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4.5. Promotion

Promotion

Many of the practical activities of the marketing department are related to promotion. Promotion is the element of the mix over which the marketing department generally has most control. The aims of promotion (AIDA) are:

• Arouse attention

• Generate interest

• Inspire desire

• Initiate action

Promotion in the marketing mix includes all marketing communications which let the public know of the product or service:

• Advertising

• Sales promotion (discounts, coupons, special displays in particular stores)

• Direct selling by sales personnel

• Public Relations

Lancaster and Withey (2005) identified the following elements of successful advertising. It must be:

• Well planned and executed

• Effective as a method of communication

• Part of an overall effective promotional mix

• Aligned with the overall values and mission of the company

The range of promotional tools

• Above the line campaigning is advertising placed in paid for media such as the press, radio, TV, cinema and outdoor sites. The line is one in an advertising agency’s accounts, above which are shown its earnings on a commission basis, from the buying of media space for clients

• Below the line promotion involves product integral and negotiated sales incentives, such as packaging, merchandising, on-pack discounts and competitions.

The shift is from an intervention-based approach to marketing communications (one based on seeking the attention of a customer who might not necessarily be interested), towards permission-based communications (where the focus is upon communications with members of an audience who have already expressed an interest in a particular offering’.

The product life cycle and promotional strategy

|Promotional activities |Introduction |Growth |Maturity |Decline |

|Strategic focus |Strong push then pull for|Pull to differentiate |Pull and push to sustain |Some pull to remind |

| |awareness | |loyalty and exposure |core users |

| | | |through reassurance | |

|Public Relations |√ | |√ | |

|Advertising |√ |√ |√ | |

|Direct Marketing | |√ |√ |√ |

|Personal selling |√ |√ |√ |√ |

|Sales promotion |√ | |√ | |

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• Introduction: for consumer brands this phase is critical as the primary need is to secure trade acceptance and then build public awareness.

• Growth: promotional activity is used competitively to build market share. Customers are normally willing to buy, having been made aware but their problem becomes one of brand choice. Marketing communications should therefore be used to differentiate and clearly position the product such that it represents significant value for the customer.

• Maturity: the battle here is to retain customer loyalty. To do this, sales promotions are often used, to encourage trial by non-users and to reward current users.

• Decline: As sales start to decline it is normal practice to withdraw a great deal of promotion support. Direct marketing and a little well-targeted advertising to remind and reassure brand loyalists is the most commonly used.

Promotion aims to influence customers favourably towards an organization’s products or services. It is necessary to coordinate all the promotional elements to achieve the maximum influence on the customer. The aim is optimal effectiveness, economy and efficiency of the promotional tools.

Impact of changing technology on promotional strategies (such as viral marketing, social media marketing and social networking)

Marketing Communications

When conducting a marketing campaign, there is a range of possible communication methods and channels the campaign could utilize.

The Promotion mix

The promotion mix consists of the blend of promotional tools that are considered appropriate for a specific marketing campaign. These tools represent the deployment of deliberate and intentional methods calculated to bring about a favourable response in the customer’s behaviour. Approaches to promotion may be grouped in three general categories:

• Mass media – the whole market segment is targeted with the same communication

• Personal and interactive – two-way communication between a sales person and potential customer

• Personal and direct – one-way communication from the seller to the potential customer, usually by letter or email.

Consumer and business to business markets

Consumer markets (B2C) are categorized as consisting of mass audiences which are cost effectively accessible by television or national newspaper advertising.

Business to business markets (B2B) by contrast involve a great deal of personal selling at different levels in the organization. The needs of individual companies are different and therefore mass advertising would be wasteful.

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Advantages and Disadvantages of Each Element of the Promotional Mix

|Mix Element |Advantages |Disadvantages |

|Advertising |Good for building awareness |Impersonal - cannot answer all a customer's |

| |Effective at reaching a wide audience |questions |

| |Repetition of main brand and product positioning |Not good at getting customers to make a final |

| |helps build customer trust |purchasing decision |

|Personal Selling |Highly interactive - lots of communication between |Costly - employing a sales force has many hidden|

| |the buyer and seller |costs in addition to wages |

| |Excellent for communicating complex / detailed |Not suitable if there are thousands of important|

| |product information and features |buyers |

| |Relationships can be built up - important if | |

| |closing the sale make take a long time | |

|Sales Promotion |Can stimulate quick increases in sales by targeting|If used over the long-term, customers may get |

| |promotional incentives on particular products |used to the effect |

| |Good short term tactical tool |Too much promotion may damage the brand image |

|Public Relations |Often seen as more "credible" - since the message |Risk of losing control - cannot always control |

| |seems to be coming from a third party (e.g. |what other people write or say about your |

| |magazine, newspaper) |product |

| |Cheap way of reaching many customers - if the | |

| |publicity is achieved through the right media | |

Types of Marketing

• Consumer marketing (the 4Ps)

• Services marketing (the 3Ps of the extended marketing mix)

• Direct/indirect marketing

• Guerrilla marketing

• Viral marketing

• Interactive marketing

• Experiential marketing

• E-marketing

• Internal marketing

Direct marketing

Direct marketing is the ‘planned recording, analysis and tracking of customer behaviour to develop relational marketing strategies’. Because direct marketing removes all channel intermediaries apart from the advertising and delivery mediums, it is known as a ‘zero level channel’.

Direct marketing encompasses a wide range of media and distribution opportunities such as:

• Television

• Radio

• Direct mail

• Inserts

• Telemarketing

• The internet

(a) Telemarketing

One form of direct marketing is telemarketing. Telemarketing is a quick, accurate and flexible tool for gathering, maintaining and helping to exploit relevant up-to-date information about customers and prospects. Telemarketing is the planned and controlled use of the telephone for sales and marketing opportunities.

The characteristics of telemarketing include the message being targeted to the recipient, it is personal, interactive, immediate and flexible (conversations can be tailored spontaneously as the representative responds to the contact’s needs.

Question: Explain how a manufacturer’s promotional activity might vary depending upon the sort of distribution channel that operates

Indirect Marketing

Indirect marketing is the marketing of products as a consequence of another activity or action. With indirect marketing the organization does not push products or services onto customers. Instead it performs a number of related activities that arouse interest in the product or service. Examples include posting blogs on the internet and publishing articles. Another form of indirect marketing is ‘word of mouth’ advertising. Recent developments in indirect marketing have been guerilla and viral marketing.

(a) Guerrilla Marketing

Guerrilla marketing involves taking people by surprise and creating a buzz in unexpected places. It relies more on use of the imagination than large sums of money.

Principles

Jay Conrad Levinson identified the following principles of Guerrilla marketing:

• It is specifically geared for small organizations and entrepreneurs

• It should be based on psychology rather than experience, judgment and guesswork

• It should be based on time, energy and imagination rather than money

• Organizations should be judged on profit not sales

• Marketers should focus on the number of new relationships created in each time period

• Organizations should focus on creating a standard of excellence in their products and services rather than diversifying

• Organizations should focus on increasing the numbers of customer referrals as well as the number and size of transactions, rather than just aiming to attract new customers

• Organizations should cooperate with competitors

• A combination of marketing methods should be used in a guerrilla marketing campaign.

• The campaign should make use of technology.

Benefits of Guerrilla Marketing

Increase Brand Awareness and Consumer Recall

The reason that guerrilla marketing is so effective is that it bombards consumers with the company's message while they are vulnerable and least expect it. The goal is to be super creative and create an interaction that the customer will not forget. For example, a hair salon might hire college students to dye their hair bright colors and hand out flyers at a local shopping mall. Think about it. Would you forget the name of a hair salon after being handed a flyer by a guy with a purple mohawk?

Interaction with Consumers

Guerrilla marketing tactics primarily focus on "hitting the streets" to bring the brand and product to the customer. This approach allows companies to work directly with consumers without hiding behind a television screen or other medium. This interaction makes the company seem more personal and allows company representative the opportunity to get direct feedback on how customers feel about the products and services being offered.

Low Cost

Traditional marketing approaches can be very costly. Each year, companies spend billions of dollars on commercials, print ads, internet campaigns, billboards, and radio broadcasts. For small businesses, money is a precious resource. A huge benefit to guerrilla marketing is that it has a low cost. Typically, you will only need to pay for the workers who run the campaign and basic marketing materials such as flyers. This gives small businesses to opportunity to easily reach thousands of customers for a few hundred dollars.

Disadvantages

One of the primary disadvantages is that guerrilla marketing may often work slowly. Although it is inherently such a large, in-your-face project, the benefits will not be seen over night. Although this is typical with all marketing initiatives, the tactics behind guerrilla marketing may imply differently to some. It is important to realize, that although its execution is unconventional, consumer response is not necessarily as unconventional in terms of rapidity of response.

Another key disadvantage surrounds the variables present in a guerrilla advertisement. As the article indicates, guerrilla initiatives operate in a world with 100′s more variables than traditional ads–at least in the sense that traditional ads’ variables are familiar to consumers, so they do not as readily and unpredictably detract from the rhetoric. Finally, one other disadvantage refers to controversy–not everyone is going to like the initiative. Some may even seek to take action against it. The key is to ensure that those who don’t like it don’t hold too much power and standing, and that those who do like it are those who you are targeting.

Viral marketing

Viral marketing involves the use of pre-existing social networks to spread brand awareness or other marketing objectives. This form of marketing is termed ‘viral’ because the life of the marketing message is comparable to the self replication and spread of biological and computer viruses. The viral campaign is successful when a customer received the marketing message, copies it, and sends it to their friends or posts it on social networking sites.

Individuals who pass on viral marketing are said to have a high ‘Social Networking Potential’. It is the goal of viral marketers to identify these individuals and design messages that have a high probability of being passed on by them.

The six principles of viral marketing

Dr. Ralph F Wilson describes six principles of an effective viral marketing strategy

a) Provide free products or services – free items attract attention

b) The form of the message must be easy to pass on

c) The transmission method must be scalable from small to large very quickly to aid the spread of the message

d) The message must exploit common motivations and behaviours.

e) Use existing communication networks

f) Take advantage of other people’s resources

Example: Compare the website created as part of a viral marketing campaign for Compare the

Question: Briefly explain the concepts of guerrilla and viral marketing, providing an example of each.

Interactive Marketing

According to Deighton ‘interactive marketing is the ability to address the customer, remember what the customer says and address the customer again in a way that illustrates that we remember what the customer has told us’. An organization that makes good use of interactive marketing is . Customers can set preferences and the site records their past transactions. In future visits they are presented with possible purchases based on this information.

Experiential marketing

This involves providing an experience that creates an emotional connection between a person and a brand, product or idea.

Experiential marketing encourages potential customers to engage with the personality of the brand, through experiencing it. It is a combination of ins-store promotion techniques and field marketing. It aims not only to sell more products in the short-term but also to encourage customers and potential customers to engage with the personality of the brand. It is seen as an effective way of connecting with customers, as the emotional connection encourages brand loyalty.

E-marketing

E-marketing now includes the use of a website, text messages, e-mail, online surveys and the use of social networks sites such as Facebook and Twitter.

Successful websites should do the following:

• Attract visitors – good quality, up-to-date content, easy to navigate, fast to download and quick response times

• Enable participation – interactive content and suitable facilities to allow for transactions

• Encourage return visits – design the site to target the needs of particular segments. Offer free services and added value facilities

• Allow for two-way information sharing – personalization reflecting visitor preference, direct marketing and information retrieval provide visitors with the information they are seeking.

• Integrate with back office systems – systems must be in place to process orders and dispatch products that have been generated by the website.

• Security – protect visitors’ and customers’ privacy and security.

Benefits of an effective website

|Benefit |How generated |

|Market size |Internet-based organizations have a global market and opportunities to develop new methods of |

| |distributing their products |

|Loyalty |Website offers and features |

|Productivity |Better management of the supply chain |

|Reputation |Opportunity to offer real customer benefits and develop intimate relationships with customers |

|Costs |Generally lower than for retail outlets |

|Communication |Allows quick responses to queries |

|Convenient |Easy customer access from home to work |

|Opportunity |Smaller organizations can compete globally with large, established ones |

|Information |Customer information can be stored and used in marketing. Opportunity for enhanced market |

| |segmentation. |

Potential Problems with website

The main risks associated with running a website are with security issues, such as viruses or hackers damaging the website and perhaps accessing any linked systems. There is the risk of credit card fraud and the site failing due to hardware or software issues and potential damage to the organization’s reputation if confidential customer information is lost.

Set-up and running costs for a state of the art website can be high, especially with search engine optimization being required to ensure the website appears high in the search rankings.

Website Promotion

a) Banner advertising: banner adverts are a source of revenue for the websites they appear on. Affiliate schemes and pay per click advertising pay the host site a small fee for every visitor they attract or if they make a subsequent purchase. Search engines such as Google make money in a similar way, but organizations can also pay them a fee to display an advert whenever key words are entered in the search box. Advertisers may get visitors to register their interest in the product when they are on the site so that they can be directly targeted in future.

b) E-mail marketing: E-mail is cheap, relatively easily targeted and can be sent to large numbers of people quickly. It is therefore of great interest to marketers, but there is increasing concern at the prevalence of junk email.

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