Professional Documents
Culture Documents
COMMUNICATION &
PROMOTION
WBB 3053
Chapter Overview
Promotion: function of informing,
persuading, and influencing the
consumers purchase decision
Marketing Communications:
transmission from a sender to a receiver
of a message dealing with the buyer-seller
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Integrated Marketing
Communications
Integrated marketing communications (IMC):
Coordination of all promotional activities media
advertising, direct mail, personal selling, sales
promotion, and public relations to produce a
unified customer-focused promotional message
Success of any IMC program depends critically
on identifying the members of an audience and
understanding what they want
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Developing Effective
Communication
Step 1: Identifying the Target Audience (
i.e
potential buyers of the products, current user, deciders
or influencers)
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Developing Effective
Communication
Step 2: Determining Communication
Objectives
-The marketer either can be seeking a cognitive,
affective or behavioral response.
-Marketers might want to put something in
consumers mind, change attitude or get
consumer to act.
-Objectives may be set to move buyers through
the six readiness stages
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Buyer-Readiness Stage
(Hierarchy-of-effects Model)
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Developing Effective
Communication
Step 3:
Designing a Message
AIDA framework guides
message design (attention, interest, desire and action)
Message content
Rational (product produce certain benefits-quality,
value or performance)
Emotional appeals (+ve and ve) - (fear, humor,
guilt, shame, love)
Developing Effective
Communication
Step 3:
Designing a Message
Message structure
Draw a conclusion? (have (-ve) if too simple)
One-sided or two-sided?( 1 sided that praise the products more
effective vs 2 side praise and shortcoming)
Strongest arguments
presented first or last? (present the strongest arguments first)
Message format
i.e Print Aid communicator must decided on headline, illustration and
color.
i.e Radio choose the word, voice quality.
i.e Television- facial expressions, body gesture
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Developing Effective
Communication
Step 4: Choosing Media
Personal vs. non-personal communication channels
Personal communication channel involves two or
more persons communicating directly each other
(face to face, person to audience, telephone, email)
Non personal communication i.e media (print media,
broadcast, network, electronic and bill board)
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Developing Effective
Communication
Step 5: Selecting the Message Source
Message delivered by highly credible
sources are more persuasive.
For financial products, the best source
will be the employee will be the spoke
person for the products.
Spoke person must have the credibility
(expertise, trustworthiness and likability)
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Developing Effective
Communication
Step 6: Collecting Feedback (measure the
result)
-Measure its impact on the target audience.
(Recognize or recall the message,
previous and current attitudes towards the
products and behavioral measures of
audience response i.e bought, like and talk
to the others about the products.
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Communication Objectives
Communicatio Communication tool
n objective
Example
Awareness
Mass communication
AA insurance
sources.
thats the
Broadcast media (tv & job of the AA
radio) national/ regional
magazines &
newspapers
Interest
Mass communication
sources.
Same media as above
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but notPN.necessarily
the
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Direct line
20%
reduction
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Communication Objectives
Communicat Communication tool
ion objective
Example
Preference
Trial
Adoption
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Bank of Scotland
friend for life
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Communications objectives
Awareness
- for each communication objective
different communication tools will
have
greater effectiveness. E.g. if the target
audience is unaware of the product/
service, the objective is to build awareness:
they can reach a large audience quickly &
at a
relatively low cost per head.
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Communications objectives
Interest
- communication needs to appeal to
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Communications objectives
Preference
- First Direct attempted to build a
preference for its telephone banking
service by asking its competitors
customers: tell us one good thing
about your bank.
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Communications objectives
Preference
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Communications objectives
Trial
- the behavioral stage often comes in two stage:
trail & adoption
- trial can be perceived as the encouragement of
consumers to interact
with the financial services
provider, perhaps to respond to an invitation to
call for an insurance quote. Consumers
may even
engage in a pseudo-trial of
the product based on
friends & relatives experiences of the product
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Communications objectives
Adoption
- adoption does not mark to the end of
communication with consumers. Having adopted
a financial product a consumer can terminate
the contract & switch to another financial
provider at any time. Thus, the role of
communication is still important reassured &
reminded of the benefits offered by the financial
institutions.
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Communications message
- Message is the key to the achievement of
communication objectives.
- Knowing what to say is important, since a single
message may not have the same level of
effectiveness or even produce the same desired
response from different segments of the market.
- In order to be effective, the message needs to
have a theme, appeal or unique selling
preposition. Appeals can be rational, emotional
& moral
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Communications message
Rational appeals
- Rational themes appeal to logical reasoning. In the context of
advertising financial services, rational appeals might focus on
the actual product or service, its features, quality, value,
performance, etc.
- due to a number of factors associated with the advertising of
financial services & consumers difficulties in effectively
evaluating them, it is not always possible to focus on product
features& technical aspects of offering. This is perhaps an
explanation why few financial services ads use rational
appeals, & those that do focus almost entirely on price or
delivery as part of the appeal.
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Communications message
Emotional appeals
- attempt to rouse negative/ positive
feelings in an attempt to motivate
individuals. Positive appeals may focus on
the use of humor, love or pride.
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Communications message
Emotional appeals
McKechnie et al & McKechnie & Leather (1998) investigated
factors influencing consumers likeability of financial services
television advertisement & the subsequent impact on their
behavior:
i. the commercial should be stimulating
ii. The context should be appealing & relevant
iii. The message should be targeted & fresh
iv. People in the commercial should appear authentic.
- The organization should be perceived as having a personal
touch & be able to communicate in a down-to-earth manner.
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Communications message
Emotional appeals
- Negative appeal focus on fear, guilt & shame in order to
motivate. According to Sternthal & Craig (1974), besides
humor fear is the most commonly used basis for
persuasion. Fear is powerful motivator & can influence
buying behavior. Marketing communications generally
attempt to inform consumers of the benefits of purchasing
&/ or using a product/ service
- Fear appeals generally have been used to modify social &
health-related behavior, for e.g. the Health Education
Board for Scotland makes extensive use of fear in its
campaign to encourage people to give up smoking, stop
taking drugs & take care in sun.
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Communications message
Examples of fear appeals
Financia Fear appeal
l product
Example
Mortgage
protection
Fear of
repossession of
property &
home
Pension
Fear of
impoverished
old age
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Communications message
Examples of fear appeals
Financial
product
Fear appeal
Example
Home
insurance
Life
assurance
Fear of leaving
dependants & loved
ones to fend for
themselves in an
uncertain future
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Communications message
Why fear is used in promoting financial services:
- Financial services are intangible entitles & are difficult to display
in advertising.
- Benefits are difficult to understand & difficult to communicate.
- Outcomes of products are often not known & therefore cannot be
communicated
- Financial products are high in credence qualities & many
consumers do not have the know-how to assimilate advertised
information.
- Lack of interest in many financial products has a negative impact
on advertising.
- Regulatory limitations of advertising reduce its effectiveness.
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Communications message
Why fear works in the promotion of financial services
- The future in uncertain & many consumers may have a
natural fear of their futures in a financial context.
- Many products have a legal obligation to buy, creating
a fear of stepping outside the law.
- Families with dependants will have a natural worry for
those they are responsible for.
- Fear can be induced psychologists have shown that
anxiety can be learned by observing another person
produce such a response (Bandura & Walters, 1963)
making advertising effective at inducing fear.
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Communications message
Moral appeals
- Work on an audiences sense of what is
right & wrong. In the financial services
sector success has been achieved in the
area of ethical investments, yet the Cooperative Bank is the only bank to have
positioned itself as an ethical financial
institution.
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Examples
Intangibility
Llyods Bank
Black
Horse.Norwich
Union Great
Wall of China.
Direct Line
Insurance
little red phone
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The
greater the
intangibility,
the greater
the need to
create
concretene
ss
Use physical
evidence &
artefacts such as
branches& other
delivery points.
Use concrete,
specific language
& symbols
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Characteristic Implications
s
Marketing
actions
Examples
Include both
the service
deliverer & the
customer in the
advertisement
Royal Bank of
Scotland
We know
where youre
coming from,
you know
where you
are
Heterogeneit
y
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Show the
AA Insurance
process &
insurance
scope of the
champions
service,
performance
records, etc. to
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gain credibility
Characteristic Implications
s
Marketing
actions
Examples
Contextuality
Highlight the
sequence of
events which
comprise the
service
experience
Barclaycard
loss of
property &
money
Direct Line
insurance
claims
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The greater
the specificity
of context, the
greater the
need to
characterize
the service
through the
illustration of a
sequence of
events
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Objectives of
Promotion
Provide
Information
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Objectives of
Promotion
Increase
Demand
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Objectives of
Promotion
Differentiate
the Product
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Objectives of
Promotion
Promotion can explain the greater
ownership utility of a product to
buyers, thereby
accentuating(noticeable or
prominent) its value and justifying
a higher price
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Accentuate
Products
Value
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Objectives of
Promotion
For the typical firm, sales
fluctuations may result from
cyclical, seasonal, or irregular
demand
Stabilizing these variations is
often an objective of promotional
strategy
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Stabilize
Sales
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Nonpersonal Selling
Advertising
Advertising
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Nonpersonal Selling
Sales
Sales promotion
promotion
Sales promotion: marketing activities
other than personal selling, advertising, and
publicity that stimulates consumer
purchasing and dealer effectiveness
(includes displays, trade shows, coupons,
premiums, contests, product
demonstrations, and various nonrecurrent
selling efforts)
Trade promotion: sales promotions aimed
at marketing intermediaries rather than
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Nonpersonal Selling
Direct
Direct marketing
marketing
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Nonpersonal Selling
Public
Public relations
relations
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Personal
Selling
Permits
measurementof
effectiveness.
Elicitsan
immediate
response.
Tailorsthe
messagetofit
thecustomer.
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Advertising
Sales
Promotion
Direct
Marketing
Public
Relations
Reachesalarge
groupofpotential
consumersfora
relativelylow
priceper
exposure.
Allowsstrict
controloverthe
finalmessage.
Canbeadaptedto
eithermass
audiencesor
specificaudience
segments.
Producesan
immediate
consumer
response.
Attractsattention
andcreates
product
awareness.
Allowseasy
measurementof
results.
Providesshort
termsales
increases.
Generatesan
immediate
response.
Coversawide
audiencewith
targeted
advertising.
Allows
complete,
customized,
personal
message.
Produces
measurable
results.
Createsa
positive
attitudetoward
aproductor
company.
Enhances
credibilityofa
productor
company.
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Advertising
Reliesalmost
exclusivelyupon
theabilityofthe
salesperson.
Involveshigh
costpercontact.
Doesnotpermit
totallyaccurate
measurementof
results.
Usuallycannot
closesales.
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Sales
Promotion
Direct
Marketing
Public
Relations
Isnonpersonal
innature.
Isdifficultto
differentiate
from
competitors
efforts.
Suffersfrom
image
problem.
Involvesahigh
costperreader.
Dependson
qualityand
accuracyof
mailinglists.
Mayannoy
consumers.
Maynot
permit
accurate
measurement
ofeffecton
sales.
Involvesmuch
effortdirected
toward
nonmarketing
orientedgoals.
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DEVELOPING AN OPTIMAL
PROMOTIONAL MIX
Nature of Market
Nature of Product
Stage in PLC
Price
Funds Available
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PersonalSelling
Advertising
Natureofthemarket
Numberofbuyers
Geographic
concentration
Typeofcustomer
Limitednumber
Concentrated
Businesspurchaser
Largenumber
Dispersed
Ultimateconsumer
Natureoftheproduct
Complexity
Service
requirements
Typeofgoodor
service
Useoftradeins
Stageintheproductlife
cycle
Custommade,complex
Considerable
Business
Tradeinscommon
Standardized
Minimal
Consumer
Tradeinsuncommon
Oftenemphasizedateverystage;
heavyemphasisinthe
introductoryandearlygrowth
stagesinacquaintingmarketing
intermediariesandpotential
consumerswiththenewgoodor
service
Oftenemphasizedateverystage;
heavyemphasisinthelatterpart
ofthegrowthstage,aswellas
thematurityandearlydecline
stages,topersuadeconsumersto
selectspecificbrands
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Highunitvalue
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Lowunitvalue
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PULL VS PUSH
PROMOTIONAL STRATEGIES
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AIDA
Model
of
Promotion
Attention
Attention
Interest
Use the
appropriate
promotional
tools:
Dont try to do it
all
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3053 ad!
with
Desire
Action
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AIDA is a linear
process:
You must capture
attention
before you can
develop
interest, interest
must be
developed before
desire, etc.
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Description
Example
Percentageofsales
method
Promotionalbudgetissetasa
Lastyearwespent$10,500onpromotion
specifiedpercentageofeitherpastor andhadsalesof$420,000.Nextyearwe
forecastedsales.
expectsalestogrowto$480,000,andweare
allocating$12,000forpromotion.
Fixedsumperunit
method
Promotionalbudgetissetasa
predetermineddollaramountfor
eachunitsoldorproduced.
Meetingcompetition Promotionalbudgetissettomatch
competitorspromotionaloutlayson
method
Ourforecastcallsforsalesof14,000units,
andweallocatepromotionattherateof$65
perunit.
Promotionaloutlaysaverage4percentof
salesinourindustry.
eitheranabsoluteorrelativebasis.
Taskobjective
method
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Oncemarketersdeterminetheir
specific,promotionalobjectives,the
amount(andtype)ofpromotional
spendingneededtoachievethemis
determined.
Bytheendofnextyear,wewant75percent
oftheareahighschoolstudentstobeaware
ofournew,highlyautomatedfastfood
prototypeoutlet.Howmanypromotional
dollarswillittake,andhowshouldtheybe
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Public Relations
Highly credible
Many forms: news stories, news features,
events and sponsorships, etc.
Reaches many prospects missed via other
forms of promotion
Dramatizes company or benefits
Often the most underused element in the
promotional mix
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