1. Promotions Strategy MBA Term II
Marketing Decisions
Promotions Strategy
MBA Term II

2. Role of Marketing Communications
Marketing communication is a means by which companies attempt to inform, persuade and remind customers, either directly or indirectly about the products or brands that they sell.
It’s a means by which companies can establish dialogues and relationships with the customers.
Customers learn about who makes the product, what does the brand stand for and that they can also get an incentive for trial or use.

3. Changing Marketing Communications Environment
Fragmented Markets
Advanced Technology

4. The Changing Marketing Communications Environment
TV in limited households
Newspapers used to be only for the literate consumers.
Now due to rise in literacy level, there has been a consequent rise in magazine and newspaper readership.
And the advancement in technology has increased influence of social media

5. Marketing Communications Mix
The marketing communications mix consists of eight major modes of communications:
Advertising
Sales Promotion
Events and experiences
Public relations and publicity
Direct Marketing
Interactive Marketing
Word of mouth marketing
Personal Selling

6. Marketing Communications Mix
Advertising:
Any paid form of non personal communication about an organization, product, service, or idea by an identified sponsor.
This can be done in the form of print media (newspapers and magazines), broadcast media (radio and television), network media (telephone, cable, satellite, wireless), electronic media (audiotape, videotape, videodisk) and display media (billboards, signs and posters)

7. Marketing Communications Mix
2. Sales Promotion:
A variety of short term incentives to encourage trial or purchase of a product or service including consumer promotions (samples, coupons and premiums), trade promotions (advertising and display allowance), business and sales force promotions (contest for sales representatives)
Events and Experiences:
Company sponsored activities and programs designed to create daily or special brand related interactions with consumers, including sports, arts, entertainment and cause events as well as less formal activities.

10. Marketing Communications Mix
4. Public relations and publicity:
A variety of programs directed internally to employees of the company or externally to consumers, other firms, the government and media to promote or protect a company’s image or its individual product communications.
5. Direct Marketing:
Use of mail, telephone, fax, or internet to communicate directly with or solicit response or dialogue from specific customers and prospects.

11. Marketing Communications Mix
6. Interactive Marketing:
Online activities and programs designed to engage customers or prospects and directly or indirectly raise awareness, improve image or elicit sales of products and services.
7. Word of mouth Marketing:
People to people oral, written or electronic communications that relate to the merits or experiences of purchasing or using products or services.
8. Personal Selling:
Face to face interactions with one or more prospective purchasers for the purpose of making presentations, answering questions and procuring orders.

13. The Communications Process Models
Macromodel
Micromodel

14. Elements in the Communication Process: Macromodel

15. Elements in the Communication Process: Macromodel
Nine key factors in the macromodel
Two represent the major parties: Sender and receiver
Two represent the major tools: Message and media
Four represent major communication functions: Encoding, decoding, response and feedback
The last element is noise which is random and competing messages that may interfere with the intended communication.
Here the senders have to know who their target audiences are and what responses do they want to get.
Encoding of the message has to be done well so the receivers can decode them well.
They also have to choose only that media that can reach their target audience and develop proper channels for receiving feedback.

16. Micromodel of Consumer Responses
Micromodels of marketing communications concentrate on consumers’ specific responses to communications. Figure 16.2 summarizes four classic response hierarchy models. All these models assume the buyer passes through cognitive, affective, and behavioral stages, in that order. This “learn-feel-do” sequence is appropriate when the audience has high involvement with a product category perceived to have high differentiation, such as an automobile or house. An alternative sequence, “do-feel-learn,” is relevant when the audience has high involvement but perceives little or no differentiation within the product category, such as an airline ticket or personal computer. A third sequence, “learn-do-feel,” is relevant when the audience has low involvement and perceives little differentiation, such as with salt or batteries. By choosing the right sequence, the marketer can do a better job of planning communications.

17. Micromodel of Consumer Responses
These models assume that all customers go through cognitive, effective and behavioral stages
The “learn-feel-do” sequence is appropriate when the audience have high involvement with the product category perceived to have high differences in brands.
Example: Cars
The “do-feel-learn” sequence is relevant when the audience has high involvement but perceives little or no differences within the product category.
Example: Personal computer

18. Micromodel of Consumer Responses
The third sequence “learn-do-feel” is relevant when the audience has low involvement and perceive little differences.
Example: Salt

19. An Ideal Ad Campaign An ideal ad campaign should make sure that:
The right consumer is exposed to the message at the right time and at the right place.
The ad causes consumer to pay attention.
The ad reflects consumer’s level of understanding and behaviors with product.
The ad correctly positions brand in terms of points-of-difference and points-of-parity.
The ad motivates consumer to consider purchase of the brand.
The ad creates strong brand associations.

21. Developing Effective Communications
Following are the eight steps that an advertiser should follow while developing effective communication:
Identify target audience
Determine communication objectives
Design communications
Select channels
Establish budget
Decide on media mix
Measure results/manage IMC

22. Identify the Target Audience
Target audience could be: Potential buyers of the company’s products, current users, deciders, influencers, and individuals, groups, particular publics or the general public.
The target audience is a critical influence on the communicators decisions about what to say, how, when, where and to whom.
We also have to profile them in terms of usage and loyalty.

23. Determine the Communication Objective
Category Need: Establishing a product or service category as necessary to remove or satisfy a perceived discrepancy between a current motivational state and a desired motivational state. A new-to-the-world product such as electric cars will always begin with a communications objective of establishing a category need.
Brand Awareness: Fostering the consumers ability to recognize or recall a brand within the category, in sufficient detail to make a purchase.
Brand Attitude: Help consumers evaluate the brands perceived ability to meet a currently relevant need. (Coke campaign)
Brand purchase intention: Moving consumers to decide to purchase the brand or take purchase related action. (sales promotions)

24. CATEGORY NEED

25. Design the Communications
Message Strategy
Message Source
Creative Strategy

26. Message Strategy
This strategy generally decides what is to be said in the ad
Here is it basically about searching for appeals, themes or ideas that will tie into the brand positioning.
Message of an ad must be either related to the features of the product, or the benefits, performance or atleast some extrinsic considerations
Customers expect four types of rewards from a product: Rational, Sensory, Social or Ego satisfaction.
Example: Get shiner teeth is a rational appeal; rich dark belgian chocolate is a sensory appeal, save paper save the earth is a social appeal, drive the most powerful engine is a ego satisfaction appeal

36. SENSORY APPEAL ADS

39. Creative Strategy
Effectiveness of a communication depends on how well a message is being expressed ( in the form of pictures, graphics and visuals)
If a communication is ineffective, it may mean the wrong message was used or the right one was poorly expressed.
Creative strategies are the way marketers translate their messages into a specific communication.
Creative strategies can be broadly be classified into two types: Informational and transformational appeal.

43. Informational Appeals
This appeal elaborates on the product or services attributes or benefits.
There are several ways of creating ads using the informational appeal:
Problem solution ads (Saridon stops headache quickly)
Product demonstration ads (Godrej washing machines can also brush clothes)
Product comparison ads (comparing engine power, fuel efficiency, space etc in automobiles)
Testimonials from unknown endorsers (a user informing that applying a certain toothpaste on sensitive teeth helps reduce irritation)
Celebrity endorsers (Sachin Tendulkar endorsing a range of products and services)

46. Transformational Appeal
This appeal elaborates on a non product-related benefit or image.
It might depict what kind of person rides a Royal Enfield (Royal Enfield ads are directed at those seeking adventure and thrill)
Or what kind of experience results from using a particular product (Fiama Di Wills bathing bars or Mentos mouth freshner that not only gives you fresh breath but also electrifies the brain)

50. Message Source
Message source is the medium/person who carries the message from the sender to the receiver.
There are some messages that are carried by attractive or popular sources and they are the ones that are remembered the most by audience.
Hence advertisers use celebrities as brand ambassadors who endorse the brand and they are the ones who influence customers purchasing habits.
Celebrities are effective when they are credible or they personify a key product attribute.
Eg: Katrina Kaif in Lux Beauty Bar ad; Amitabh Bachhan in Dabur Chyawanprash ad.

51. Message Source Three most identified sources of credibility are:
Expertise: Specialized knowledge that the communicator holds to back the claim that he/she is making in the ads.
Trustworthiness: How objective and honest the source is perceived to be
Likability: How well do people get attracted to the communicator and how well do they like him/her.

52. Message Source
A message source also helps a brand or a company get over a situation of crisis that it might face.
Example: Cadbury and Amitabh & Coca Cola and Amir Khan.
Principle of Congruity: Implies that communicators can use their good image to reduce some negative feelings towards a brand but in the process might lose some esteem with the audience.
If a consumer finds that a celebrity he/she trusts and respects is endorsing a weak brand (one that she does not like), they might either have reduced respect for the person or increased trust on the weak brand.

55. Select the Communication Channels
Personal Channel
Non Personal Channels

56. Personal Communications Channels
Face to face interaction between two or more people
Through telephones, or surface mails.
This mode gains effectiveness since it includes customized presentation and feedback
This method also includes direct marketing, interactive marketing, word of mouth marketing and personal selling.
Word about good companies travel fast; but words about bad companies travel even faster.

57. Personal Communication Channels
Personal influence carries great weight in the following situations:
Products are expensive and they are purchased infrequently
Products suggest something about the users status or taste
People often seek for recommendations while they are searching for doctors, hotels, architect, or they need to buy land, cars, cameras, diamonds.

58. Non Personal Communication Channels
This method of communication is also known as Mass Communication method.
Here it is more about communicating in mass, not one to one.
There is a specific group of target audience but no one specific individual customer.
This channel makes use of methods such as advertising, sales promotion, events and experiences and public relations.
Event sponsorship is also one of the methods heavily used by brands to gain recognition in the market.

59. Integration of Communication Channels
It is often seen that personal communication is a much more effective mode of communication than mass communication.
But often mass media is the major means of stimulating personal communication.
Mass communication affects personal attitude through a two step process.
In the first step ideas flow from radio, television and print to opinion leaders and in the second step from opinion leaders to less media involved population groups.

60. Establishing the Marketing Communication Budget
This is one of the most difficult marketing decision to be made by a marketer.
Four methods of setting the communication budget:
Affordable Method: Simply setting the advertising budget based on how much can the company afford to spend.
Percentage of Sales Method: Setting the budget as a specified percentage of current or anticipated sales or of the sales price.
Competitive Parity Method: Setting the budget according to their competitors spending on communications.

61. Establishing the Marketing Communication Budget
4. Objective and task method: Setting the budget as per the specific objectives that a firm wants to achieve and the various tasks that are to be performed in order to attain those objectives.
Some of the objectives of companies might be as listed below:
Establish market share goal
Determining the percentage of the market that should be reached by advertising
Determine the percentage of aware prospects that should be persuaded to try the brand
Determine the number of advertising impressions per 1 percent trial rate

62. Deciding on the Marketing Communications Mix

63. Characteristics of the Marketing Communications Mix
ADVERTISING:
Pervasiveness: Advertising permits the seller to repeat a message many times. It also allows the buyer to receive and compare the messages of various competitors. Large scale advertising says something about the sellers size, power and success.
Amplified expressiveness: Advertising provides opportunity to dramatize the company's products through artful use of print, sound and color.
Control: Advertiser can choose the aspects of the brand and product on which to focus communications.

64. Characteristics of the Marketing Communications Mix
SALES PROMOTION:
Coupons, contests, premiums etc
Main objective: To highlight product offers and boost sagging sales
Benefits of sales promotion:
Ability to attract attention: Attracts attention from the customers and leads them to buy or atleast try the product.
Incentive: They incorporate some concession, inducement or contribution that gives value to the consumer.
Invitation: Invites public to get engaged in the transaction

65. Characteristics of the Marketing Communications Mix
PUBLIC RELATIONS AND PUBLICITY:
Three distinctive qualities of public relations and publicity:
High credibility: New stories and features are more authentic and credible to readers than ads.
Ability to reach hard to find buyers: Public relations can reach prospects who prefer to avoid mass media and targeted promotions.
Dramatization: This method can tell stories behind a company, brand or product.

66. Characteristics of the Marketing Communications Mix
EVENTS AND EXPERIENCES:
Relevant:
Engaging: they are live and real time events thus more engaging.
Implicit: They indirectly try to sell.
DIRECT AND INTERACTIVE MARKETING:
This type of communication takes many forms such as over the phone, online or in person. Three characteristics:
Customized: Message can be prepared to appeal individual customer,.
Up to date: Message can be prepared very quickly
Interactive: Message can be changed depending on the persons response.

67. Characteristics of the Marketing Communications Mix
WORD OF MOUTH MARKETING:
Influential: People trust what others say
Personal: It can be a very intimate dialogue that reflects facts, opinions and experiences.
Timely: Word of mouth is only done when a person wants it to happen and that is usually after an event or experience.
PERSONAL SELLING:
Most effective tool in the later stages of the buying process.
Personal interaction: It involves one to one communication.
Cultivation: Permits all kinds of relations to spring up
Response: Customer has the opportunity to respond directly there and then.

68. Factors in Setting the Marketing Communications Mix
Three factors to be taken into consideration while developing their communications mix are:
Type of product market: Consumer Market (advertising and sales promotions); business markets (direct marketing and personal selling)
Consumer readiness to make a purchase: Awareness (advertising and publicity); Comprehension (advertising and personal selling); Conviction (personal selling); Order (sales promotion and personal selling)
Stages in product life cycle: Introduction (all tools are important); Growth (word of mouth and interactive marketing); Maturity( advertising, events and experiences and personal selling); Decline (sales promotions, other tools are not used much)

69. Stages in the Buyer Readiness Process
Awareness
Comprehension
Conviction
Order
Reorder

70. Measuring Communication Results
It is often the higher management that wishes to know the outcomes or impact of the advertising campaign since the money involved is a huge investment for them.
A post campaign survey is conducted where the communications department tries to measure the impact of the campaign in the following aspects:
Recalls and recognition
Number of times the target audience were exposed to the message
How did they feel about the message
What are their previous and current attitudes towards the brand.
The communicator should also try to find out about by how much did the sales actually increase and whether the markets share has increased or not.