Chapter 10

Promotion (Integrated marketing

communication)
THE NATURE OF MARKETING COMMUNICATION
- Primary purpose of marketing communication:
o To inform (about the product, place and price), persuade (that the product
meets their needs) or influence consumer behaviour.
- Communication role:
o Key role in positioning an organisation and its services in the market
o Adds value to service itself
 General appearance of a service outlet can “communicate” the image
of an organization. The delivery vehicle and the courtesy of the
delivery vehicle driver can also impact customer perception

COMMUNICATION OBJECTIVES
- Most focus on customer, but can also focus on intermediaries.
- Objectives targeted at intermediaries: persuading them to deliver a new/re-launched
service.

To build awareness To communicate the

To differentiate the
and create an interest benefits of the service
service offering from
in the service product offering and the
competitive offerings
and/or organisation positioning strategy

To build and maintain

To develop and To persuade
the overall image and
enhance the brand customers to buy or
reputation of the
and its image use the service
service organization

To remind customers
to use the service
regularly
COMMUNICATION PROCESS
- The elements of the communication process:

Objective: Source:
•Can be to inform/persuade/remind customers of •The service org that communicates the message is
the service. Org should translate the objective into the communication source/sender of the message.
a workable idea and then transform it into a Credible source? More likely to get a response.
communication message

Message encoding: Medium:

•Done by putting ideas, thoughts, and objectives •Transmitted through a communication channel
into words, pictures and symbols. such as print media, broadcast media,
•Has to grab attention interpersonal communication and outdoor
•Use an understandable and acceptable language advertising.
•Focus on needs of target market •Print format = more useful when service in
entertainment park are being broadcast
•Suggest how needs may be met by utilising the
org services. •Voice format = more useful when tax advisory
service wants to remind people of tax
submissions.

Audience decodes message: Distraction

•As soon as the message is received, it is decoded •Interference may occur between encoding and
•Decoding: Process by which the audience assigns decoding of the message due to poor
meaning to the words, pictures and symbols interpretation of the message.
received

Audience response:
•Type of response expected will influence the
choice of message and channel of communication.
•Ultimately it would lead to a customer making a
purchase.
•Can be expressed in terms of quantity purchased,
frequency of the purchase or even non purchase.
COMMUNICATION MIX
- Refers to the combination of the communication mix elements that an organisation
uses to communicate with its target market.
- 1) ADVERTISING:
o Advertising: Mass, paid communication which is used to transmit information,
influence attitudes and induce some form of response on the part of the
audience.
 Purpose: to bring a response by providing information to potential
customers.
 Useful when using metaphors, logos, symbols etc. to create an
impression of the service organisation
o Service advertising has five roles:

To integrate the needs,

To introduce and describe values and attitudes of
To build a “personality” for
the service org. to the customers with the
the org.
customer capabilities of the service
org.

To motivate the service To motivate the service

organisation’s personnel organisation’s personnel
to support the marketing to support the marketing
effort and to serve effort and to serve
customer’s appropriately. customer’s appropriately.

o Advertising appeals:
 The marketer has to design an appropriate message for the target
audience, to realise the desired objectives of the advertising campaign.
 The task of an advertising agency’s creative task:
 To develop the style, tone, wording and format that will
produce the optimal effect.
 Advertising appeals to generate a message for the audience:

Emotional messages:
Rational messages: provide
attempt to evoke an
the target audience with Moral messages: evoke Competitive advantage
emotion among the target
important, factual feelings of “right” and messages: have the goal to
audience and usually
information and usually “wrong” from the target position the service offering
humour fear, sadness, pride
emphasise benefits, price, audience and may often in the mind of the target
or happiness appeals. Use
quality, value, service have a commanding or audience in relation to
more music, scenic, beauty,
guarantee, service righteous tone. E.g. anti- competition. (useful for new
children or animals. Show
excellence, service drug advertisements. services)
brand infrequently/only at
availability or characteristics
the end.
 o Media decisions in advertising:
 The advertising planner should compile a media-mix that is most likely
to reach the target market.
 Reach: the number of people exposed to an advertising message or
campaign.
 Frequency: the number of times an individual/particular target
audience is exposed to an advertising message.
 Most common type of media channels:

Outdoor advertising: include billboards,

Newspapers: local newspapers have the
posters as well as advertising on buses and
advantage of geographical segmentation
taxis

Television: more expensive in terms of

media costs and in terms of the cost of
producing the advertisement than other Radio: makes local segmentation possible
media. Enhanced by its ability to appeal to and has lower production cost than
the senses of both sight and sound, and to television. Advantage: audience can be
use colour and movement to develop a involved in other activities (driving) while
sales message. Limitation of not being able being exposed to an ad.
to segment audiences in terms of
geographical areas.

Transit advertising: advertising that

Cinema: frequently used to promote local appears inside and outside of public
services such as food outlets and can be transport vehicles. (Moving billboards).
very useful for supporting press and Only effective if people in the vehicle are
television advertising. the org. target market or the vehicle drives
in the right area.

SMS and email: Short message system

(SMS) and email ads are cost-effective, high
response rate mediums that can help
business acquire and retain customers, sell
and promote products, drive loyalty and
reinforce branding efforts. Info sent must
be permission-based, relevant and
meaningful. Advantage: instant delivery
with a high open and conversion rate.
 - 2) SALES PROMOTION:
o Sales promotion: a variety of activities with the common purpose of
stimulating customer buying behaviour, especially in the short term.
 Popular among frequently bought services with a low perceived risk,
enabling price differentiation.
o Characteristics of effective sales and promotion tools:

Stimulate Provide Enhance the

Beneficial to positive Help the
tangible cues overall Encourage
both internal word-of- customer to
to the messages of customer
and external mouth understand
service the service loyalty
customers communicati the service
offering organisation
on

o Sales promotion activities can be targeted at customers, intermediaries and/or

the sales force.

o Sales promotion tools:

 Coupons and group-ons:
 Coupons: certificates entitling the bearer to discount on the
purchase of a specific product.
o Low brand loyalty? Use coupons as a means of
persuading customers to switch products.
 Group-on: middleman service that promotes service on behalf
of a service provider, for which commission is earned whenever
a customer has been referred successfully
 Sampling: Gives customers the opportunity to experience the actual
service free-of-charge (in small quantities or for a short duration)
 Used less frequently for services than for consumer package
goods.
 Premiums (or “give-away” items):
 Premiums: free merchandise or additional services offered
when purchasing a particular service.
o Do not consist of the actual service product, but may be
complementary to the service.
 Competitions: Adds to the value of the total offer.
 Can fulfil several roles: encouraging trial and/or use, launching
a new service, smoothing seasonal demand, raising awareness
and increasing sales.
 Purpose: attracting new users of reward existing new users.
  Price discounts: discounts/price reductions
 Frequency programmes: long term sales promotions targeted at
current customers. Designed to build repeat purchase behaviour and
brand loyalty by rewarding customers for their long term patronage.
Can turn into loyalty programmes.
 Bonuses and awards: sales and bonuses can be used to stimulate sales
among sales personnel during periods of low demand or to develop
loyalty among intermediaries. Competition can serve as a powerful
motivator to promote the service offering.

- 3) PERSONAL SELLING:

o Personal selling: a promotional tool used by salespeople to engage customers

using skills and techniques to convince them to purchase the service by
demonstrating the ways in which the service will meet their needs.
 Takes place via sales reps that are the link between the customer and
the service organisation.
 Advantages: Provides an opportunity for cross-selling other, related
services, and enhances the level of customer satisfaction is managed
properly
 Satisfaction creates an opportunity for relationship building
o Differences between selling physical goods and selling services:

Customers’ perception of
Service purchasing is the service organisation is
sometimes a less pleasant an important factor when
buying experience deciding to purchase a
service

Customers attach particular

Customers are influenced
importance to the level of
by personal
support received from a
recommendations to a
particular salesperson,
greater extent than by
especially the salesperson’s
advertising.
attitude and personality.

Customer involvement is of
Customers may do fewer more importance when
price comparisons when purchasing services
purchasing services compared to physical
products/
o Stages of personal selling:
 Stage 1: Preparation and planning
 Finding potential customers (use leads from suppliers, referrals
and records).
 Cold-call leads: obtained from local newspapers and trade
directories
 Warm-call leads: bringing together buyers and sellers in a non
“hard-sell” environment. (Seminars/workshops)
 Stage 2: Sales presentation
 Salespeople should receive effective training in terms of selling
and presentation. (shouldn’t overpromise and create
unrealistic expectations)
 They should be trained to ask questions and become active
listeners when dealing with prospective clients. (not to
overwhelming)
 Shouldn’t overemphasise the price of the service, but should
allow a potential customer to contrast the overall costs with
the overall benefits.
 Stage 3: Negotiations and closing
 Two important elements in any negotiation: handling of
objections and closing.
 Train salespeople to handle rational/irrational objectives and
techniques on these.
 Different ways to handle objection:
o Agree with objection
o Turn objection into another selling point
o Agree that objection is valid and modify proposal
o Delay answering the objection until later stage
o Show objection to be invalid
o Ask for further explanation of objection
 Closing the sale needs experience and skill from the
salesperson in terms of how and when to close the sale
 Stage 4: Follow-up
 Neglected, but essential to ensue customer satisfaction and
repeat business.
 Letter of appreciation for the business or a phone call can help
reduce customer uncertainty about purchase.
 Basis of long term growth and profitability is to manage the
relationship in order to maximise the likelihood of retaining the
customer.
 - 4) PUBLIC RELATIONS:
o Indirect promotional tool with the purpose of establishing and enhancing a
positive image of an organisation and its services amongst its various
stakeholders.
o Dealt with at the corporate level of marketing management.
o Can be distinguished from customer relationship building in that its influence
reaches beyond the creation of mutually beneficial relationships with actual or
potential customers
o Additional audiences (publics/stakeholders)

Suppliers: need reassurance that

Intermediaries: e.g. sales agents
the service org will honour
need reassurance concerning the Employees: in addressing them,
contractual agreements.
service offerings of the org. (Can they use tools such as in-house
(Conveyed through favourable
be cultivated by using the org. publications, newsletters and
annual reports, positive public
newsletters in trade journals/other employee recognition programmes
reputation, testimonial type
media)
advertising.

Investors: communication is
Government: develop
targeted at both current and Local communities: enhance the
relationships at both local and
potential investors, including image of the org by means of
national level. Communication may
individuals and financial charitable contributions,
include lobbying with legislators
institutions. They need sponsorship of local events such as
and sponsoring government
reassurance that the org. will for the disabled
events.
realise its stated objectives.

o Public relations tools: (best suited to creating awareness of and/or liking for an
organisation’s services and tend to be less effective in directly influencing
sales
 Events: to attract media attention or to build corporate image (press
conferences, seminars, public speeches etc.)
 Lobbying: to influence legislators and government officials to
promote/oppose legislation and regulation.
 Purpose: to informs and influence key decision-makers who
may be critical in allowing elements of a marketing plan to be
implemented.
 Publications: annual reports, brochures, magazines, newsletters (can
be in-house newsletters distributed to customers/potential
customers), posters etc.
 News-based magazine format = more credible message than if
it were presented as a straight forward ad.
  Publicity: objective source of info that is particularly influential.
 E.g. media releases (used to announce new service
launches/new appointments)
 E.g. media conferences (used when a major event is to be
announced – good two-way communication between org and
media)
 Sponsorship: investment in events or causes.
 Helps org realise objectives such as increased awareness levels.
 Allows an event or activity being sponsored to enhance the
image of its intangible service.
 Crisis management: Crisis may be one-time/long running.
 4 essential elements expected when dealing with a crisis:

Describe risk Identify cause

Describe action
accurately in of risk and Management
to be taken to
terms of its demonstrate to must carry out
decrease the
effect on each public that org a plan of action
risk
customer will rectify it.

- 5) DIRECT MARKETING:
o An interactive system of marketing which uses one or more media in acquiring
a measurable response at a given location
o Direct marketing messages: “call this toll free number”, “click this link to
subscribe”. Easy to know how effective the marketing is.
 General advertising: does not call for a specific response. Difficult to
know how effective the advertising is.
o Purpose: to create, build and maintain a direct relationship between service
providers and their customers.
o Advantage: the personal way in which the initial contact is established and
subsequently maintained.
o Success depends on quality and availability of a database and a mailing list.
o Database can be used to market to existing customers, to up sell, cross sell or
simply increase sale by means of incentive schemes.
o Direct marketing media:
 Telemarketing:
 Using the telephone – medium characterised by immediacy
 Receiving messages = inbound telemarketing
 Transmitting messages = outbound telemarketing.
 Effectiveness can be assessed by measuring cost per telephone
call and hour and the number of quality enquiries received
 Direct mail:
 Very useful when targeting specific groups of private or
business customers
 Requires high degree of creativity to be successful
 Used to realise number of potential objectives such as keeping
prospects interested and improving the effectiveness of
salespeople
 E-mail marketing:
 Can reach a wide audience in a short time period.
 Very cost effective.
 Measurable by tracking the open-up, click through and
conversation rates of recipients, allowing the org to evaluate
campaign success
 Direct response print, radio and television:
 Interactive, primarily aimed at generating measurable
response.
 Designed to evoke an immediate response and compel
prospects to take some specific actions.
o To pick up the phone and call for more info, placing an
order via the SMS number, or opt-in to the org. email
list
 Mobile marketing:
 SMS/MMS allows business to reach individual customers and
send messages to large groups of people at a time, at a low
cost.
 SMS is ideal for alerting customers to a sale link them to a
website or personalise an offer. Less likely to be ignored.
Marketers shouldn’t overuse text-messaging (should be
courteous, functional and relevant)
 Must have a functional “unsubscribe” facility.
 Social media marketing:
 Offers the opportunity to interact directly with customers.
 Social media platforms eases this method
 Will help promote the org. and help the org. to better
understand customer perceptions and attitudes.
 Benefit: can reach millions of people all around the world,
whilst also having the ability to target particular groups.
 Fast and easy
 Risk: loss of control
- 6) WORD-OF-MOUTH COMMUNICATION AND VIRAL MARKETING:
o Word of mouth communication: an unpaid form of promotion in which
satisfied customers tell other people how much they like a business, product
or service.
 Importance? Reduces the perceived risk associated with the intangible
and variable nature of services.
 Can be positive or negative
 Less satisfied customers will be more likely to transmit negative word
of mouth.
o Word-of-mouth options:

Use public relations

Encourage current users
Use satisfied customers’ activities to identify
to inform others of good
experiences as opinion leaders and
service in return for a
testimonials persuade them to
discount or free gift
recommend your service

Provide loyal customers

Establish a formal
with promotional items
complaint procedure.
such as t-shirts/umbrellas

o Stimulate positive word-of-mouth by becoming involved in sponsoring or

participating in seminars/community events.
o Viral communication: the spread of information about a product or service
from one person to another by harnessing the electronic connectivity of
individuals through network effects of the internet and mobile networks.
 Viral marketing: spread of an idea that helps market the org. product
or service.
 General aim  to raise brand awareness
 Success depends on  a high pass along rate from person to
person.