Slide 18-7

FIGURE 18-1 The communication process

Promotion mix
Promotion Mix (P.467)

3
Marketing
Communications
Mix or
(Promotion mix)
Advertising
Personal selling
Sale promotion
Public relations
Customer
Direct marketing


4
Consistent,clear,and
compelling company
and product
Messages.
Advertising
Personal
selling
Sales
promotion
Public
relations
Direct
marketing

Integrated marketing communications(P.470)
Slide 18-15
FIGURE 18-2 The promotional mix
Promotion
Promotion are communication activities by the
company that inform potential consumers
about the existence of goods, services, or ideas
and persuade them to buy.
There are specific promotional tool that are
supporting chosen promotional goal. The
promotion mix represents a combination of
different promotional tools.
The basic elements of promotional mix are
Advertising, Public Relationship, Personal Sales
and Sales Promotion.

Promotion Mix
1. Advertising:
Advertising is a paid, non personal
communication used in the promotion of a cause,
idea, product or service by an identified sponsor.
The various advertising delivery methods include
banners at sporting events, billboards, Internet
Web sites, logos on clothing, magazines,
newspapers, radio spots, and television
commercials.
Among the common forms of advertising are
advocacy, comparative, cooperative,
informational, institutional, persuasive, product,
reminder, point-of-purchase, and specialty.
2. Personal Selling:
Personal selling is considered one of the
most effective promotional techniques
because it facilitates interaction
between consumer and seller.
Personal selling activities can generate
long-lasting friendships between
consumers and sellers that typically
generate many repeat purchases.
Examples: Automobiles, Life insurance, Real
estate, and many industrial products.
3. Public Relations:
PR is a profession that includes the functions
of communication, community relations,
crisis management, customer relations,
employee relations, government affairs,
industry relations, investor relations, media
relations, mediation, publicity, speech-
writing, and visitor relations.
There are many areas of public relations, but
the most recognized are financial public
relations, product public relations, and crisis
public relations.

i. Financial public relations - providing
information mainly to business reporters.
ii. Product public relations - gaining publicity for
a particular product or service (rather than
using advertising).
iii. Crisis public relations - responding to negative
accusations or information.
4. Sales Promotion:
Sales promotions are marketing practices
designed to facilitate the purchase of a
product that do not include advertising,
personal selling, or public relations.
Companies use sales promotion for a variety of
reasons;
(1) to attract new product users who will
hopefully turn into loyal consumers who keep
buying the product;
(2) to reward existing consumers with a price
reduction, thereby maintaining their loyalty;
and
(3) to encourage repeat sales from occasional
consumers.


Slide 18-23
Factors that influence the use of
promotional tools or (factors deciding
promotion mix)
Slide 18-28
Promotional mix used over the product life
cycle
Slide 18-34
Promotional mix used for Channel
strategies
Channel Strategies
Push Strategy
Pull Strategy

Slide 18-35
FIGURE 18-5 A comparison of push and pull
promotional strategies
Factors that influence or decide the
Promotional Mix:
a) Nature of the market (target market)
b) Nature of the product (product
Characteristics)
c) Stage in the product life-cycle
d) Price
e) Funds available for promotion
f) Consumer buying process
g) Channel strategies

a) Nature of the market (Target market)
Personal selling may prove effective with a market
composed of a limited number of buyers
Advertising is more effective when a market has
large numbers of potential customers scattered
over sizable geographic areas
Personal selling often works better for
intermediary target markets
b) Nature of the product (product characteristics)
Highly standardized products with minimal servicing
requirements usually need less personal selling than
custom products with complex features and/or
frequent maintenance needs
Consumer products are more likely to rely heavily on
advertising than are business products
c) Stage in the product life-cycle
Promotional mix must be tailored to the products stage in
the product life-cycle
In the introductory stage, there is a heavy emphasis on
personal selling to the intermediaries
However, advertising and sales promotion help to create
awareness and stimulate initial purchases
In the growth and maturity stages, advertising gains
relative importance
Personal selling efforts at marketing intermediaries to
expand distribution is continued
In the maturity and early decline stages, firms frequently
reduce advertising and sales promotion expenditures

d) Price
Advertising dominates the promotional mix for
low-unit-value products due to the high personal
contact costs of personal selling
Consumers a high-priced items like luxury cars
expect lots of well-presented information via
videocassettes, CDs, fancy brochures, and
personal selling

e) Funds available for promotion
A critical element in the promotional strategy is
the size of the promotional budget
Indian Premier League would generate a revenue
of $ 1 billion this season to Sony Entertainment
(about Rs4,700 crore). It expected to deliver
Rs700 crore (last year 450 crore)in advertising
revenue for the network.


What is Advertising?
Paid form of non personal presentation and
promotion of ideas, goods, or services by an
identified sponsor.
U.S. advertisers spend in excess of $175 billion
each year.
Advertising is used by:
Business firms,
Nonprofit organizations,
Professionals,
Social Agencies.
Major Decisions in Advertising
Objectives Setting
Budget Decisions
Message Decisions
Campaign Evaluation
Media Decisions

Informative Advertising
Build Primary Demand

Setting Objectives
Persuasive Advertising
Build Selective Demand
Comparison Advertising
Compares One Brand to
Another
Advertising Objectives
Specific Communication Task
Accomplished with a Specific Target Audience
During a Specific Period of Time
Reminder Advertising
Keeps Consumers Thinking
About a Product.
Click to add title
Plan a Message Strategy
General Message to Be Communicated to Customers
Advertising Strategy
Creating Advertising Messages


Develop a Message
Focus on
Customer Benefits





Creative Concept
Big Idea
Visualization or Phrase
Combination of Both




Advertising Appeals
Meaningful
Believable
Distinctive


Advertising Strategy
Message Execution
Typical
Message
Execution
Styles
Testimonial
Evidence
Slice of Life
Scientific
Evidence
Lifestyle
Technical
Expertise
Fantasy
Musical
Personality
Symbol
Mood or
Image
Turning the Big Idea Into an Actual Ad to Capture the Target Markets
Attention and Interest.
Advertising Strategy
Selecting Advertising Media

Step 1. Decide on Reach, Frequency,
and Impact

Step 2. Choosing Among Major Media Types
Media Habits of Target Consumers
Nature of the Product
Type of Message
Cost

Step 3. Selecting Specific Media Vehicles
Specific Media Within a Given Type, i.e. Magazines.
Must Balance Media Cost Against Media Factors:
Audience Quality & Attention, Editorial Quality
Step 4. Deciding on Media Timing
Scheduling of Advertising Over the Course of a Year
Pattern of Ads: Continuity or Pulsing
What is Sales Promotion?
Mass communication technique that offers
short-term incentives to encourage purchase or
sales of a product or service.

Rapid growth in the industry has been achieved
because:
Product managers are facing more pressure to
increase their current sales,
Companies face more competition,
Advertising efficiency has declined,
Consumers have become more deal oriented.
Sales Promotion
Major objects of sales promotion
29
Consumer
promotion
Trade
promotion
Sales force
promotion
Consumer
promotion
CONSUMER SALES PROMOTION
TECHNIQUES
Loyal Reward Program: Consumers collect points, or
credits for purchases and redeem them for rewards.
Price-off : Offers a brand at a lower price. Price
reduction may be a percentage marked on the
package.
Price-pack deal: The packaging offers a consumer a
certain percentage of price reduction
Extra offer: for example, 25 percent extra
Coupons: coupons have become a standard
mechanism for sales promotions.
Loss leader: the price of a popular product is
temporarily reduced in order to stimulate other
profitable sales
Free-standing insert (FSI): A coupon booklet is inserted into the
local newspaper for delivery.
On-shelf couponing: Coupons are present at the shelf where the
product is available.
On-line couponing: Coupons are available on line. Consumers
print them out and take them to the store.
Mobile couponing: Coupons are available on a mobile phone.
Consumers show the offer on a mobile phone to a salesperson
for redemption.
Online interactive promotion game: Consumers play an
interactive game associated with the promoted product.
Rebates: Consumers are offered money back if the receipt and
barcode are mailed to the producer.
Contests/sweepstakes/games: The consumer is automatically
entered into the event by purchasing the product.
Point-of-Purchase
Displays
Consumer - Promotion Tools
Premiums
Price Packs
Cash Refunds
Coupons
Samples
Short-Term Incentives to Encourage Purchase
or Sales of a Product or Service.
Consumer-Promotion
Objectives
Consumer-Promotion Tools
Patronage
Rewards
Games
Sweepstakes
Contests
Advertising
Specialties
Patronage
Rewards
Entice Consumers to
Try a New Product
Lure Customers Away
From Competitors Products
Get Consumers to Load Up
on a Mature Product
Hold & Reward Loyal
Customers
Consumer Relationship
Building

Specialty
Advertising
Items
Trade - Promotion Tools
Contests
Free Goods
Buy-Back
Guarantees
Allowances
Price-Offs
Short-Term Incentives That are Directed to
Retailers and Wholesalers.
Trade-Promotion
Objectives
Trade-Promotion
Tools
Patronage
Rewards
Push Money
Discounts
Premiums
Displays
Persuade Retailers or
Wholesalers to Carry a Brand
Give a Brand Shelf Space
Promote a Brand in
Advertising
Push a Brand to Consumers

Business - Promotion Tools
Short-Term Incentives That are Directed to
Industrial Customers.
Business-Promotion
Objectives
Business-Promotion Tools
Generate Business Leads
Stimulate Purchases
Reward Customers
Motivate Salespeople

Conventions
Trade Shows
Sales Contests
Decide on the Size of the Incentive
Set Conditions for Participation
Evaluate the Program
Determine How to Promote and
Distribute the Promotion Program
Determine the Length of the Program
Developing the Sales Promotion
Program
What is Public Relations?
Building good relations with the companys various
publics by obtaining favorable publicity, building up a
good corporate image and handling or heading off
unfavorable rumors, stories and events.
Major functions are:
Press Relations or
Product Publicity
Public Affairs
Investor Relations
Development
Special
Events
Written
Materials
Corporate
Identity
Materials Speeches
News
Audiovisual
Materials
Major Public Relations Tools
Public
Service
Activities
Web Site
Click to add title
Setting Public Relations Objectives
Choosing the Public Relations Messages
and Vehicles
Implementing the Public Relations Plan
Evaluating Public Relations Results
Major Public Relations Decisions




ADVERTISING AGENCIES
Advertising Department Under
Centralized System
President
Production Finance Marketing
Research and
Develop-ment
Human
Resources
Advertising
Marketing
Research
Sales
Product
Planning
More
Control
Cost
Savings
Better
Coordination
Less
Objectivity
Less
Experience
Less
Objectivity
Less
Experience
Better
Coordination
More
Control
Cost
Savings
Pros & Cons of In-House Agencies
The
In-house
Agency
+ Positive - Negative
Less
Flexibility
Better
Coordination
More
Control
Cost
Savings
Less
Objectivity
Less
Experience
Better
Coordination
More
Control
Cost
Savings
Less
Flexibility
Less
Objectivity
Less
Experience
Better
Coordination
More
Control
Cost
Savings
Most No Fear advertising is done by their in-house
agency
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
+
Artists
Ad Agencies Have Skilled Specialists
Writers Researchers
Photographers Media Analysts Other Skills
Creating advertising
Planning advertising
Producing
advertising
Performing research
Selecting media
Planning advertising
Creating advertising
Producing
advertising
Performing research
Selecting media



Full-Services Agencies

Full Range of
Marketing
Communication and
Promotion Services
Typical Full-Service Agency Organization
Writers
Art Directors
Traffic
TV
Produciton
Traffic
Print
Production
VP Creative
Services
Account
Executive
Account
Supervision
VP Account
Services
Media Research
Sales
Promotion
VP Marketing
Services
Personnel Accounting Finance
Office
Management
VP Management
and Finance
President
Board of
Directors
Services Provided by Agencies
Agency Services
The link between
agency and client
Managed by the
Account Executive
Research
department may
design and execute
research programs
Media department
may analyze, select
and contract media
resources
Creation and
execution of ads
Copywriters,
artists, other
specialists
Marketing
Services
Account Service Creative Services
Marketing
Services
Account Service
The link between
agency and client
Managed by the
Account Executive
Research
department may
design and execute
research programs
Media department
may analyze, select
and contract media
resources
Creation and
execution of ads
Copywriters,
artists, other
specialists
The Role of Creative Boutiques

Creative
Boutiques
Provide Only Creative Services
Full-Service Agencies May Subcontract
With Creative Boutiques
Provide Only Creative Services
Full-Service Agencies May Subcontract
With Creative Boutiques
Other Functions Provided by the
Internal Client Departments
An advertising agency or ad agency is a service business
dedicated to creating, planning and handling advertising (and
sometimes other forms of promotion) for its clients.

An ad agency is independent from the client and provides an
outside point of view to the effort of selling the client's
products or services.

An agency can also handle overall marketing and branding
strategies and sales promotions for its clients.

Typical ad agency clients include businesses and corporations,
non-profit organizations and government agencies. Agencies may
be hired to produce an advertising campaign.



Introduction
History
1812 - George Reynell, an officer at the London Gazette,
set up what is believed to be the first advertising agency in London, UK.


1850 - Volney B. Palmer opened the first American advertising agency.


1864 -William James Carlton began selling advertising space in religious magazines.


1868 - James Walter Thompson joined in religious magazines.
Types of advertising agencies
Limited-Service Advertising Agencies

Specialist Advertising Agencies

In-House Advertising Agencies

Interactive agencies

Search engine agencies

Social media agencies

Healthcare communications agencies

Medical education agencies

Other agencies


Agency Departments
Creative department

Account services

Media services

Production

Other departments and personnel

Advertising Agency Functions

Account Management

Creative Team

Researchers

Media Planners

Account management
Within an advertising agency the account manager or
account executive is tasked with handling all major
decisions related to a specific client. These
responsibilities include locating and negotiating to
acquire clients. Once the client has agreed to work
with the agency, the account manager works closely
with the client to develop an advertising strategy
Creative team
An agencys creative team consists of specialists in
graphic design, film and audio production,
copywriting, computer programming, and much more
Researchers
Full-service advertising agencies employ market
researchers who assess a clients market situation,
including understanding customers and competitors, and
also are used to test creative ideas.
Media planners

Once an advertisement is created, it must be placed
through an appropriate advertising media. Each
advertising media, of which there are thousands, has its
own unique methods for accepting advertisements, such
as different advertising cost structures (i.e., what it
costs marketers to place an ad), different
requirements for accepting ad designs (e.g., size of ad),
different ways placements can be purchased (e.g.,
direct contact with media or through third-party
seller), and different time schedules (i.e., when ad will
be run). Understanding the nuances of different media
is the role of a media planner, who looks for the best
media match for a client and also negotiates the best
deals.

Advertising Trends


Digital Convergence

Audience Tracking

Ad Skipping and Blocking

Changing Media Choices







Top 50 Companies
Adbur Pvt Ltd
Akshara Advertising
Ambience D'arcy
Chaitra Leo Burnett Pvt Ltd
Contract Advertising (India) Ltd
Crayons Advertising and Marketing Pvt Ltd
Creative Advertising
Enterprise Nexus Communications Pvt. Ltd
Euro RSCG Advertising Pvt Ltd
Everest Integrated Communications Limited
Equus Advertising Co Ltd
FCB-Ulka Advertising Ltd
Fountainhead Communications Pvt Ltd
Fortune Communications Ltd
Hindustan Thompson Associates
Hakuhodo Percept
IB&W
Interface Communications Limited
Interact Vision Advertising & Marketing Pvt Ltd
Imageads
Jelitta Publicity
Kamerad-news
Graphisads Pvt Ltd
Mudra Communications Ltd
McCann-Erickson India Ltd
MAA Bozell Communications Ltd
Madison Advertising Pvt Ltd
Marketing Consultants & Agencies Ltd
MCS Communications Pvt Ltd





Moulis Euro RSCG (I)Pvt Ltd
National Advertising Agency
Ogilvy & Mather Ltd
Pressamn Advertising and Marketing Ltd
Percept Advertising Ltd
Publicis Zen Communications Pvt Ltd
Purnima Advertising Agency
Quadrant Communications Ltd
Rediffusion-DY&R
RK Swamy/BBDO Advertising Ltd
Ram Advertising Service
Rashtriya Advertising Agency
Saatchi & Saatchi Pvt Ltd
SSC & B Lintas Ltd
Sasi Advertising Pvt Ltd
Trikaya Grey Advertising (India) Ltd
Triton Communications Pvt Ltd
TBWA Anthem Pvt Ltd
Ushak Kaal Advertising Pvt Ltd
Urja Communications Pvt Ltd
Lintas India Ltd
Market Missionaries (India) Pvt Ltd
Coca Colas in-house boutique
created this popular spot
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
+
Specialize in Buying Media, Especially
Broadcast Time
Agencies and Clients Develop Media
Strategy
Agencies and Clients Develop Media
Strategy
Specialize in Buying Media, Especially
Broadcast Time
Media Buying Can Be Specialized
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Media Buying
Services
Media Buying Organizations Implement
the Strategy and Buy Time and Space
Commissions
Method
Cost-Plus
Agreements
Percentage
Charges
Fee
Arrangements
Incentive-Based
Payment
Commissions
Method
Cost-Plus
Agreements
Percentage
Charges
Fee
Arrangements
Methods of Agency Compensation
2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
Compensation
Methods
Commissions
Method
Cost-Plus
Agreements
Poor
performance
Poor
communications
Unrealistic
demands
Personality
conflicts
Personnel
changes
Changes
in size
Conflict of
interests
Changes
in strategy
Declining
sales
Payment
conflicts
Policy
changes
Poor
performance
Poor
communications
Unrealistic
demands
Personality
conflicts
Personnel
changes
Changes
in size
Conflict of
interests
Changes
in strategy
Declining
sales
Payment
conflicts
Why Agencies Lose Clients
Poor
performance
Personnel
changes
Changes
in strategy
Unrealistic
demands
Personality
conflicts
Changes
in size
Poor
performance
Personnel
changes
Changes
in strategy
Policy
changes
Declining
sales
Payment
conflicts
64
Chap. 15 Marketing 7e Lamb Hair McDaniel
2004 South-Western/Thomson Learning
Advertising Campaign
A series of related
advertisements focusing
on a common theme,
slogan, and set of
advertising appeals.
3
65
Chap. 15 Marketing 7e Lamb Hair McDaniel
2004 South-Western/Thomson Learning
Steps in Creating an
Advertising Campaign
Determine the
advertising objectives.
Make creative Ad decisions.
Make media decisions.
Evaluate the campaign.
3
66
Chap. 15 Marketing 7e Lamb Hair McDaniel
2004 South-Western/Thomson Learning
Setting Objectives:
The DAGMAR Approach
Define
Target Audience
Define Desired
Percentage Change
Define the Time Frame
for Change
Goal of
Advertising
Objectives
3
67
Chap. 15 Marketing 7e Lamb Hair McDaniel
2004 South-Western/Thomson Learning
Creative Decisions
Components
of
Creative
Decisions
Develop and Evaluate
Advertising Appeals
Execute
the Message
Evaluate the
Campaigns Effectiveness
Identify
Product Benefits
3
68
Chap. 15 Marketing 7e Lamb Hair McDaniel
2004 South-Western/Thomson Learning
Advertising Appeal
Reason for a person
to buy a product.
3
69
Chap. 15 Marketing 7e Lamb Hair McDaniel
2004 South-Western/Thomson Learning
Common Advertising Appeals
Profit
Health
Love or romance
Fear
Admiration
Convenience
Fun and pleasure
Vanity and egotism
Environmental
Consciousness
Product saves, makes, or protects money
Appeals to body-conscious or health seekers
Used in selling cosmetics and perfumes
Social embarrassment, old age, losing health
Reason for use of celebrity spokespeople
Used for fast foods and microwave foods
Key to advertising vacations, beer, parks
Used for expensive or conspicuous items
Centers around environmental protection
3
70
Chap. 15 Marketing 7e Lamb Hair McDaniel
2004 South-Western/Thomson Learning
Unique Selling Proposition
Uniqueness from
competitors, Desirable,
exclusive, and believable
advertising appeal selected
as the theme for a
campaign.
3
Jingles
71
Chap. 15 Marketing 7e Lamb Hair McDaniel
2004 South-Western/Thomson Learning
Executing the Message
Mood or
Image
Musical
Demon-
stration
Scientific
Real/
Animated
Product
Symbols
Fantasy
Lifestyle
Slice-of-Life
Humorous
Common
Executional
Styles
Spokes-
person/
Testimonial
Goodyear
Dockers
3
72
Major Types of Advertising Media
Newspapers
Magazines
Radio
Television
Outdoor Media
Internet
Alternative Media
4
Advertising Appeals
Genre of message appeal
Means of gaining attention, breaking through
the clutter
Depends on goals, product, target audience
Demographics & psychographics
Keep persuasive goals in mind
Some ads very creative but ineffective
Appeals
Demonstration
Show audience how product works
Infomercials (longer commercials)
Fitness gear
Testimonial
Client speaks of product benefits
Appeals
Emotion/sentimental
Inflated emotions related to the product
Hallmark

Fear
Scare audience away from the product or behavior, or
toward it
Just say no
Baldness, hair restoration
Appeals
Celebrity Endorsement
Tie product image to famous person
MJ & Jackie Chan for Hanes
Urgency
Need to respond/act quickly
Sale Ends Saturday!
2-days only!
Disney DVDs will not be available for 10
years!

Appeals
Humor
Associate humor with product image
Often memorable, not always effective
Slice of Life
Problem/solution in a story form
Detergent, dandruff, slice and bake cookies

Appeals
Dramatize problem
Then offer solution
Dramatize benefit
As the solution
Sprint - Hear a pin drop
Appeals
Shock!
Jar audience
Anti-drug/smoking


Sex
Associate product with sexual satisfaction / conquest
Calvin Klein, cologne, Cosmo, Maxim

Appeals
Before / After
Demonstrate specific results of using product
Grecian formula, weight loss

Image
Associate product with some image, style, attitude
coolness
Product benefits, attributes are secondary to the image
Cadillac, Nike
Advertising budget
1.Percentage sales method
2.Unit sales method
3.Objective Based method
4.Historical method
5.Elastic Method
6.Ideal campaign method
7.Competitive Parity method
8.Per capita method