Define the five promotion mix tools for communicating customer value

Engaging Customers and Communicating Customer Value

Integrated Marketing Communications Strategy

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Engaging Customers and Communicating

Customer Value

Learning Objectives

Objective 1: Define the five promotion mix tools for communicating customer value.

Objective 2: Discuss the changing communications landscape and the need for integrated marketing communications.

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Objective 1 Define the five promotion mix tools for communicating customer value.

Objective 2 Discuss the changing communications landscape and the need for integrated marketing communications.

Learning Objectives

Objective 3: Outline the communication process and the steps in developing effective marketing communications.

Objective 4: Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix.

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Engaging Customers and Communicating

Customer Value

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Objective 3 Outline the communication process and the steps in developing effective marketing communications.

Objective 4 Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix.

Learning Objective 1

Define the five promotion mix tools for communicating customer value.

The Promotion Mix

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Engaging Customers and Communicating

Customer Value

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The promotion mix is the specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships.

The Promotion Mix

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A company’s total promotion mix—also called its marketing communications mix--consists of the specific blend of advertising, public relations, personal selling, sales promotion, and direct marketing tools that the company uses to engage consumers, persuasively communicate customer value, and build customer relationships.

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Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Broadcast

Print

Online

Mobile

Outdoor

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The Promotion Mix

Advertising refers to any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertising includes broadcast, print, online, mobile, outdoor, and other forms.

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Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Broadcast

Print

Online

Mobile

Outdoor

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The Promotion Mix

Advertising refers to any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertising includes broadcast, print, online, mobile, outdoor, and other forms.

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Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Broadcast

Print

Online

Mobile

Outdoor

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The Promotion Mix

Advertising refers to any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertising includes broadcast, print, online, mobile, outdoor, and other forms.

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Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Broadcast

Print

Online

Mobile

Outdoor

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The Promotion Mix

Advertising refers to any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertising includes broadcast, print, online, mobile, outdoor, and other forms.

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Sales promotion is a short-term incentive to encourage the purchase or sale of a product or service.

Discounts

Coupons

Displays

Demonstrations

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The Promotion Mix

Discounted item that won’t be ordered again

Discussion Question

What sales promotions have you seen in the last two months?

Students will often mention similar coupon books, fast food contests, and demonstrations in stores.

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Sales promotion is a short-term incentive to encourage the purchase or sale of a product or service.

Discounts

Coupons

Displays

Demonstrations

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The Promotion Mix

Discussion Question

What sales promotions have you seen in the last two months?

Students will often mention similar coupon books, fast food contests, and demonstrations in stores.

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Sales promotion is a short-term incentive to encourage the purchase or sale of a product or service.

Discounts

Coupons

Displays

Demonstrations

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The Promotion Mix

Discussion Question

What sales promotions have you seen in the last two months?

Students will often mention similar coupon books, fast food contests, and demonstrations in stores.

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Personal selling is the personal interaction by the firm’s sales force for the purpose of engaging customers, making sales, and building customer relationships.

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The Promotion Mix

Personal selling includes:

Sales presentations

Trade shows

Incentive programs

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Public relations involves building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.

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The Promotion Mix

https://www.facebook.com/search/top/?q=oregon%20state%20dulse%20project

Examples of public relations include press releases, sponsorships, events and Web pages.

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Direct and digital marketing involves engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships.

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The Promotion Mix

Monetize

Viralize

Retain

Engage

Products

Services

Direct and digital marketing includes:

Direct mail

Catalogs

Online and social media

Mobile marketing

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Learning Objective 1

Define the five promotion mix tools for communicating customer value.

Advertising

Sales promotion

Personal selling

Public relations

Direct and digital marketing

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Engaging Customers and Communicating

Customer Value

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Discussion Question

List and briefly describe the five major promotion mix tools.

Learning Objective 1 Summary

A company’s total promotion mix—also called its marketing communications mix—consists of the specific blend of advertising, personal selling, sales promotion, public relations, and direct and digital marketing tools that the company uses to engage consumers, persuasively communicate customer value, and build customer relationships. Advertising includes any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. In contrast, public relations focuses on building good relations with the company’s various publics. Personal selling is personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships. Firms use sales promotion to provide short-term incentives to encourage the purchase or sale of a product or service. Finally, firms seeking immediate response from targeted individual customers use direct and digital marketing tools to engage directly with customers and cultivate relationships with them.

Learning Objective 2

Discuss the changing communications landscape and the need for integrated marketing communications.

Integrated Marketing Communications

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Engaging Customers and Communicating

Customer Value

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Integrated Marketing Communications

Consumers are changing.

Marketing strategies are changing.

Advances in digital technology

The New Marketing Communications Model

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Several major factors are changing the face of today’s marketing communications.

In this digital, wireless age, consumers are better informed and more communications empowered. Rather than relying on marketer-supplied information, they can use the Internet, social media, and other technologies to find information on their own.

As mass markets have fragmented, marketers are shifting away from mass marketing. More and more, they are developing focused marketing programs designed to build closer relationships with customers in more narrowly defined micromarkets.

The digital age has brought about remarkable changes in the ways companies and customers communicate with each other. There are a host of new information and communication tools—from smartphones and tablets to satellite and cable television systems to the many faces of the Internet like brand web sites, e-mail, blogs, social media and online communities, the mobile Web, and so much more.

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Integrated marketing communications (IMC) involves carefully integrating and coordinating the company’s many communications channels to deliver a clear, consistent, and compelling message about the organization and its products.

The Need for Integrated Marketing Communications

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Integrated Marketing Communications

The shift toward a richer mix of media and brand content approaches poses a problem for marketers. Consumers today are bombarded by brand content from a broad range of sources. But consumers don’t distinguish between content sources the way marketers do. In the consumer’s mind, brand content from different sources—whether it’s a Super Bowl ad, in-store display, mobile app, or a friend’s social media post—all become part of a single message about the brand or company. Conflicting content from these different sources can result in confused company images, brand positions, and customer relationships.

All too often, companies fail to integrate their various communication channels. The result is a hodgepodge of brand content to consumers. The new world of online, mobile, and social media marketing presents tremendous opportunities but also big challenges.

Marketers benefit from increased access to their customers and fresh insights into their preferences. However, marketers must manage the complexity, fragmentation choices available so it comes together in an organized way.

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Integrated Marketing Communications

FIGURE | 14.1

Integrated Marketing

Communications

To that end, more companies today are adopting the concept of integrated marketing communications (IMC). Under this concept, as illustrated in Figure 14.1, the company carefully integrates its many communication channels to deliver a clear, consistent, and compelling message about the organization and its brands.

Integrated marketing communications calls for recognizing all touch points where the customer may encounter content about the company and its brands. Each contact with the brand will deliver a message—whether good, bad, or indifferent. The company’s goal should be to deliver a consistent and positive message at each contact. Integrated marketing communications ties together all of the company’s messages and images. Its television and print ads have the same brand message as its e-mail and personal selling communications, and its PR materials are consistent with web site, online, social media, and mobile marketing content.

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Learning Objective 2

Discuss the changing communications landscape and the need for integrated marketing communications.

The new marketing communications model

The need for integrated marketing communications

Integrated marketing communications

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Engaging Customers and Communicating

Customer Value

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Discussion Question

Why is there a need for integrated marketing communications?

Learning Objective 2 Summary

The explosive developments in communications technology and changes in marketer and customer communication strategies have had a dramatic impact on marketing communications. Advertisers are now adding a broad selection of more-specialized and highly targeted media and content—including online, mobile, and social media—to reach smaller customer segments with more personalized, interactive messages. As they adopt richer but more fragmented media and promotion mixes to reach their diverse markets, they risk creating a communications hodgepodge for consumers. To prevent this, companies are adopting the concept of integrated marketing communications (IMC). Guided by an overall IMC strategy, the company works out the roles that the various promotional tools and marketing content will play and the extent to which each will be used. It carefully coordinates the promotional activities and the timing of when major campaigns take place.

Learning Objective 3

Outline the communication process and the steps in developing effective marketing communications.

A View of the Communications Process

Steps in Developing Effective Marketing Communication

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Engaging Customers and Communicating

Customer Value

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A View of the Communication Process

Elements in the Communication Process

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FIGURE | 14.2

Elements in the Communication

Process

The sender is the party sending the message to another party.

Encoding is the process of putting thought into symbolic form.

The message is the set of symbols the sender transmits.

Media refer to the communications channels through which the message moves from sender to receiver.

Decoding is the process by which the receiver assigns meaning to the symbols.

The receiver is the party receiving the message sent by another party.

A response is the reaction of the receiver after being exposed to the message.

Feedback is the part of the receiver’s response communicated back to the sender.

Noise is the unplanned static or distortion during the communication process which results in the receiver getting a different message than the one the sender sent.

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Steps in Developing Effective Marketing Communication

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We now examine the steps in developing an effective integrated communications and promotion program. Marketers must identify the target audience, determine the communication objectives, design a message, choose the media through which to send the message, select the message source, and collect feedback.

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Identify the target audience

Determine the communication objectives

Design the message

Choose the media to send the message

Select message source and collect feedback

Identifying the Target Audience

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Steps in Developing Effective Marketing Communication

A marketing communicator starts with a clear target audience in mind. The audience may be current users or potential buyers, those who make the buying decision or those who influence it. The audience may be individuals, groups, special publics, or the general public. The target audience will heavily affect the communicator’s decisions on the questions shown on the slide - what, how, when, where and who?

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What will be said

How it will be said

When it will be said

Where it will be said

Who will say it

Determining the Communication Objectives

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Steps in Developing Effective Marketing Communication

FIGURE | 14.3

Buyer-Readiness Stages

The target audience may be in any of six buyer-readiness stages, the stages consumers normally pass through on their way to making a purchase. These stages are awareness, knowledge, liking, preference, conviction, and purchase (see Figure 14.3).

For example consider the introduction of Microsoft’s Surface tablet. The marketing communicator’s target market may be totally unaware of the Microsoft’s Surface tablet, know only its name, or know only a few things about it. Thus, the marketer must first build awareness and knowledge.

Assuming that target consumers know about a product, how do they feel about it? These stages include liking (feeling favorable about the Surface), preference (preferring the Surface to competing tablets), and conviction (believing that the Surface is the best tablet for them). A combination of promotion mix tools are used to create positive feelings and conviction

Finally, some members of the target market might be convinced about the product but not quite get around to making the purchase. To help reluctant consumers over such hurdles, Microsoft might offer buyers special promotional prices and upgrades, and support the product with comments and reviews from customers at its Web and social media sites and elsewhere.

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AIDA Model

Get Attention

Hold Interest

Arouse Desire

Obtain Action

Designing a Message

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Steps in Developing Effective Marketing Communication

Having defined the desired audience response, the communicator then turns to developing an effective message. Ideally, the message should use the the AIDA model framework shown in the slide. In practice, few messages take the consumer all the way from awareness to purchase, but the AIDA framework suggests the desirable qualities of a good message.

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Message content is “what to say.”

Message structure and format is “how to say it.”

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Steps in Developing Effective Marketing Communication

Designing a Message

When putting a message together, the marketing communicator must decide what to say (message content) and how to say it (message structure and format).

Message Content

The marketer has to figure out an appeal or theme that will produce the desired response. There are three types of appeals: rational, emotional, and moral.

Message Structure

Marketers must also decide how to handle three message structure issues. The first is whether to draw a conclusion or leave it to the audience. Research suggests that, in many cases, rather than drawing a conclusion, the advertiser is better off asking questions and letting buyers come to their own conclusions.

Message Format

The marketing communicator also needs a strong format for the message. In a print ad, the communicator has to decide on the headline, copy, illustration, and colors. To attract attention, advertisers can use novelty and contrast; eye-catching pictures and headlines; distinctive formats; message size and position; and color, shape, and movement. For example, consider the striking Benjamin Moore paint ad shown in the slide

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Rational appeal relates to the audience’s self-interest.

Emotional appeal is an attempt to stir up positive or negative emotions to motivate a purchase.

Moral appeal is directed to an audience’s sense of what is right and proper.

Message Content

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Steps in Developing Effective Marketing Communication

Rational appeals show that the product will produce the desired benefits. Examples are messages showing a product’s quality, economy, value, or performance. Thus, an ad for Aleve makes this matter-of-fact claim: “More pills doesn’t mean more pain relief. Aleve has the strength to keep back, body, and arthritis pain away all day with fewer pills than Tylenol.”

Communicators may use emotional appeals ranging from love, joy, and humor to fear and guilt. Advocates of emotional messages claim that they attract more attention and create more belief in the sponsor and the brand.

Moral appeals are often used to urge people to support social causes, such as a cleaner environment or aid to the disadvantaged.

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Rational appeal relates to the audience’s self-interest.

Emotional appeal is an attempt to stir up positive or negative emotions to motivate a purchase.

Moral appeal is directed to an audience’s sense of what is right and proper.

Message Content

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Steps in Developing Effective Marketing Communication

Rational appeals show that the product will produce the desired benefits. Examples are messages showing a product’s quality, economy, value, or performance. Thus, an ad for Aleve makes this matter-of-fact claim: “More pills doesn’t mean more pain relief. Aleve has the strength to keep back, body, and arthritis pain away all day with fewer pills than Tylenol.”

Communicators may use emotional appeals ranging from love, joy, and humor to fear and guilt. Advocates of emotional messages claim that they attract more attention and create more belief in the sponsor and the brand.

Moral appeals are often used to urge people to support social causes, such as a cleaner environment or aid to the disadvantaged.

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Personal communication involves two or more people communicating directly with each other.

Face to face

Phone

Mail or e-mail

Texting or Internet chat

Choosing Communication Channels and Media

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Steps in Developing Effective Marketing Communication

Personal communication channels are effective because they allow for personal addressing and feedback.

Some personal communication channels are controlled directly by the company. For example, company salespeople contact business buyers.

But other personal communications about the product may reach buyers through channels not directly controlled by the company. These channels might include independent experts—consumer advocates, bloggers, and others—making statements to buyers. Or they might be neighbors, friends, family members, associates, or other consumers talking to target buyers, in person or via social media or other interactive media. This last channel, word-of-mouth influence, has considerable effect in many product areas.

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Opinion leaders are people whose opinions are sought by others.

Buzz marketing involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communities.

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Steps in Developing Effective Marketing Communication

Choosing Communication Channels and Media

Personal influence carries great weight, especially for products that are expensive, risky, or highly visible. Companies can take steps to put personal communication channels to work for them. They can create opinion leaders for their brands— people whose opinions are sought by others—by supplying influencers with the product on attractive terms or by educating them so that they can inform others.

An example of buzz marketing is Ford’s successful and long running Fiesta Movement campaign which hands out Fiestas to selected consumers, turning them into “Fiesta Agents.” These brand ambassadors then create buzz by sharing their experiences via blogs, tweets, Facebook updates, YouTube videos, and other social media interactions.

Social marketing firm BzzAgent takes a different approach to creating buzz. It creates customers for a client brand, then turns them into influential brand advocates.

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Nonpersonal communication channels are media that carry messages without personal contact or feedback, including major media, atmospheres, and events.

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Steps in Developing Effective Marketing Communication

Choosing Communication Channels and Media

Major media include print media (newspapers, magazines, direct mail), broadcast media (television, radio), display media (billboards, signs, posters), and online media (e-mail and company web sites).

Atmospheres are designed environments that create or reinforce the buyer’s leanings toward buying a product. Thus, lawyers’ offices and banks are designed to communicate confidence and other qualities that might be valued by clients.

Events are staged occurrences that communicate messages to target audiences. For example, public relations departments arrange grand openings, shows and exhibits, public tours, and other events.

Nonpersonal communication affects buyers directly. In addition, using mass media often affects buyers indirectly by causing more personal communication. For example, communications might first flow from television, magazines, and other mass media to opinion leaders and then from these opinion leaders to others.

Interestingly, marketers often use nonpersonal communication channels to replace or stimulate personal communications by embedding consumer endorsements or word-of-mouth testimonials in their ads and other promotions.

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The message’s impact depends on how the target audience views the communicator.

Celebrities

Athletes

Entertainers

Professionals

Health care providers

Selecting the Message Source

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Steps in Developing Effective Marketing Communication

Messages delivered by highly credible sources are more persuasive. Thus, many food companies promote to doctors, dentists, and other health-care providers to motivate these professionals to recommend specific food products to their patients. And marketers hire celebrity endorsers—well-known athletes, actors, musicians, and even cartoon characters—to deliver their messages.

A host of NBA superstars lend their images to brands such as Nike, McDonald’s, and Coca-Cola. Taylor Swift endorses Diet Coke, Keds, and CoverGirl, and Beyoncé endorses Pepsi and L’Oréal, among other brands.

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Collecting feedback involves the communicator understanding the effect on the target audience by measuring behavior resulting from the content.

Collecting Feedback

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Steps in Developing Effective Marketing Communication

After sending the message, the communicator must research its effect on the target audience. This involves asking target audience members whether they remember the message, how many times they saw it, what points they recall, how they felt about the message, and their past and present attitudes toward the product and company.

The communicator would also like to measure behavior resulting from the message—how many people bought the product, talked to others about it, or visited the store.

Feedback on marketing communications may suggest changes in the promotion program or in the product offer itself.

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Learning Objective 3

Outline the communication process and the steps in developing effective marketing communications.

Identify communication process elements

Identify the target audience

Determine communication objectives

Define the response sought

Construct message content

Select media and collect feedback

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Engaging Customers and Communicating

Customer Value

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Discussion Question

Name and briefly describe the nine elements of the communications process. Why do marketers need to understand these elements?

Learning Objective 3 Summary

The communication process involves nine elements: two major parties (sender, receiver), two communication tools (message, media), four communication functions (encoding, decoding, response, and feedback), and noise. To communicate effectively, marketers must understand how these elements combine to communicate value to target customers.

In preparing marketing communications, the communicator’s first task is to identify the target audience and its characteristics. Next, the communicator has to determine the communication objectives and define the response sought, whether it be awareness, knowledge, liking, preference, conviction, or purchase. Then a message should be constructed with an effective content and structure. Media must be selected, both for personal and nonpersonal communication. The communicator must find highly credible sources to deliver messages. Finally, the communicator must collect feedback by watching how much of the market becomes aware, tries the product, and is satisfied in the process.

Learning Objective 4

Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix.

Setting the Total Promotion Budget and Mix

Socially Responsible Marketing Communication

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Engaging Customers and Communicating

Customer Value

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Setting the Total Promotion Budget and Mix

The affordable method sets the promotion budget at the level management thinks the company can afford.

The percentage-of-sales method sets the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price.

Setting the Total Promotion Budget

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One of the hardest marketing decisions facing a company is how much to spend on promotion. Here, we look at four common methods used to set the total budget for advertising: the affordable method, the percentage-of-sales method, the competitive parity method, and the objective-and-task method.

Some companies use the affordable method. Small businesses often use this method, reasoning that the company cannot spend more on advertising than it has. They start with total revenues, deduct operating expenses and capital outlays, and then devote some portion of the remaining funds to advertising.

The percentage-of-sales method is simple to use and helps management think about the relationships between promotion spending, selling price, and profit per unit.

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Setting the Total Promotion Budget and Mix

The competitive-parity method sets the promotion budget to match competitors’ outlays.

The objective-and-task method develops the promotion budget by specific promotion objectives and the costs of tasks needed to achieve these objectives.

Setting the Total Promotion Budget

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Companies using the competitive-parity method monitor competitors’ advertising or get industry promotion spending estimates from publications or trade associations and then set their budgets based on the industry average.

The most logical budget-setting method is the objective-and-task method, which entails (1) defining specific promotion objectives, (2) determining the tasks needed to achieve these objectives, and (3) estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget.

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The concept of integrated marketing communications suggests that the company must blend the promotion tools carefully into a coordinated promotion mix.

Shaping the Overall Promotion Mix

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How does a company determine what mix of promotion tools to use? Companies within the same industry differ greatly in the design of their promotion mixes. For example, cosmetics maker Mary Kay spends most of its promotion funds on personal selling and direct marketing, whereas competitor CoverGirl spends heavily on consumer advertising. We now look at factors that influence the marketer’s choice of promotion tools.

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Advertising can reach masses of geographically dispersed buyers at a low cost per exposure, and it enables the seller to repeat a message many times.

Personal selling is the most effective method at certain stages of the buying process, particularly in building buyers’ preferences, convictions, actions, and developing customer relationships.

The Nature of Each Promotion Tool

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Shaping the Overall Promotion Mix

Television advertising can reach huge audiences. Nearly 112 million Americans watched the most recent Super Bowl. What’s more, a popular TV ad’s reach can be extended through online and social media.

Personal selling involves personal interaction between two or more people, so each person can observe the other’s needs and characteristics and make quick adjustments. Personal selling also allows all kinds of customer relationships to spring up, ranging from matter-of-fact selling relationships to personal friendships.

These unique qualities come at a cost, however. Personal selling is the company’s most expensive promotion tool, costing companies on average $600 or more per sales call, depending on the industry. U.S. firms spend up to three times as much on personal selling as they do on advertising.

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Sales promotion includes coupons, contests, cents-off deals, and premiums that attract consumer attention and offer strong incentives to purchase.

Public relations is a very believable form of promotion that includes news stories, features, sponsorships, and events.

Direct and digital marketing is an immediate, customized, and interactive promotional tool that includes direct mail, catalogs, telephone marketing, online, mobile, and social media.

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Shaping the Overall Promotion Mix

The Nature of Each Promotion Tool

Sales promotion can be used to dramatize product offers and boost sagging sales. Sales promotions invite and reward quick response. Whereas advertising says, “Buy our product,” sales promotion says, “Buy it now.” Sales promotion effects can be short lived, however, and often are not as effective as advertising or personal selling in building long-run brand preference and customer relationships.

Public relations seem more real and believable to readers than ads do. PR can also reach many prospects who avoid salespeople and advertisements—the message gets to buyers as “news and events” rather than as a sales-directed communication. A well-thought-out public relations campaign used with other promotion mix elements can be very effective and economical.

Direct and digital marketing is more targeted: It’s usually directed to a specific customer or customer community. Direct marketing is immediate and personalized: Messages can be prepared quickly—even in real time—and tailored to appeal to specific consumers or brand groups. Finally, direct marketing is interactive: It allows a dialogue between the marketing team and the consumer, and messages can be altered depending on the consumer’s response. Thus, direct and digital marketing are well suited to highly targeted marketing efforts, creating customer engagement, and building one-to-one customer relationships.

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Promotion Mix Strategies

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Shaping the Overall Promotion Mix

Marketers can choose from two basic promotion mix strategies: push promotion or pull promotion. Figure 14.4 contrasts the two strategies. The relative emphasis given to the specific promotion tools differs for push and pull strategies.

A push strategy involves “pushing” the product through marketing channels to final consumers. The producer directs its marketing activities (primarily personal selling and trade promotion)toward channel members to induce them to carry the product and promote it to final consumers.

Using a pull strategy, the producer directs its marketing activities (primarily advertising and consumer promotion) toward final consumers to induce them to buy the product. If the pull strategy is effective, consumers will then demand the brand from retailers, who will in turn demand it from the producer. Thus, under a pull strategy, consumer demand “pulls” the product through the channels.

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The company must take steps to see that each promotion mix element is smoothly integrated.

The various promotion elements should work together to carry the firm’s unique brand messages and selling points.

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Shaping the Overall Promotion Mix

Integrating the Promotion Mix

Integrating the promotion mix starts with customers. Whether it’s advertising, personal selling, sales promotion, public relations, or digital and direct marketing, communications at each customer touch point must deliver consistent marketing content and positioning. An integrated promotion mix ensures that communications efforts occur when, where, and how customers need them.

To achieve an integrated promotion mix, all of the firm’s functions must cooperate to jointly plan communications efforts. Many companies even include customers, suppliers, and other stakeholders at various stages of communications planning. Scattered or disjointed promotional activities across the company can result in diluted marketing communications impact and confused positioning. By contrast, an integrated promotion mix maximizes the combined effects of all a firm’s promotional efforts.

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Advertising and Sales Promotion

Communicate openly and honestly with consumers and resellers

Avoid deceptive or false advertising

Avoid bait-and-switch advertising

Conform to all federal, state, and local regulations

Socially Responsible Marketing Communication

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Socially Responsible Marketing Communication

In shaping its promotion mix, a company must be aware of the many legal and ethical issues surrounding marketing communications. Abuses may occur, so public policy makers have developed a substantial body of laws and regulations to govern advertising, sales promotion, personal selling, and direct marketing. We will discuss unethical and illegal issues regarding advertising and sales promotion on this slide and personal selling on the next.

Advertising and Sales Promotion

By law, companies must avoid false or deceptive advertising. Advertisers must not make false claims, such as suggesting that a product cures something when it does not. They must avoid ads that have the capacity to deceive, even though no one actually may be deceived.

Sellers must avoid bait-and-switch advertising that attracts buyers under false pretenses. For example, a large retailer advertised a sewing machine at $179. However, when consumers tried to buy the advertised machine, the seller downplayed its features, placed faulty machines on showroom floors, understated the machine’s performance, and took other actions in an attempt to switch buyers to a more expensive machine.

A company’s trade promotion activities also are closely regulated. For example, under the Robinson-Patman Act, sellers cannot favor certain customers through their use of trade promotions. They must make promotional allowances and services available to all resellers on proportionately equal terms.

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Socially Responsible Marketing Communication

Personal Selling

Follow rules of “fair competition”

Do not offer bribes

Do not attempt to obtain competitors’ trade secrets

Do not disparage competitors or their products

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Personal Selling

Most states have enacted deceptive sales acts that spell out what is not allowed. For example, salespeople may not lie to consumers or mislead them about the advantages of buying a particular product. To avoid bait-and-switch practices, salespeople’s statements must match advertising claims.

Different rules apply to consumers who are called on at home or who buy at a location that is not the seller’s permanent place of business versus those who go to a store in search of a product. Because people who are called on may be taken by surprise and may be especially vulnerable to high-pressure selling techniques, the Federal Trade Commission (FTC) has adopted a three-day cooling-off rule to give special protection to customers who are not seeking products.

Under this rule, customers who agree in their own homes, workplace, dormitory, or facilities rented by the seller on a temporary basis—such as hotel rooms, convention centers, and restaurants—to buy something costing more than $25 have 72 hours in which to cancel a contract or return merchandise and get their money back—no questions asked.

Much personal selling involves business-to-business trade. In selling to businesses, salespeople may not offer bribes to purchasing agents or others who can influence a sale. They may not obtain or use technical or trade secrets of competitors through bribery or industrial espionage. Finally, salespeople must not disparage competitors or competing products by suggesting things that are not true.

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Learning Objective 4

Explain the methods for setting the promotion budget and factors that affect the design of the promotion mix.

How much to spend for promotion

Create the promotion mix

Pursue a push or a pull promotional strategy

Be aware of the many legal and ethical issues

Communicate responsibility with customers and resellers

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Engaging Customers and Communicating

Customer Value

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Discussion Questions

Name and describe the two basic promotion mix strategies. In which strategy is advertising more important?

Learning Objective 4 Summary

The company must determine how much to spend for promotion. The most popular approaches are to spend what the company can afford, use a percentage of sales, base promotion on competitors’ spending, or base it on an analysis and costing of the communication objectives and tasks. The company has to divide the promotion budget among the major tools to create the promotion mix. Companies can pursue a push or a pull promotional strategy—or a combination of the two. The best specific blend of promotion tools depends on the type of product/market, the buyer’s readiness stage, and the PLC stage. People at all levels of the organization must be aware of the many legal and ethical issues surrounding marketing communications. Companies must work hard and proactively at communicating openly, honestly, and agreeably with their customers and resellers.