Presentation on theme: "Promoting Products: Communication and Promotion Policy and Advertising"— Presentation transcript:
1 Promoting Products: Communication and Promotion Policy and Advertising Marketing for Hospitality and TourismKotler, Bowen and MakensPromoting Products: Communication and Promotion Policy and AdvertisingChapter 13
2 Learning ObjectivesDiscuss the process and advantages of integrated marketing communications in communicating customer value.Define the five promotion tools and discuss the factors that must be considered in shaping the overall promotion mix.Outline the steps in developing effective marketing communications.Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix.
3 Learning Objectives (cont.) Define the roles of advertising in the promotion mix.Describe the major decisions in advertising, including setting objectives and budget; creating the advertising message; selecting advertising media; choosing media types, vehicles, and timing; and evaluating advertising.
4 The Promotion Mix Public Relations Personal Selling Sales Promotion AdvertisingPersonal SellingDirectMarketingPublic RelationsSales PromotionThe PromotionMixA company’s total promotion mix—also called its marketing communications mix—consists of the specific blend of advertising, public relations, personal selling, sales promotion, and direct-marketing tools that the company uses to communicate customer value and build customer relationships persuasivelyAdvertisingAny paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor (See Slide 13)Sales promotionShort-term incentives to encourage the purchase or sale of a product or service (See Slide 14)Personal sellingPersonal presentation by the firm’s sales force for the purpose of making sales and building customer relationships (See Slide 15)Public relationsBuilding 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 (See Slide 16)Direct marketingDirect connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships—the use of direct mail, the telephone, direct-response television, , the Internet, and other tools to communicate directly with specific consumers (See Slide 17)
5 Integrated Marketing Communications Several major factors are changing the face of today’s marketing communicationsConsumers are changingIn this digital, wireless age, they are better informed and more communications empoweredRather than relying on marketer-supplied information, they can use the Internet and other technologies to seek out information on their ownMore than that, they can more easily connect with other consumers to exchange brand-related information or even to create their own marketing messagesMarketing strategies are changingAs mass markets have fragmented, marketers are shifting away from mass marketingMore and more, they are developing focused marketing programs designed to build closer relationships with customers in more narrowly defined micromarketsSweeping advances in communications technology are causing remarkable changes in the ways in which companies and customers communicate with each otherAlthough television, magazines, newspapers, and other mass media remain very important, their dominance is decliningThe shift toward a richer mix of media and communication approaches poses a problem for marketersToday, more companies are adopting the concept of integrated marketing communications (IMC)Under this concept, the company carefully integrates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its brandsIntegrated marketing communications calls for recognizing all touchpoints where the customer may encounter the company and its brandsIMC leads to a total marketing communications strategy aimed at building strong customer relationships by showing how the company and its products can help customers solve their problems
6 Elements in the Communication Process MediaSenderEncodingMessageDecodingReceiverNoiseTo communicate effectively, marketers need to understand how communication worksTwo of these elements are the major parties in a communication—the sender and the receiver. Another two are the major communication tools—the message and the media. Four more are major communication functions—encoding, decoding, response, and feedback. The last element is noise in the systemSenderThe party sending the message to another partyEncodingThe process of putting thought into symbolic formMessageThe set of symbols that the sender transmitsMediaThe communication channels through which the message moves from the sender to the receiverDecodingThe process by which the receiver assigns meaning to the symbols encoded by the senderReceiverThe party receiving the message sent by another partyResponseThe reactions of the receiver after being exposed to the messageFeedbackThe part of the receiver's response communicated back to the senderNoiseThe unplanned static or distortion during the communication process, which results in the receiver getting a different message than the one the sender sentFeedbackResponse
7 Steps in Developing Effective Communication Determine the Communication ObjectivesDesign the MessageIdentify the Target AudienceSelect the Communication ChannelsSelect the Message SourceCollect FeedbackMarketers must do the following: Identify the target audience, determine the communication objectives, design the message, select the communication channels, select the message source, and collect feedbackIdentifying the Target AudienceA marketing communicator starts with a clear target audience in mindThe audience may be potential buyers or current users, those who make the buying decision, or those who influence itThe audience may be individuals, groups, special publics, or the general publicThe target audience heavily affects the communicator’s decision on what will be said, how it will be said, when it will be said, where it will be said, and who will say itDetermining the Communication ObjectiveOnce a target audience has been defined, the marketing communicator must decide what response is soughtIn most cases, the final response is purchaseThe marketing communicator needs to know where the target audience stands in relation to the product and to what state it needs to be movedDesigning the MessageHaving defined the desired audience response, the communicator turns to developing an effective messageIdeally, the message should get attention, hold interest, arouse desire, and obtain action (See Slide 9)Selecting Communication ChannelsThe communicator must now select channels of communicationThe two broad types of communication channels are personal and nonpersonal (See Slide 10)Selecting the Message SourceThe message’s impact on the audience is also affected by how the audience views the senderMessages delivered by highly credible sources are persuasiveWhat factors make a source credible?The three factors most often found are expertise, trustworthiness, and likabilityExpertise is the degree to which the communicator appears to have the authority needed to back the claimTrustworthiness is related to how objective and honest the source appears to beLikability is how attractive the source is to the audienceCollecting FeedbackAfter sending the message, the communicator must research its effect on the target audienceThis involves asking the target audience whether they remember the message, how many times they saw it, what points they recall, how they felt about the message, and their past and present attitudes toward the product and company
8 Buyer Readiness States KnowledgeLikingAwarenessPreferenceConvictionPurchaseThe target audience may be in any of six buyer readiness states: awareness, knowledge, liking, preference, conviction, or purchaseAwarenessThe communicator must be able to gauge the target audience’s awareness of the product or organizationThe audience may be totally unaware of it, know only its name, or know one or a few things about itIf most of the target audience is unaware, the communicator tries to build awareness, perhaps by building simple name recognitionKnowledgeThe target audience might be aware of the company or product but know little elseLikingIf target audience members know the product, how do they feel about it?PreferenceA target audience might like the product but not prefer it to othersIn this case the communicator must try to build consumer preferenceThe communicator promotes the product’s quality, value, performance, and other featuresConvictionA target audience might prefer the product but not develop a conviction about buying the productMarketers have a responsibility to turn favorable attitudes into conviction because conviction is closely linked with purchasePurchaseFinally, some members of the target audience might have conviction but not quite get around to making the purchaseThey may wait for more information or plan to act laterThe communicator must lead these consumers to take the final stepActions might include offering the product at a low price, offering a premium, or letting consumers try it on a limited basis
9 Designing the Message Message Content Message Message Format Structure In putting the message together, the marketing communicator must solve three problems: what to say (message content), how to say it logically (message structure), and how to say it symbolically (message format)Message ContentThe communicator has to figure out an appeal or theme that will produce a desired responseThe three types of appeals are rational, emotional, and moralRational appeals relate to audience self-interestEmotional appeals attempt to provoke emotions that motivate purchaseMoral appeals are directed to the audience’s sense of what is right and properMessage StructureThe communicator must also decide how to handle three message structure issuesThe first is whether to draw a conclusion or leave it to the audienceThe second message structure issue is whether to present a one- or two-sided argumentThe third message structure issue is whether to present the strongest arguments first or lastMessage FormatThe communicator also needs a strong format for the messageTo attract attention, advertisers can use novelty and contrast, eye-catching pictures and headlines, distinctive formats, message size, position, color, shape, and movementIf the message is to be carried over the radio, the communicator has to choose words, sounds, and voices
10 Communication Channels PersonalNonpersonalThe two broad types of communication channels are personal and nonpersonalPersonal Communication ChannelsIn personal communication channels, two or more people communicate directly with each otherThey might communicate face to face, on the phone, via mail or , or even through an Internet chatPersonal communication channels are effective because they allow for personal addressing and feedback.Buzz marketing involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communitiesNonpersonal Communication ChannelsNonpersonal communication channels are media that carry messages without personal contact or feedbackThey include media, atmospheres, and eventsMajor media consist of print media (newspapers, magazines, direct mail), broadcast media (radio and television), display media (billboards, signs, posters), and online media ( , Web sites, and online social and sharing networks)Atmospheres are designed environments that create or reinforce the buyer’s leanings toward purchasing a productEvents are occurrences staged to communicate messages to target audiencesPublic relations departments arrange press conferences, grand openings, public tours, and other events to communicate with specific audiences
11 Setting the Total Promotion Budget MethodsAffordablePercentage of SalesCompetitive ParityObjective and TaskOne of the hardest marketing decisions facing companies is how much to spend on promotionsHow do companies determine their promotion budget?Four common methods are used to set the total budget for advertising:The Affordable MethodMany companies use the affordable methodThey set a promotion budget at what they think the company can affordUnfortunately, this method of setting budgets completely ignores the effect of promotion on sales volumeIt leads to an uncertain annual promotion budget, which makes long-range marketing planning difficultAlthough the affordable method can result in overspending on advertising, it more often results in underspendingPercentage of Sales MethodMany companies use the percentage of sales method, setting their promotion budget at a certain percentage of current or forecasted sales, or they budget a percentage of the sales priceSome firms use this method because it is easyHowever, the percentage of sales method has little justificationIt wrongly views sales as the cause of promotion rather than as the resultIt may prevent increased spendingLong-range planning is difficultIt does not provide a basis for choosing a specific percentageCompetitive Parity MethodOther companies use the competitive parity method, setting their promotion budgets to match competitors’ outlaysThere are no grounds for believing that competition has a better idea of what a company should be spending on promotionAlso, no evidence indicates that budgets based on competitive parity prevent promotion wars.Objective and Task MethodThe most logical budget setting method is the objective and task method (See Slide 12)
12 Objective and Task Method Define Specific ObjectivesDetermine Tasks to Achieve ObjectivesEstimate the Costs of Performing TasksThe most logical budget setting method is the objective and task methodUsing this, marketers develop their promotion budgets by:Defining specific objectivesDetermining tasks that must be performed to achieve these objectivesEstimating the costs of performing themThe sum of these costs is the proposed promotional budgetThis method forces management to spell out its assumptions about the relationship between dollars spent and promotional resultIt is also the most difficult method to use because it can be hard to determine which tasks will achieve specific objectivesWith the objective and task method, the company sets its promotion budget based on what it wants to accomplish
13 Advertising Benefits Seems Legitimate Allows Repetition Builds Long-Term ImageLow Cost per ExposureDrawbacksImpersonalOne-Way CommunicationEasily IgnoredCan Be Very CostlyEach promotional tool; advertising, personal selling, sales promotion, public relations and direct marketing has unique characteristics and costsAdvertisingBenefitsAdvertising’s public nature suggests that the advertised product is standard and legitimateAdvertising also allows the seller to repeat a message many timesAdvertising can be used to build a long-term image for a product and also stimulate quick salesAdvertising can reach masses of geographically dispersed buyers at a low cost per exposureDrawbacksAlthough it reaches many people quickly, advertising is impersonal and cannot be as persuasive as a company salespersonAdvertising is able to carry on only a one-way communication with the audienceThe audience does not feel it has to pay attention or respondAdvertising can be very costly
14 Personal Selling Benefits Builds Buyer Preference Fosters RelationshipsDrawbacksLong-Term CommitmentMost Expensive ToolEach promotional tool; advertising, personal selling, sales promotion, public relations and direct marketing has unique characteristics and costsPersonal SellingBenefitsMost effective tool at certain stages of the buying process, particularly in building buyer preference, conviction, and purchaseInvolves personal interaction between two or more peopleLets all kinds of relationships spring up, ranging from a matter-of-fact selling relationship to a deep personal friendshipThe buyer usually feels a greater need to listen and respondDrawbacksA sales force requires a longer-term company commitment than advertisingThe company’s most expensive promotion tool
15 Sales Promotion Benefits Attract Customer Attention Encourage Immediate PurchaseCan Boost Sagging SalesDrawbacksEffects are Short-LivedShort-TermMay Not Build Brand PreferenceEach promotional tool; advertising, personal selling, sales promotion, public relations and direct marketing has unique characteristics and costsSales PromotionSales promotion includes an assortment of tools, coupons, contests, cents-off deals, premiums, and othersBenefitsThey attract consumer attention and provide information that may lead the consumer to buy the productAdvertising says “buy our product.” Sales promotion says “buy it now.”Sales promotion can be used to dramatize product offers and to boost sagging salesDrawbacksIts effects are usually short lived, however, and are not effective in building long-run brand preference
16 Public Relations Public Relations Better Reach More Believable Each promotional tool; advertising, personal selling, sales promotion, public relations and direct marketing has unique characteristics and costsPublic RelationsPublic relations is more believablePublic relations can reach many prospects who avoid salespeople and advertisements
17 Direct Marketing Nonpublic Immediate Customized Interactive Each promotional tool; advertising, personal selling, sales promotion, public relations and direct marketing has unique characteristics and costsDirect MarketingAlthough there are many forms of direct marketing, they all share four distinctive characteristicsNonpublicThe message is normally directed to a specific personImmediateMessages can be prepared very quicklyCustomizedMessages can be tailored to appeal to specific consumersInteractiveIt allows a dialogue between the marketing team and the consumer, and messages can be altered depending on the consumer’s response
18 Promotion Mix Strategies Type of Product & MarketPush vs. Pull StrategyBuyer Readiness StateProduct Life-Cycle StageCompanies consider many factors when developing their promotion mix, including the following: type of product and market, push versus pull strategy, buyer readiness state, and product life-cycle stageType of Product and MarketThe importance of different promotion tools varies among consumers and commercial marketsWhen hospitality firms market to consumer markets, they spend more on advertising and sales promotion and often very little on personal sellingHospitality firms targeting commercial organizations spend more on personal sellingPush versus Pull StrategyThe promotional mix is heavily affected by whether a company chooses a push or pull strategyPush strategy involves “pushing” the product through distribution channels to final consumersA push strategy provides an incentive for channel members to promote the product to their customers or push the product through the distribution channelsUsing a pull strategy, a company directs its marketing activities (primarily advertising and consumer promotion) toward final consumers to induce them to buy the productThus, under a pull strategy, consumer demand “pulls” the product through the channelsBuyer Readiness StatePromotional tools vary in their effects at different stages of buyer readinessAdvertising, along with public relations, plays a major role in the awareness and knowledge stagesProduct Life-Cycle StageThe effects of different promotion tools also vary with stages of the product life cycle
19 Major Decisions in Advertising Marketing management must make five important decisions in developing an advertising programSetting the ObjectivesThe first step in developing an advertising program is to set advertising objectives, which should be based on information about the target market, positioning, and marketing mixAdvertising objectives can be classified by their aim: to inform, persuade, or remind (See Slide 16)Setting the Advertising BudgetAfter determining advertising objectives, a company can establish an advertising budget for each productThe role of advertising is to affect demand for a productThe company wants to spend the amount needed to achieve the sales goal (See Slide 17)Developing Advertising StrategyAdvertising Strategy consists of two major elements: creating advertising messages and selecting advertising mediaCreating the Advertising MessageNo matter how big the budget, advertising can succeed only if advertisements gain attention and communicate wellGood advertising messages are especially important in today's costly and cluttered advertising environment (See Slides 18-19)Choosing Among Major Media StepsThe major steps in media selection are (1) deciding on reach, frequency, and impact; (2) choosing among major media types; (3) selecting specific media vehicles; and (4) deciding on media timing (See Slide 20)
20 Advertising Objectives InformativePersuasiveReminderAdvertising objectives can be classified by their aim: to inform, persuade, or remindInformative advertisingUsed heavily when introducing a new product category and when the objective is to build primary demandPersuasive advertisingBecomes more important as competition increases and a company’s objective becomes building selective demandSome persuasive advertising has become comparison advertising, which compares one brand directly or indirectly with one or more other brandsAdvertisers should use comparative advertising with cautionAll too often, such ads invite competitor responses, resulting in an advertising war that neither competitor can winReminder advertisingImportant for mature products because it keeps consumers thinking about the product
21 Setting an Advertising Budget Stage in the Product Life CycleCompetition and ClutterMarket ShareThe advertising budget also has some specific factors that should be considered when setting a budgetStage in the product life cycleNew products typically need large advertising budgets to build awareness and gain consumer trialMature brands usually require lower budgets as a ratio to salesCompetition and clutterIn a market with many competitors and heavy advertising support, a brand must be advertised more frequently to be heard above the noise of the marketMarket shareHigh-market-share brands usually require greater advertising expenditures as a percentage of sales than do low-share brandsBuilding a market or taking share from competitors requires larger advertising budgets than maintaining current shareAdvertising frequencyLarger advertising budgets are essential when many repetitions are needed to present the brand’s messageProduct differentiationA brand that closely resembles others in its product class requires heavy advertising to set it apartWhen a product differs greatly from those of competitors, advertising can be used to communicate differences to consumersAdvertising FrequencyProduct Differentiation
22 Creating the Advertising Message Message StrategyMessage ExecutionMessage DecisionsMessage GenerationMessage Evaluation and SelectionJust to gain and hold attention, today's advertising messages must be better planned, more imaginative, more entertaining, and more emotionally engagingMessage StrategyThe first step in creating effective advertising messages is to plan a message strategy—the general message that will be communicated to consumersThe purpose of advertising is to get consumers to think about or react to the product or company in a certain wayDeveloping an effective message strategy begins with identifying customer benefits that can be used as advertising appealsIdeally, the message strategy will follow directly from the company's broader positioning and customer value strategiesMessage ExecutionThe impact of the message depends on what is said and how it is said: message executionThe advertiser has to put the message across in a way that wins the target market’s attention and interest (See Slide 19)Message DecisionsA large advertising budget does not guarantee a successful advertising campaignStudies have shown that creative advertising messages can be more important than the number of dollars spentNo matter how big the budget, advertising can succeed only if its message gains attention and communicates wellMessage GenerationThis characteristic of services in general poses genuine challenges for message creationAs the editor of the Cornell Quarterly pointed out, “An advertisement can depict a product—a food item, a desk, an exercise machine—but how does one illustrate a hotel stay?”Message Evaluation and SelectionThe advertiser must evaluate possible appeals on the basis of three characteristicsMessages should be meaningfulPointing out benefits that make the product more desirable or interesting to consumersAppeals should be distinctiveThey should tell how the product is better than competing brandsBelievableMaking message appeals believable is difficult because many consumers doubt the truth of advertising
23 Message Execution Slice of Life Lifestyle Fantasy Mood or Image MusicalPersonalityThe advertising agency’s creative staff must find a style, tone, words, and format for executing the messageAny message can be presented in different execution styles, such as the followingSlice of lifeShows one or more people using the product in a normal settingLifestyleShows how a product fits with a lifestyleFantasyCreates a wonder world around the product or its useMood or imageBuilds a mood or image around the product, such as beauty, love, or serenityNo claim is made about the product except through suggestionMusicalShows one or more people or cartoon characters singing a song about the productCertain cultures seem particularly receptive to the use of theme songs and sing-along melodies in advertisementsPersonalitySymbol creates a character that represents the productTechnical expertiseShows the company’s expertise with the productScientific evidencePresents survey or scientific evidence that the brand is better or better liked than one or more other brandsTestimonial evidenceFeatures a highly believable or likable source endorsing the productTechnical ExpertiseScientific EvidenceTestimonial Evidence
24 Major Steps in Media Selection Deciding on Reach, Frequency & ImpactChoosing Among Major Media TypesSelecting Specific Media VehiclesDeciding on Media TimingDeciding on Reach, Frequency, and ImpactTo select media, the advertiser must decide what reach and frequency are needed to achieve advertising objectivesReach is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of timeFrequency is a measure of how many times the average person in the target market is exposed to the messageChoosing Among Major Media TypesThe media planner has to know the reach, frequency, and impact of each major media typeThe major media types, in order of advertising volume, are newspapers, television, direct mail, radio, magazine, and outdoorEach medium has advantages and limitationsSelecting Specific Media VehiclesThe media planner must now choose the best specific media vehicles within each general media typeThe media planner must thus balance media cost measures against several media impact factorsFirst, costs should be balanced against the media vehicle’s audience qualitySecond, the media planner should consider audience attentionThird, the planner assesses the vehicle’s editorial qualityDeciding on Media TimingThe advertiser must also decide how to schedule advertising over the course of a yearFinally, the advertiser must choose the pattern of the adsContinuity means scheduling ads evenly within a given periodPulsing means scheduling ads unevenly over a given period
25 Evaluating Advertising Effectiveness MeasureCommunication EffectSales EffectAwareness EffectManagers of advertising programs should regularly evaluate the communication and sales effects of advertisingMeasuring the Communication EffectMeasuring the communication effect reveals whether an ad is communicating wellMeasuring the Sales EffectThe sales effect of advertising is often harder to measure than the communication effectOne way to measure sales effect is to compare past sales with past advertising expendituresAnother is through experimentsMeasuring the Awareness EffectIf the objective of the advertising is to inform, then conducting a pre- and post-test of the target markets awareness of the product or brand is often used as a method of measuring the effect of an advertising campaign
26 Key TermsAdvertising Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.Atmosphere Designed environments that create or reinforce a buyer’s leanings toward consumption of a product.Continuity Scheduling ads evenly within a given period.Copy testing A process performed before or after an ad is printed or broadcast.Direct marketing Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships: the use of direct mail, the telephone, direct- response television, , the Internet, and other tools to communicate directly with specific consumers.Direct rating The advertiser exposes a consumer panel to alternative ads and asks them to rate the ads.
27 Key Terms (cont.)Events Occurrences staged to communicate messages to target audiences, such as news conferences or grand openings.Informative advertising Advertising used to inform consumers about a new product or feature to build primary demand.Integrated marketing communications Under this concept the company carefully integrates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its brands.Laboratory test This test uses equipment to measure consumers’ physiological reactions to an ad: heartbeat, blood pressure, pupil dilation, and perspiration.Media Nonpersonal communications channels, including print media (newspaper, magazines, direct mail), broadcast media (radio, television), and display media (billboards, signs, posters).Personal selling Personal presentation by the firm’s sales force to make sales and build customer relationships.
28 Key Terms (cont.)Portfolio tests Consumers view or listen to a portfolio of advertisements, taking as much time as they need.Promotion mix The specific mix of advertising, personal selling, sales promotion, and public relations a company uses to pursue its advertising and marketing objectives.Public relations 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.Pulsing Scheduling ads unevenly over a given period.Recall tests The advertiser asks people who have been exposed to magazines or television programs to recall everything they can about the advertisers and products that they saw.Recognition tests The researcher asks readers of, for instance, a given issue of a magazine to point out what they have seen.Reminder advertising Advertising used to keep consumers thinking about a product.Sales promotion Short-term incentives to encourage the purchase or sale of a product or service.