Promotion Management: Managing Non Personal

Dr. Smita Choudhary

Introduction Integrated marketing communication Communication development process Budget allocation decisions in marketing communications Introduction to advertising Fundamentals of sales promotion Basics of public relation

Introduction
A company must communicate the attributes of the product to the customers. If the company does not do so, even a good product with better distribution and affordable price will fail. Communication is defined as any act by which one person gives to or receives from another person information about that persons needs, desires, perceptions, knowledge, or affective states. Communication can be in the following forms
Intentional or unintentional Conventional or unconventional signals Linguistic or non-linguistic forms Spoken or other modes

Marketing communication is the process of providing the information to the consumers about the marketing mix either through personal channels (direct selling, direct marketing, etc.) or through non personal channels (advertising, sales promotion, etc.). Both personal and non personal channels comprise the marketing communication mix or promotion mix. Promotion mix: This is a mixture of advertising, sales promotion, public relation, personal selling and direct marketing. Advertising: It is a paid form of non personal presentation and promotion of ideas, goods, or services. For example print ads, radio, television, brochures, posters, banner ads, etc. Personal selling: It is the type of promotion mix that helps and follows up prospects to purchase a good or service through use of an oral presentation. For example sales presentations, sales meetings, sales training, etc.

Sales promotion: It is incentives designed to encourage the purchase or sale of a product, usually in short term. For example coupons, sweepstakes, contests, product samples, rebates, etc. Public relations: This is the form of non-paid non-personal encouragement of demand for a product, service, or business unit by providing important news or presentations about it in the media. For example newspaper and magazine articles/reports, TVs and radio presentations, charitable contributions, speeches, issue advertising and seminars. Direct marketing: It is direct interaction with the customers by using telephone, online mediums.

Learning Objectives
After studying this unit, you will be able to
1. 2. 3. 4. 5. Explain the importance of integrated marketing communication. Describe the stages involved in developing effective communication. Analyze budget allocation decisions in marketing communication. Understand the fundamentals of advertising and sales promotion. Discuss the role of public relation (PR) in marketing communication.

Integrated Marketing Communications

Integrated marketing communication is a planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time. ---- American Marketing Association Objectives of Integrated Marketing Communication (IMC) The objective of integrated marketing communication is to plan, develop, execute and evaluate communication with organizations stakeholders.

Reasons for the growth Communication (IMC)

of

Integrated

Marketing

The growth of innovative promotional tools and the need to integrate them. Specialized media channels for niche target customers. Growth of retailer dominated market and passing of control from manufacturer to the customer. Growth of data base marketing. Wider geographical coverage through internet. Higher accountability and performance linked compensation systems.

Communication Development Process

1. Preparing target customer profile

The first step towards effective marketing communication starts with indentifying the target customer for whom the communication is developed. At this stage the company prepares the target customer profile. For example target customer profile of Exide Industries is

Customer characteristics

Description

Type of customer
Income

Individual
Upper middle class and upper class. Print ( English magazines, dailies and journals) Salaried or business class. OEM of a car
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Media exposure
Occupation Need of the product

2. Identifying promotion objectives

Target customer profile gives information about the customers readiness to purchase the product. The customer may be in any of the six stages of hierarchy of effects. The six stages are awareness, knowledge, liking, preference, conviction and purchase. Every company wants to bring its customers to purchase stage. For this it uses different promotional programs. a) Awareness: Marketer creates new products but the awareness about these products is very low. The purpose of the advertisement is to create awareness about these new products. For example Reebok. b) Knowledge: At this stage, the target audience do not have complete knowledge of the product. Marketer explain the product and its advantages to the target customer. For example, Parry Neutraceuticals. c) Liking: With the help of promotion, knowledgeable audience is changed to likeable audience. Marketers use celebrities to create interest in the product. For example, Reid and Taylor used Amitabh Bachchan to highlight its product quality.
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d) Preference: It is creating differentiation in the market place to

differentiate a brand from rival brands. For example, Big Bazaar uses the tag line is se sasta aur acccha kahin nahi to attract the customers.

e) Conviction: Customers may have a preference over the product but is

not able to decide. In such a situation, marketer develops a message in such a way that the customer is able to decide. For example, Tata Indigo requests its customers to test drive the vehicle and experience the truth.

f)

Purchase: Sometimes customers have a strong wish to buy the product

but they cannot buy due to affordability or any other environmental factor. In this situation, marketer uses promotional schemes particularly reduced price schemes to attract the customer. Company also use communication programs for repeat purchasers and loyal customers.

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3. Designing a message
After deciding the communication objectives, the marketer tries to develop the right message which creates attention, interest, desire and action (AIDA) in the customer.
I. The AIDA Model Attention: The marketing communication should create attention towards the product. The customer has a need and the organization should provide solution from their communication. Interest: When the customer give enough attention to the communication, organization should encourage him/her to create interest. Desire: The interest created should be forced in the customer mind so that he develops a desire for the product. Action: Strong desires should be turned into action. For this the company should provide the advantages of purchasing of the product in their communication messages.

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II. Deciding the message content

Message content must have any one of the following appeals

Emotional appeal
Positive emotional appeal or negative emotional appeals are used to increase the purchasing activity of the customer. Positive emotions like love, pride, joy and humor are used in the message. The advertisements where attributes of positive emotions are used are
Makemytrip joy BMW fastest saloon car in the world Pride Fevicol Humor Wheel Love

The advertisements where attributes of Negative emotions are used are

ICICI Prudential Fear NIIT - If you are not studying at NIIT you are missing something guilt Rexona Deodorant Shame

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 Rational appeal
Rational appeal highlights the benefits of the products like quality, economy, value or performance. Some examples of advertisements where rational appeals are used are Dabur Amla Value appeal (Long hair) Lakme brilliance Quality products Reliance India Mobile Performance (Works even in flood situations) Reliance Infocom Like roti, kapda aur makaan, the mobile phone must come to me as a necessity and not as a luxury (Economy)

Moral appeal
These are commitments towards public health or environment or social responsibility. For example, Shell lubricants show its commitment towards environment in their advertisements.

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III. Message format It is how a message should look and encourage the interest of the audience. Constituents of message format
Characteristics 1. Headline Suitable media. Print, Outdoor, Online

2. Copy
3. Illustration 4. Color 5. Pictures 6. Message size 7. Shape 8. Words 9. Sounds 10. Voice

Print, TV, outdoor, online

Print, TV, Outdoor, online Print, TV, outdoor, online Print, Outdoor, online Print, TV, Outdoor Print, Outdoor, Online Print, TV, Product, Outdoor Radio, TV, Online, Outdoor Radio, TV, Online

11. Body language

12. Texture 13. Scent 14. Distinctive formats

TV, Online
Product, Print, Online Product Print, Online, Outdoor
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4. Selecting the channels for communication The company may use sales people, reference groups, blogs, RSS, webinar, online communities and social networking sites to promote their products. These media are known as personal communication channels. Word of mouth campaigns, buzz marketing and viral marketing are some examples of personal communication channels. a) Word of mouth communication: It is the personal communication between customers and their reference groups about the product. b) Buzz marketing: In this marketing technique organizations create opinion leaders (people whose opinion are wanted by others) and spread the product information to others. For example gmail and google. c) Viral marketing: It is the technique of using social networks on the internet to create the brand image. Communicators use mass media like print (Newspaper, magazine, journals), Broadcast (radio, television), Outdoor (hoardings, bill board posters) and online (e-mail, communities, groups, websites) to communicate the attributes of their product .
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5. Selecting the message source

Message communicated by celebrities and good sources are considered reliable by the target consumers. Companies use well known actors and actresses, cricket players, and even cartoon characters to promote their advertisements. Colgate Palmolive, a well known FMCG company used Indian Dental Associations (IDA) recommendation to promote their toothpaste. Rahul Dravid, Amitabh Bachan and Karishma Kapoor are used as sources for Reebok, Reid and Taylor, and Dabur Amla respectively. Companies should be very careful in selecting the sources. The product character must match with the source.

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6. Target customer feedback

The communicator collects the feedback on the promotion campaign to assess how many target customers are able to see, hear or read the message. This helps the communicator to understand how many target customers are able to recall the message. Feedback helps the communicator to understand how many customers purchased the product. Companies may also get suggestions from customers to improve the promotion campaign.

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Budget Allocation Decisions in Marketing Communications

The selection of media, number of insertions and message structure depend on the budget allotted to the communication program. Marketers decide the right budget for the communication program and how to allot this optimally. There are four methods to allocate budget for an advertisement or a promotional campaign. They are: 1. Affordable method 2. Percentage of sales method 3. Competition method 4. Objective and task method
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1.

2.

3.

4.

Affordable method: This method is used by small companies who dont have enough communication budgets. In this method company allots the fixed amount for the communication program. The company can have better control over its expenditure. But if sales require higher communication effort, company cannot allocate the budget. Percentage of sales method: In this method company allots the budget on the basis of total sales forecasted. This is the simplest method. Marketer can have better control over the budget and also have flexibility to allocate the budget. Competition method: The Company sets its promotion budget on the basis of competitors advertising effort. The company keeps a watch on the competitors communication program and study the industry trends in communication budget before allotting communication budget. Objective and task method: The procedure involved in estimating the advertisement budget by this method are First, objectives are set for the communication programs. Second, tasks required to achieve the objectives are identified and third, the cost of achieving these objectives is estimated.
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Introduction to Advertising
Types of Advertisements Institutional advertising: The purpose of such advertising is to improve the image of the company rather than selling the product. Product advertising: The objective of this type of advertisement is to communicate about the product attributes to the target customer. Product advertising is further classified into three types. They are
Pioneer advertising: This mode of advertisement is used to create awareness and demand in the initial stage of the product life cycle. Competitive advertisements: This type of advertisement is used to highlight the differentiation of organizations product. This method is usually used in the growth phase of product life cycle. Comparative advertisements: This type of advertisement highlights the comparison of companys communication message with competitors product information. This method is used when the competition is very high or sales are slow.

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Decisions involved in developing advertisement programs

Determining the advertisement objectives
Marketing management should decide the objectives of advertisements in the initial stage of the program. The objectives of advertisements are: i. Provide the information about advertisements and create awareness about the product. ii. Highlight the uniqueness of companys products over competitors. iii. Reminding about the product and encouraging the thinking about the product.

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 Determining the advertisement budget

The factors that affect the advertisement budget decisions are: i. The product stage in the product life cycle: In the introduction stage of product life cycle company needs to spend more money to inform consumers about the product and to create the awareness. ii. The market share of the company: If the share of the company is high, it tries to defend it by heavy advertising and if the share is low but the market is attractive, organizations promote its products heavily.

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 Developing advertisement strategy Advertisement strategy depends on two important factors. They are i. Developing messages ii. Choosing proper media

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i.

Message development

Message should be developed only after preparing the complete target profile. Understand what the interests of the target customers are. Message should answer the objectives of the program. Message should be simple and can be understood by anybody. There should be use of more interactive communication tools.

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ii. Selecting advertising media Assess how many target customers should view the communication message. Point out how many times a target customer will see the advertisement. Evaluate the impact of advertisement message on the target audience. List out the media habits of the target customers. Find the suitable media for type of product the organization has. Prepare cost sheet and choose optimum media. Choose particular media channel (Zee channel, Times now, Prajavani, Hindu etc) Decide how many times advertisement should be given in the year and also decide the continuity of advertisement. Allocate the media execution strategy on the basis of prime time and non prime time or seasonal and non seasonal decisions.

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 Evaluating advertising The communication department wants to find whether the message given is effectively reaching the consumer and encouraging them to purchase the product. To solve this purpose, they evaluate the advertisements by various methods. Some important methods used to evaluate advertisements are recognition method (showing the advertisement and asking whether they have seen it before), aided recall (asking people to tell the brand they remember) and unaided recall (asking people if they can remember seeing any ads within an identified product category).

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Characteristics of major media I. Broad cast media Radio

1. 2. 3. 1. 2. 3. 4. 5. Provides up to date information Reaches the local audience effectively After FM revolution this is one of the fastest growing media. Expensive medium Products can be well explained and demonstrated. It provides wide geographic coverage Image creation is difficult in this medium because of spontaneity. Wide number of media channels creates the problem for media planners.

Television

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II. Print media Newspapers

Continue to dominate local markets. Retail and classified advertisement are key. Important advantages include flexibility and community prestige.

Magazines
Divided into two broad categories of consumer magazines and business magazines. These categories are also subdivided into monthly publications and weekly publications. Specialty advertisements can be promoted through this media.

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III. Outdoor Advertising

1. 2. 3. 4. Includes billboards, painted bulletins or displays, and electric boards The oldest and simplest media business. Effective in high traffic areas. Environmentalists oppose this type of advertisement.

IV. Online advertising

1. 2. 3. Contains characteristics of both print and broadcast media. Improves two-way communication and encourages audience participation. Example of this media is e- mail.

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V.

Other Advertising Media

Transit advertisement: These are advertisements placed on the buses and moving vehicles. Movie advertising: This is inserting the advertisement inside the movie. In flight commercials: These are advertisements placed in the airplanes. Using yellow pages and pamphlets to advertise the product.

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Fundamentals of Sales Promotion

Sales promotions are short term programs that encourage consumers to purchase a product or service immediately. Sales Promotion comprises that range of techniques used to attain sales or marketing objectives in a cost effective manner by adding value to a product or service either to intermediaries or end users, normally but not exclusively within a defined time period. ---- Institute of Sales Promotion Sales promotions are short term incentives that are used to generate instant sales.

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Sales promotion methods according to Indian market:

Sales promotion uses three different types of tools. They are 1. Consumer promotion tools 2. Trade promotion tools 3. Business promotion tools.

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I.

Consumer promotion tools: These promotion tools are directly targeted to customer. These tools encourage the target customer to purchase the products quickly. Some of the consumer promotion tools used in the Indian market are: 1. Price promotion: Organization offers price reduction on the product. For example, Rs 5 off on the purchase of Revive 200g. 2. Contest promotion: Organization requests the customer to purchase the product to participate in the contest and win prizes. For example, Britannias Britannia khao, world cup jao contest. 3. Multiple promotions: Promotions offer includes more than one promotional offer. For example, Rs 30 off and a multipurpose jar free on the purchase of 1 liter pack of Halo shampoo.
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4. Add on promotion: Promotion offers a free or an additional product (same or different) with the original product. For example, an 8 ml Sunsilk shampoo sachet free with 75g Pears. 5. Exchange promotion: Price of a product is reduced when an old product is exchanged for new product. For example, bring your old color television and take home a Philips LCD TV for Rs 15,000. 6. Combination promotion: Two or more products are offered together at a discount price or some incentive is given on a combination pack. For example, save Rs 10 on the combined purchase of Colgate toothpaste and tooth brush. 7. Volume promotion: Allows additional quantity of product free on its purchase. For example, get 50g extra on purchase of 100g Tide.
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Top 10 companies on usage of sale promotions (2007). 1. Maruti Suzuki Ltd. 2. Reliance Communications Ltd. 3. Nokia Corporation 4. LG Electronics India Ltd. 5. Pantaloons India Ltd. 6. HP India Ltd. 7. Tata Sky Ltd. 8. Planning Consultant India Ltd. 9. Samsung India Electronics Ltd. 10. Hero Honda Motors Ltd.

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II. Trade promotion tools: These promotions are targeted to retailers and wholesalers. The purpose of this type of promotion is to get the shelf space, motivate the retailers and wholesalers to sell the products and promote brands in the local media. There are many trade promotion tools used in the market but the two major ones are discounts and allowances. 1. Discounts: Manufacturer gives straight reduction in the list price on every purchase that channel member does in the particular period. 2. Allowances: This is the value provided by the manufacturer to the channel member to advertise the product in the local media or display the product in the store.

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III. Business Promotion tools These are promotion tools used to lead generation, reward customer and motivate salespeople for business customers. An organization uses conventions and trade shows. For example, Machine tool industry organizes Amtex exhibition in different places of the country. Organization also conducts sales contest for its sales executives to motivate them to sell more.

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Basics of Public Relations

Public relations (PR) are the management of internal and external communication of an organization to create and maintain a positive image. Public relations involve highlighting success, downplaying failures, announcing changes, and many other activities. Methods of public relations: Lobby groups: These are established to influence government policy, corporate policy, or public opinion. These groups have a particular interest. News conferences and grand openings to attract media and customers. Using written and audio visual material to reach the public. Social responsibilities of the organization have shown through public service activities. Preparing interactive website, communities and blogs on the internet.
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Advantages of public relations It helps in building and maintaining relations with local community. For example, Coca Cola Indias initiatives of transforming villages campaign helped it to get better image among the rural consumers. It helps in keeping better relations with the investors. A good image with social groups creates word of mouth advertising. It helps in reducing the conflicts and false impressions about the company or product. It helps in making the products well known.

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Role of public relations in communications Public relation messages are created by the company staff and distributed in the media without any cost. If the message is powerful, it reaches different media. Whenever the company faces any problem, it looks towards the public relations and not advertisements. For example, in Cadbury chocolate worm issue or cola pesticide issue public relations is used more than the advertisements. The firms public relations should be mixed with other promotion activities of the company.

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