1. Promoting Products: Communication and Promotion Policy and Advertising
Marketing for Hospitality and Tourism
Kotler, Bowen and Makens
Promoting Products: Communication and Promotion Policy and Advertising
Chapter 13

2. Learning Objectives
Discuss 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
Advertising
Personal Selling
Direct
Marketing
Public Relations
Sales Promotion
The Promotion
Mix
A 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 persuasively
Advertising
Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor (See Slide 13)
Sales promotion
Short-term incentives to encourage the purchase or sale of a product or service (See Slide 14)
Personal selling
Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships (See Slide 15)
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 (See Slide 16)
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 (See Slide 17)

5. Integrated Marketing Communications
Several major factors are changing the face of today’s marketing communications
Consumers are changing
In this digital, wireless age, they are better informed and more communications empowered
Rather than relying on marketer-supplied information, they can use the Internet and other technologies to seek out information on their own
More than that, they can more easily connect with other consumers to exchange brand-related information or even to create their own marketing messages
Marketing strategies are changing
As mass markets have fragmented, marketers are shifting away from mass marketing
More and more, they are developing focused marketing programs designed to build closer relationships with customers in more narrowly defined micromarkets
Sweeping advances in communications technology are causing remarkable changes in the ways in which companies and customers communicate with each other
Although television, magazines, newspapers, and other mass media remain very important, their dominance is declining
The shift toward a richer mix of media and communication approaches poses a problem for marketers
Today, 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 brands
Integrated marketing communications calls for recognizing all touchpoints where the customer may encounter the company and its brands
IMC 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
Media
Sender
Encoding
Message
Decoding
Receiver
Noise
To communicate effectively, marketers need to understand how communication works
Two 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 system
Sender
The party sending the message to another party
Encoding
The process of putting thought into symbolic form
Message
The set of symbols that the sender transmits
Media
The communication channels through which the message moves from the sender to the receiver
Decoding
The process by which the receiver assigns meaning to the symbols encoded by the sender
Receiver
The party receiving the message sent by another party
Response
The reactions of the receiver after being exposed to the message
Feedback
The part of the receiver's response communicated back to the sender
Noise
The unplanned static or distortion during the communication process, which results in the receiver getting a different message than the one the sender sent
Feedback
Response

7. Steps in Developing Effective Communication
Determine the Communication Objectives
Design the Message
Identify the Target Audience
Select the Communication Channels
Select the Message Source
Collect Feedback
Marketers 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 feedback
Identifying the Target Audience
A marketing communicator starts with a clear target audience in mind
The audience may be potential buyers or current users, those who make the buying decision, or those who influence it
The audience may be individuals, groups, special publics, or the general public
The 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 it
Determining the Communication Objective
Once a target audience has been defined, the marketing communicator must decide what response is sought
In most cases, the final response is purchase
The marketing communicator needs to know where the target audience stands in relation to the product and to what state it needs to be moved
Designing the Message
Having defined the desired audience response, the communicator turns to developing an effective message
Ideally, the message should get attention, hold interest, arouse desire, and obtain action (See Slide 9)
Selecting Communication Channels
The communicator must now select channels of communication
The two broad types of communication channels are personal and nonpersonal (See Slide 10)
Selecting the Message Source
The message’s impact on the audience is also affected by how the audience views the sender
Messages delivered by highly credible sources are persuasive
What factors make a source credible?
The three factors most often found are expertise, trustworthiness, and likability
Expertise is the degree to which the communicator appears to have the authority needed to back the claim
Trustworthiness is related to how objective and honest the source appears to be
Likability is how attractive the source is to the audience
Collecting Feedback
After sending the message, the communicator must research its effect on the target audience
This 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
Knowledge
Liking
Awareness
Preference
Conviction
Purchase
The target audience may be in any of six buyer readiness states: awareness, knowledge, liking, preference, conviction, or purchase
Awareness
The communicator must be able to gauge the target audience’s awareness of the product or organization
The audience may be totally unaware of it, know only its name, or know one or a few things about it
If most of the target audience is unaware, the communicator tries to build awareness, perhaps by building simple name recognition
Knowledge
The target audience might be aware of the company or product but know little else
Liking
If target audience members know the product, how do they feel about it?
Preference
A target audience might like the product but not prefer it to others
In this case the communicator must try to build consumer preference
The communicator promotes the product’s quality, value, performance, and other features
Conviction
A target audience might prefer the product but not develop a conviction about buying the product
Marketers have a responsibility to turn favorable attitudes into conviction because conviction is closely linked with purchase
Purchase
Finally, some members of the target audience might have conviction but not quite get around to making the purchase
They may wait for more information or plan to act later
The communicator must lead these consumers to take the final step
Actions 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 Content
The communicator has to figure out an appeal or theme that will produce a desired response
The three types of appeals are rational, emotional, and moral
Rational appeals relate to audience self-interest
Emotional appeals attempt to provoke emotions that motivate purchase
Moral appeals are directed to the audience’s sense of what is right and proper
Message Structure
The communicator must also decide how to handle three message structure issues
The first is whether to draw a conclusion or leave it to the audience
The second message structure issue is whether to present a one- or two-sided argument
The third message structure issue is whether to present the strongest arguments first or last
Message Format
The communicator also needs a strong format for the message
To attract attention, advertisers can use novelty and contrast, eye-catching pictures and headlines, distinctive formats, message size, position, color, shape, and movement
If the message is to be carried over the radio, the communicator has to choose words, sounds, and voices

10. Communication Channels
Personal
Nonpersonal
The two broad types of communication channels are personal and nonpersonal
Personal Communication Channels
In personal communication channels, two or more people communicate directly with each other
They might communicate face to face, on the phone, via mail or , or even through an Internet chat
Personal 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 communities
Nonpersonal Communication Channels
Nonpersonal communication channels are media that carry messages without personal contact or feedback
They include media, atmospheres, and events
Major 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 product
Events are occurrences staged to communicate messages to target audiences
Public relations departments arrange press conferences, grand openings, public tours, and other events to communicate with specific audiences

11. Setting the Total Promotion Budget
Methods
Affordable
Percentage of Sales
Competitive Parity
Objective and Task
One of the hardest marketing decisions facing companies is how much to spend on promotions
How do companies determine their promotion budget?
Four common methods are used to set the total budget for advertising:
The Affordable Method
Many companies use the affordable method
They set a promotion budget at what they think the company can afford
Unfortunately, this method of setting budgets completely ignores the effect of promotion on sales volume
It leads to an uncertain annual promotion budget, which makes long-range marketing planning difficult
Although the affordable method can result in overspending on advertising, it more often results in underspending
Percentage of Sales Method
Many 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 price
Some firms use this method because it is easy
However, the percentage of sales method has little justification
It wrongly views sales as the cause of promotion rather than as the result
It may prevent increased spending
Long-range planning is difficult
It does not provide a basis for choosing a specific percentage
Competitive Parity Method
Other companies use the competitive parity method, setting their promotion budgets to match competitors’ outlays
There are no grounds for believing that competition has a better idea of what a company should be spending on promotion
Also, no evidence indicates that budgets based on competitive parity prevent promotion wars.
Objective and Task Method
The most logical budget setting method is the objective and task method (See Slide 12)

12. Objective and Task Method
Define Specific Objectives
Determine Tasks to Achieve Objectives
Estimate the Costs of Performing Tasks
The most logical budget setting method is the objective and task method
Using this, marketers develop their promotion budgets by:
Defining specific objectives
Determining tasks that must be performed to achieve these objectives
Estimating the costs of performing them
The sum of these costs is the proposed promotional budget
This method forces management to spell out its assumptions about the relationship between dollars spent and promotional result
It is also the most difficult method to use because it can be hard to determine which tasks will achieve specific objectives
With 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 Image
Low Cost per Exposure
Drawbacks
Impersonal
One-Way Communication
Easily Ignored
Can Be Very Costly
Each promotional tool; advertising, personal selling, sales promotion, public relations and direct marketing has unique characteristics and costs
Advertising
Benefits
Advertising’s public nature suggests that the advertised product is standard and legitimate
Advertising also allows the seller to repeat a message many times
Advertising can be used to build a long-term image for a product and also stimulate quick sales
Advertising can reach masses of geographically dispersed buyers at a low cost per exposure
Drawbacks
Although it reaches many people quickly, advertising is impersonal and cannot be as persuasive as a company salesperson
Advertising is able to carry on only a one-way communication with the audience
The audience does not feel it has to pay attention or respond
Advertising can be very costly

14. Personal Selling Benefits Builds Buyer Preference
Fosters Relationships
Drawbacks
Long-Term Commitment
Most Expensive Tool
Each promotional tool; advertising, personal selling, sales promotion, public relations and direct marketing has unique characteristics and costs
Personal Selling
Benefits
Most effective tool at certain stages of the buying process, particularly in building buyer preference, conviction, and purchase
Involves personal interaction between two or more people
Lets all kinds of relationships spring up, ranging from a matter-of-fact selling relationship to a deep personal friendship
The buyer usually feels a greater need to listen and respond
Drawbacks
A sales force requires a longer-term company commitment than advertising
The company’s most expensive promotion tool

15. Sales Promotion Benefits Attract Customer Attention
Encourage Immediate Purchase
Can Boost Sagging Sales
Drawbacks
Effects are Short-Lived
Short-Term
May Not Build Brand Preference
Each promotional tool; advertising, personal selling, sales promotion, public relations and direct marketing has unique characteristics and costs
Sales Promotion
Sales promotion includes an assortment of tools, coupons, contests, cents-off deals, premiums, and others
Benefits
They attract consumer attention and provide information that may lead the consumer to buy the product
Advertising says “buy our product.” Sales promotion says “buy it now.”
Sales promotion can be used to dramatize product offers and to boost sagging sales
Drawbacks
Its 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 costs
Public Relations
Public relations is more believable
Public 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 costs
Direct Marketing
Although there are many forms of direct marketing, they all share four distinctive characteristics
Nonpublic
The message is normally directed to a specific person
Immediate
Messages can be prepared very quickly
Customized
Messages can be tailored to appeal to specific consumers
Interactive
It 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 & Market
Push vs. Pull Strategy
Buyer Readiness State
Product Life-Cycle Stage
Companies 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 stage
Type of Product and Market
The importance of different promotion tools varies among consumers and commercial markets
When hospitality firms market to consumer markets, they spend more on advertising and sales promotion and often very little on personal selling
Hospitality firms targeting commercial organizations spend more on personal selling
Push versus Pull Strategy
The promotional mix is heavily affected by whether a company chooses a push or pull strategy
Push strategy involves “pushing” the product through distribution channels to final consumers
A push strategy provides an incentive for channel members to promote the product to their customers or push the product through the distribution channels
Using a pull strategy, a company directs its marketing activities (primarily advertising and consumer promotion) toward final consumers to induce them to buy the product
Thus, under a pull strategy, consumer demand “pulls” the product through the channels
Buyer Readiness State
Promotional tools vary in their effects at different stages of buyer readiness
Advertising, along with public relations, plays a major role in the awareness and knowledge stages
Product Life-Cycle Stage
The 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 program
Setting the Objectives
The 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 mix
Advertising objectives can be classified by their aim: to inform, persuade, or remind (See Slide 16)
Setting the Advertising Budget
After determining advertising objectives, a company can establish an advertising budget for each product
The role of advertising is to affect demand for a product
The company wants to spend the amount needed to achieve the sales goal (See Slide 17)
Developing Advertising Strategy
Advertising Strategy consists of two major elements: creating advertising messages and selecting advertising media
Creating the Advertising Message
No matter how big the budget, advertising can succeed only if advertisements gain attention and communicate well
Good advertising messages are especially important in today's costly and cluttered advertising environment (See Slides 18-19)
Choosing Among Major Media Steps
The 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
Informative
Persuasive
Reminder
Advertising objectives can be classified by their aim: to inform, persuade, or remind
Informative advertising
Used heavily when introducing a new product category and when the objective is to build primary demand
Persuasive advertising
Becomes more important as competition increases and a company’s objective becomes building selective demand
Some persuasive advertising has become comparison advertising, which compares one brand directly or indirectly with one or more other brands
Advertisers should use comparative advertising with caution
All too often, such ads invite competitor responses, resulting in an advertising war that neither competitor can win
Reminder advertising
Important for mature products because it keeps consumers thinking about the product

21. Setting an Advertising Budget
Stage in the Product Life Cycle
Competition and Clutter
Market Share
The advertising budget also has some specific factors that should be considered when setting a budget
Stage in the product life cycle
New products typically need large advertising budgets to build awareness and gain consumer trial
Mature brands usually require lower budgets as a ratio to sales
Competition and clutter
In a market with many competitors and heavy advertising support, a brand must be advertised more frequently to be heard above the noise of the market
Market share
High-market-share brands usually require greater advertising expenditures as a percentage of sales than do low-share brands
Building a market or taking share from competitors requires larger advertising budgets than maintaining current share
Advertising frequency
Larger advertising budgets are essential when many repetitions are needed to present the brand’s message
Product differentiation
A brand that closely resembles others in its product class requires heavy advertising to set it apart
When a product differs greatly from those of competitors, advertising can be used to communicate differences to consumers
Advertising Frequency
Product Differentiation

22. Creating the Advertising Message
Message Strategy
Message Execution
Message Decisions
Message Generation
Message Evaluation and Selection
Just to gain and hold attention, today's advertising messages must be better planned, more imaginative, more entertaining, and more emotionally engaging
Message Strategy
The first step in creating effective advertising messages is to plan a message strategy—the general message that will be communicated to consumers
The purpose of advertising is to get consumers to think about or react to the product or company in a certain way
Developing an effective message strategy begins with identifying customer benefits that can be used as advertising appeals
Ideally, the message strategy will follow directly from the company's broader positioning and customer value strategies
Message Execution
The impact of the message depends on what is said and how it is said: message execution
The advertiser has to put the message across in a way that wins the target market’s attention and interest (See Slide 19)
Message Decisions
A large advertising budget does not guarantee a successful advertising campaign
Studies have shown that creative advertising messages can be more important than the number of dollars spent
No matter how big the budget, advertising can succeed only if its message gains attention and communicates well
Message Generation
This characteristic of services in general poses genuine challenges for message creation
As 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 Selection
The advertiser must evaluate possible appeals on the basis of three characteristics
Messages should be meaningful
Pointing out benefits that make the product more desirable or interesting to consumers
Appeals should be distinctive
They should tell how the product is better than competing brands
Believable
Making message appeals believable is difficult because many consumers doubt the truth of advertising

23. Message Execution Slice of Life Lifestyle Fantasy Mood or Image
Musical
Personality
The advertising agency’s creative staff must find a style, tone, words, and format for executing the message
Any message can be presented in different execution styles, such as the following
Slice of life
Shows one or more people using the product in a normal setting
Lifestyle
Shows how a product fits with a lifestyle
Fantasy
Creates a wonder world around the product or its use
Mood or image
Builds a mood or image around the product, such as beauty, love, or serenity
No claim is made about the product except through suggestion
Musical
Shows one or more people or cartoon characters singing a song about the product
Certain cultures seem particularly receptive to the use of theme songs and sing-along melodies in advertisements
Personality
Symbol creates a character that represents the product
Technical expertise
Shows the company’s expertise with the product
Scientific evidence
Presents survey or scientific evidence that the brand is better or better liked than one or more other brands
Testimonial evidence
Features a highly believable or likable source endorsing the product
Technical Expertise
Scientific Evidence
Testimonial Evidence

24. Major Steps in Media Selection
Deciding on Reach, Frequency & Impact
Choosing Among Major Media Types
Selecting Specific Media Vehicles
Deciding on Media Timing
Deciding on Reach, Frequency, and Impact
To select media, the advertiser must decide what reach and frequency are needed to achieve advertising objectives
Reach is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time
Frequency is a measure of how many times the average person in the target market is exposed to the message
Choosing Among Major Media Types
The media planner has to know the reach, frequency, and impact of each major media type
The major media types, in order of advertising volume, are newspapers, television, direct mail, radio, magazine, and outdoor
Each medium has advantages and limitations
Selecting Specific Media Vehicles
The media planner must now choose the best specific media vehicles within each general media type
The media planner must thus balance media cost measures against several media impact factors
First, costs should be balanced against the media vehicle’s audience quality
Second, the media planner should consider audience attention
Third, the planner assesses the vehicle’s editorial quality
Deciding on Media Timing
The advertiser must also decide how to schedule advertising over the course of a year
Finally, the advertiser must choose the pattern of the ads
Continuity means scheduling ads evenly within a given period
Pulsing means scheduling ads unevenly over a given period

25. Evaluating Advertising Effectiveness
Measure
Communication Effect
Sales Effect
Awareness Effect
Managers of advertising programs should regularly evaluate the communication and sales effects of advertising
Measuring the Communication Effect
Measuring the communication effect reveals whether an ad is communicating well
Measuring the Sales Effect
The sales effect of advertising is often harder to measure than the communication effect
One way to measure sales effect is to compare past sales with past advertising expenditures
Another is through experiments
Measuring the Awareness Effect
If 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 Terms
Advertising 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.