CHAPTER 8:

COMMUNICATION &
PROMOTION

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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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THE COMMUNICATIONS PROCESS

Table : Relating Promotion to the Communications Process

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THE COMMUNICATIONS PROCESS

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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)

Target audience will affects decisions

related to what, how, when, and where
message will be said, as well as who will
say it.

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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)

Moral appeals ( audiences what right and proper)

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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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Global Difficulties With the

Communication Process
In China: KFCs slogan: Finger lickin good
came out as Eat your fingers off
Also in China: Coca-Cola had thousands of
signs made using the translation: Ke-kou-ke-la
Depending on the dialect this means . . .
Bite the wax tadpole, or
Female horse stuffed with wax

In Taiwan: Pepsis slogan, Come alive with the

Pepsi generation came out as Pepsi will bring
your ancestors back from the dead
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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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Communication Objectives
Communicat Communication tool
ion objective

Example

Preference

Advertising, publicity & PR,

& personal sources. News
story reports, comparative
advertising & word-ofmouth from friends &
relatives

First direct TV &

direct mail tell us
one good thing
about your bank

Trial

Sales promotion & personal Churchill insurance

sources. Special offers,
give the dog a
salespeople, relatives,
phone
friends

Adoption

Personal sources &, for

reassurance, mass
communication.
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Salespeople, friends &

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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

consumers effective judgment. The

consumer needs to be informed of its
features & characteristics. Mass
communication sources may continue
to be used to stimulate interest in
the product, although the message
may change from here we are to this
is what we are.

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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

- Direct Line attempted to change

individuals beliefs about appropriate
providers of home insurance & shook up
the market with its first television advertisement
for home insurance which
portrayed the title
red phone as the low cost hero coming to the
rescue of house buyers paying high insurance
premiums to
building societies.
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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

You no doubt work hard to put a roof over

your familys headif the main mortgage
payer is unable to work through sickness/
unemployment, then plans have to be made
to make sure the payments dont dry up
(Clydesdale bank)

Pension

Fear of
impoverished
old age

Only 2% of the population with existing

pension arrangements will retire on the
maximum pension, 46% of pensioners rely
solely on the State pension, 1 in 3 pensioners
currently have to survive on less than 100
per
month IDRIS
(Barclays Bank 1997 misery gap
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survey)

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Communications message
Examples of fear appeals
Financial
product

Fear appeal

Example

Home
insurance

Fear of theft & loss

of possessions &
invasion of private
space

Youve probably spent a lot of time,

effort & money on your home & though
you may not want to think about it,
accidents do happen & can be
expensive without the right insurance
cover (Bank of Scotland)

Life
assurance

Fear of leaving
dependants & loved
ones to fend for
themselves in an
uncertain future

The family is the most important thing

in most peoples lives, & high priority is
placed on making sure that they will
be looked after if the worst should
happen to you (Clydesdale bank)

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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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Factors affecting the promotion of financial

services
Effects of intangibility, inseparability, heterogeneity & contextuality on the
promotion of financial services

Characteristic Implication Marketing actions

s
s

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

Inseparability The greater the

inseparability,
the greater the
need to show
participation of
customers

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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The greater the

Heterogeneity,
the greater the
need to stress
quality

Show the
AA Insurance
process &
insurance
scope of the
champions
service,
performance
records, etc. to
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34
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

Traditional function of promotion was to

inform the market about the availability of
a particular good or service
Marketers still direct large portions of
current promotional efforts at providing
information

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Objectives of
Promotion

Increase
Demand

Some promotions are aimed at increasing

primary demand, the desire for a general
product category
More promotions are aimed at increasing
selective demand, the desire for a specific
brand

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Objectives of
Promotion

Differentiate
the Product

Product differentiation is a frequent

objective
Homogenous demand for many products
results when consumers regard the firms
output as virtually identical to its
competitors then, the firm has virtually
no control over marketing variables
Product differentiation permits more
flexibility in marketing strategy
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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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The Promotional Mix

Promotional mix:
blend of personal
Personal
Selling
selling and
nonpersonal selling
(including
advertising,
sales
Nonpersonal
promotion, direct
Selling
marketing, and public
relations) designed
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to achieve

Nonpersonal Selling
Advertising
Advertising

Advertising: paid, nonpersonal

communication through various
media by a business firm, not-forprofit organization, or individual
identified in the message with the
hope of informing or persuading
members of a particular audience

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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

Direct marketing: direct

communications other than personal
sales contact between buyer and
seller, designed to generate sales,
information requests, or store visits
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Nonpersonal Selling
Public
Public relations
relations

Public relations: firms communications

and relationships with its various publics
Publicity: stimulation of demand for
good, service, place, idea, person, or
organization by unpaid placement of
commercially significant news or
favorable media presentations
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Table : Relating Promotion to the Communications Process

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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Table : Relating Promotion to the

Communications Process (Continued)
Personal
Selling

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

Factors that influence

the effectiveness of a
promotional to mix:

Stage in PLC
Price
Funds Available
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Nature of the market

Nature of the product
Stage in the product
life-cycle
Price
Funds available for
promotion
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Table 15.3: Factors Influencing Choice of Promotional Mix

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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PULLING AND PUSHING

PROMOTIONAL STRATEGIES
Pulling strategy: promotional effort by a seller
to stimulate demand among final users, who will
then exert pressure on the distribution channel
to carry the good or service, pulling it though the
marketing channel
Pushing strategy: promotional effort by a seller
to members of the marketing channel intended
to stimulate personal selling of the good or
service, thereby pushing it through the
marketing channel
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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
WBBone
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.
52

AIDA Model of Promotion

AIDA - Attention, Interest, Desire, Action
A linear, sequential process based on a
tripartite approach to attitude, in which we
believe that cognition precedes affect,
which precedes behavior.
AIDA is best applied to a promotional
objective, not to a single advertisement

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AIDA Model of Promotion

Step 1: Attention
The first step is to create awareness, then
develop basic cognitive beliefs about the
product/service.
Advertising, public relations, or personal selling
can all be used to accomplish this.
What are the beliefs target market members
should have about your product? Is their
existing knowledge accurate?
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AIDA Model of Promotion

Step 2: Interest
The second step is to create positive feelings
toward the product/service through first
developing a liking for the brand, then
preference.
Advertising is effective at developing liking,
weaker at developing preference (selling and
public relations can play greater roles).
What % like your product? What % prefer your
product?
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AIDA Model of Promotion

Step 3: Desire
This is the formation of a purchase intention: a
conviction by the consumer that is the brand
they should buy.
The issue here is to more someone from a
preference to an intention.
Increase value in the buyers eyes
Sales promotion and personal selling are
particularly useful here
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AIDA Model of Promotion

Step 4: Action
Purchase intention is not a purchase.
Need to stimulate the buyer to take action.
Possibilities: Time sensitive offer, emphasis
on positive or negative reinforcement.
You must get buyers to perceive that there
is more value to action than inaction (ratio
of benefits to costs)
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Table 15.4: Promotional Budget Determination

Method

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
PN. FAOZIAH IDRISspent?
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MEASURING THE EFFECTIVENESS OF

PROMOTION
Two basic measurement tools:
Direct sales results measures the effectiveness of
promotion by revealing the specific impact on sales
revenues for each dollar of promotional spending
Indirect evaluation concentrates on quantifiable
indicators of effectiveness like:
Recall - how much members of the target market remember
about specific products or advertisements
Readership size and composition of a messages audience

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Setting the Promotional

Budget and Mix
Nature of Each Promotional Tool

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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