what can happen when sales reps are not told about a new promotional offer! And all of this can be aggravated by turf wars or internal power battles where specific managers resist having some of their decisions (and budgets) determined or even influenced by someone from 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 not 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 time scales into a creative brief and you'll 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. However the two objectives can be accommodated within an overall IMC if carefully planned. But this kind of planning is not common. A survey in 1995, revealed that most managers lack expertise in IMC. But its not just managers, but also agencies. 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 of commitment. Golden Rules Despite the many benefits of Integrated Marketing Communications (or IMC); there are also many barriers. Here's how you can ensure you become integrated and stay integrated - 10 Golden Rules of Integration.
4

(1) Get Senior Management Support for the initiative by ensuring they understand the benefits of IMC. (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, Sales Promotions staff are integrating their messages. To do this you must have carefully planned internal communications, 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, type faces, colours and so on. (4) Focus on a clear marketing communications strategy. Have crystal clear communications objectives; clear positioning statements. Link core values into every communication. Ensure all communications add value to (instead of dilute) the brand or organisation. Exploit areas of sustainable competitive advantage. (5) Start with a Zero Budget. Start from scratch. Build a new communications plan. Specify what you need to do in order to achieve your objectives. In reality, the budget you get is often less than you ideally need, so you may have to prioritise communications activities accordingly. (6) Think Customers First. Wrap communications around the customer's buying process. Identify the stages they go through before, during and after a purchase. Select communication tools which are right for each stage. Develop a sequence of communications activities which help the customer to move easily through each stage. (7) Build Relationships and Brand Values. All communications should help to develop stronger and stronger relationships with customers. Ask how each communication tool helps to do this. Remember: customer retention is as important as customer acquisition. (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, collect and share vital information. (9) Share Artwork and Other Media. Consider how, say, advertising imagery can be used in mail shots, exhibition stands, Christmas cards, news releases and web sites. (10) Be prepared to change it all. Learn from experience. Constantly search for the optimum communications mix. Test. Test. Test. Improve each year. 'Kaizen'.

How do we communicate? How do customers process information?

Communication is a process of exchanging verbal and non verbal messages. It is a continuous process. Pre-requisite of communication is a message. This message must be conveyed through some medium to the recipient. It is essential that this message must be understood by the recipient in same terms as intended by the sender. He must respond within a time frame. Thus, communication is a two way process and is incomplete without a feedback from the recipient to the sender on how well the message is understood by him. The main components of communication process are as follows: 1. Context - Communication is affected by the context in which it takes place. This context may be physical, social, chronological or cultural. Every communication proceeds with context. The sender chooses the message to communicate within a context.
6

2. Sender / Encoder - Sender / Encoder is a person who sends the message. A sender makes use of symbols (words or graphic or visual aids) to convey the message and produce the required response. For instance a training manager conducting training for new batch of employees. Sender may be an individual or a group or an organization. The views, background, approach, skills, competencies, and knowledge of the sender have a great impact on the message. The verbal and non verbal symbols chosen are essential in ascertaining interpretation of the message by the recipient in the same terms as intended by the sender. 3. Message - Message is a key idea that the sender wants to communicate. It is a sign that elicits the response of recipient. Communication process begins with deciding about the message to be conveyed. It must be ensured that the main objective of the message is clear. 4. Medium - Medium is a means used to exchange / transmit the message. The sender must choose an appropriate medium for transmitting the message else the message might not be conveyed to the desired recipients. The choice of appropriate medium of communication is essential for making the message effective and correctly interpreted by the recipient. This choice of communication medium varies depending upon the features of communication. For instance - Written medium is chosen when a message has to be conveyed to a small group of people, while an oral medium is chosen when spontaneous feedback is required from the recipient as misunderstandings are cleared then and there. 5. Recipient / Decoder - Recipient / Decoder is a person for whom the message is intended / aimed / targeted. The degree to which the decoder understands the message is dependent upon various factors such as knowledge of recipient, their responsiveness to the message, and the reliance of encoder on decoder. 6. Feedback - Feedback is the main component of communication process as it permits the sender to analyze the efficacy of the message. It helps the sender in confirming the correct interpretation of message by the decoder. Feedback may be verbal (through words) or non-verbal (in form of smiles, sighs, etc.). It may take written form also in form of memos, reports, etc. 7. Noise - In the United States, the 0 sign made with the thump and the first finger means okay. However, in the Mediterranean countries, it means zero or the worst. A Tunisian interprets the same sign as lll kill you, and to Japanese it means money. Also, a bar is a pub in Britain, hotel in Australia and a boozer in New Zealand.

Faulty communications can be especially risky on a global level, where noise can lead to some interesting misinterpretations. Here are two resent international examples: Form a Japanese information booklet about using a hotel air conditioner : Cooles and Heates: If you want just condition of warm in your room, please control yourself. In an Acapulco hotel: The manager has personally passed all the water served here. An effective message accomplishes three tasks: 1. It gains the receivers attention 2. It achieves understanding by both the receiver and the sender 3. It stimulates the receivers needs and suggests an appropriate method of satisfying them. The above three tasks are related to the AIDA concept (attention-interestdesire-action) proposed by E.K. Strong.

Get Attention, hold Interest, arouse Desire, and then obtain Action.

First the promotional message must gain the potential customers attention. It then seeks to arouse interest in the good or service. At the next stage, it stimulates desire by convincing the would-be buyer of the products ability to satisfy his or her needs. Finally the sales presentation, advertisement, or sales promotion technique attempts to produce action in the form of a purchase or a more favourable attitude that may lead to future purchases.

THE PROMOTION MIX

A. ADVERTISING Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertisers include not only
9

business firms but also museums, charitable organizations, and government agencies that direct messages to target publics. In developing an advertising program, successful firms start by identifying the target market and buyer motives. Then they can make five critical decisions, known as the five Ms: Mission: What are the advertising objectives? Money: How much can be spent? Message: What message should be sent? Media: What media should be used? Measurement: How should the results be evaluated? Setting the Advertising Objectives Advertising objectives can be classified according to whether their aim is to inform, persuade, or remind. Informative advertising figures heavily in the pioneering stage of a product category, where the objective is to build primary demand. Thus, DVD makers initially had to inform consumers of the benefits of this technology. Persuasive advertising becomes important in the competitive stage, where the objective is to build selective demand for a particular brand. Some persuasive advertising is comparative advertising, which explicitly compares two or more brands. Reminder advertising is important with mature products. Coca-Cola ads are primarily intended to remind people to purchase Coca-Cola. A related form of advertising is reinforcement advertising, which seeks to assure current purchasers that they have made the right choice. Automobile ads often depict satisfied customers enjoying special features of their new car. The advertising objective should emerge from a thorough analysis of the current marketing situation. If the product class is mature, the company is the market leader, and brand usage is low, the proper objective should be to stimulate more usage. If the product class is new, the company is not the market leader, but the brand is superior to the leader, then the proper objective is to convince the market of the brands superiority. Deciding on the Advertising Budget Management should consider these five factors when setting the advertising budget:

10

1. Product life cycle stage: New products typically receive large budgets to build awareness and to gain consumer trial. Established brands usually are supported with lower budgets as a ratio to sales. 2. Market share and consumer base: High-market-share brands usually require less advertising expenditure as a percentage of sales to maintain their share. 3. Competition and clutter: In a market with a large number of competitors and high advertising spending, a brand must advertise more heavily to be heard. 4. Advertising frequency: The number of repetitions needed to put across the brands message to consumers has an important impact on the advertising budget. 5. Product substitutability: Brands in a commodity class (cigarettes, beer, soft drinks) require heavy advertising to establish a differential image. Choosing the Advertising Message Advertising campaigns vary in their creativity. The actual words in an ad must be memorable and attention-getting to make an impression on the audience. Advertisers and their agencies must be sure their creative advertising does not overstep social and legal norms. Developing Media Strategies After choosing the message, the next task is to choose media to carry it. Medium Advantages /Limitations Newspapers Flexibility timeliness good local market coverage broad acceptance high believability Short life poor reproduction quality small pass-along audience Television high attention Combines sight, sound, and motion appealing to the senses high reach High absolute cost high clutter fleeting exposure less audience selectivity Direct mail Audience selectivity flexibility no ad competition within the same medium personalization Relatively high cost junk mail image Radio cost Mass use, high geographic and demographic selectivity, low

Audio presentation only lower attention than television onstandardized rate structures fleeting exposure

11

Magazines prestige, highreadership

High geographic and demographic selectivity credibility and quality reproduction long life good pass-along

Long ad purchase lead time some waste circulation no guarantee of position Outdoor Flexibility high repeat exposure low cost low competition Limited audience selectivity, creative limitations Excellent local coverage, high believability, wide reach, High competition, long ad purchase lead time, creative limitations Newsletters Very high opportunities, relative low costs selectivity, full control, interactive

Yellow Pages low cost

Costs could run away Brochures Flexibility, full control, can dramatize messages Overproduction could lead to runaway costs Many users, opportunity to give a personal touch. Relative high cost High selectivity, interactive possibilities relatively low Relatively new media with a low number of users in some

Telephone

Internet countries

Evaluating Advertising Effectiveness Good planning and control of advertising depend on measures of advertising effectiveness. Advertisers should try to measure the communication effect of an adthat is, its potential effect on awareness, knowledge, or preferenceas well as the ads sales effect.

B. SALES-PROMOTION Sales promotion is a mass communication technique that offers short-term incentives to encourage purchase or sales of a product or service. Rapid growth in the industry has been achieved because: Product managers are facing more pressure to increase their current sales,
12

Companies face more competition, Advertising efficiency has declined, Consumers have become more deal oriented.

Sales promotion consists of a diverse collection of incentive tools, mostly short term, designed to stimulate trial, or quicker or greater purchase, of particular products or services by consumers or the trade. Whereas advertising offers a reason to buy, sales promotion offers an incentive to buy. Sales promotion includes tools for: Consumer promotion (samples, coupons, cash refund offers, prices off, premiums, prizes, patronage rewards, free trials, warranties, point-of-purchase displays, and demonstrations); Trade promotion (prices off, advertising and display allowances, and free goods), and Business and sales force promotion (trade shows and conventions and contests for sales reps). Objectives of Sales Promotion to attract new triers, to reward loyal customers, and to increase the repurchase rates of occasional users.

Major Consumer-Promotion Tools Samples: Coupons: Offer of a free amount of a product or service. Certificates offering a stated purchase of a specific product. saving on the

Cash Refund Offers (rebates):

Provide a price reduction after purchase

Price packs (cents-off deals): Promoted on the package or label, these offer savings off the products regular price. Premiums (gifts): Merchandise offered at low or no cost as an incentive to buy a particular product.

Prizes (contests, games): Prizes offer consumers the chance to win cash, trips, or merchandise as a result of purchasing something.
13

Patronage Awards:

Values in cash or points patronage of a certain seller.

given

to

reward

Free Trials:

Inviting prospects to try the product free in the hope that they will buy the product. Explicit or implicit promises by sellers that the product will perform as specified or that the seller will fix it or refund the customers money during a specified period. Two or more brands or companies team up on coupons, refunds, and contests to increase pulling power. Using one brand noncompeting brand. to advertise another

Product Warranties:

Tie-in Promotions:

Cross-Promotions:

Point-of-Purchase (POP) Displays and Demonstrations: Displays and demonstrations that take place at the point of purchase or sale. Major Trade-Promotion Tools Price-Off (off-invoice or off-list): A straight discount off the list price on each case purchased during a stated time period. The offer encourages dealers to buy a quantity or carry a new item that they might not ordinarily buy. Allowance: An amount offered in return for the retailers agreeing to feature the manufacturers products in some way. An advertising allowance compensates retailers for advertising the manufacturers product. A display allowance compensates them for carrying a special product display. Free Goods: Offers of extra cases of merchandise to intermediaries who buy a certain quantity or who feature a certain flavor or size. Manufacturers might offer push money or free specialty advertising items to retailers that carry the companys name.

Major Business and Sales Force Promotion Tools

Trade Shows and Conventions: Industry associations organize annual trade shows and conventions where firms selling products and services to this industry buy space and set up booths and displays to demonstrate their products. Participating vendors expect several benefits, including generating new sales leads, maintaining customer contacts, introducing new products, meeting new customers, selling more to present customers, and educating customers with publications, videos, and other audiovisual materials. Sales Contests: A sales contest aims at inducing the sales force or dealers to increase sales over a stated period, with prizes going to those who succeed. Incentives work best when they are tied to measurable and achievable sales objectives (such as finding new accounts or reviving old accounts) for which employees feel they have an equal chance. Specialty Advertising: Specialty advertising consists of useful, low-cost items (such as calendars) bearing the companys name and address, and sometimes an advertising message that salespeople give to prospects and customers. Disadvantages of sales promotion Tends to produce only fleeting interest in products and does not show any lasting effect (which is why companies keep changing their sales promotional strategies). If kept on for too long, the customer becomes bored with the campaign. Might result in a special offer price having to be reset as a new standard. Can lead to disloyalty on the part of customers if too many promotions are on offer (they will shop around for the best offer, rather than the product). They are very expensive to run and this increase costs and, consequently, prices to the customer, which means the organization suffers in the end by reduced prices.

C. PUBLIC RELATIONS Not only must the company relate constructively to customers, suppliers, and dealers, but it must also relate to a large number of interested publics. A public is any group that has an actual or potential interest in or impact on a companys ability to achieve its objectives. PR is building good relations with the companys various publics by obtaining favorable publicity, building up a good corporate image and handling or heading off unfavorable rumors, stories and events.
15

Public relations (PR) involves a variety of programs that are designed to promote or protect a companys image or its individual products. PR departments typically perform five functions: (1) Press relations (presenting news and information about the organization in the most positive light); (2) Product publicity (publicizing specific products); (3) Corporate communication (promoting understanding of the organization through internal and external communications); (4) Lobbying (dealing with legislators and government officials to promote or defeat legislation and regulation); and (5) Counseling (advising management about public issues and company positions and imageand advising in the event of a mishap. Major Tools in Marketing PR Publications: Companies rely extensively on published materials to reach and influence target markets, including annual reports, brochures, articles, printed and on-line newsletters and magazines. Events: Companies can draw attention to new products or other company activities by arranging special events like news conferences, on-line chats, seminars, exhibits, contests and competitions, and sport and cultural sponsorships that will reach the target publics. News: One of the major tasks of PR professionals is to find or create favorable news about the company, its products, and its people. The next stepgetting the media to accept press releases and attend press conferencescalls for marketing and interpersonal skills. Speeches: Speeches are another tool for creating product and company publicity and building the companys image. Public-Service Activities: Companies can build goodwill by contributing money and time to good causes. Identity Media: To attract attention and spark recognition, the firms visual identity is carried by its logos, stationery, brochures, signs, business forms, business cards, Web site, buildings, uniforms, and dress codes. A. PERSONAL SELLING AND DIRECT MA B. GRKETIN
16