978-0077861063 Chapter 8 Lecture Note 2

Document Type
Homework Help
Book Title
A Preface to Marketing Management 14th Edition
J. Paul Peter, James Donnelly
B. The Allocation Question
This question deals with the problem on deciding on the most effective way of
spending advertising dollars.
A general answer to the question is that management’s choice of strategies and
objectives determines the media and appeals to be used.
A successful ad campaign has two related tasks
oSay the right things in the ads themselves
oUse the appropriate media in the right amounts at the right time to reach the
target market
Message Strategy
The advertising process involves creating messages with words, ideas, sounds,
and other forms of audiovisual stimuli that are designed to affect consumer (or
distributor) behavior.
To be effective, the advertising message should meet two general criteria:
oIt should take into account the basic principles of communication.
oIt should be predicted upon a good theory of consumer motivation and
The basic communication process involves three elements:
oThe sender or source of the communication
oThe communication or message
oThe receiver or audience
Advertising messages must be transmitted and carried by particular
communication channels commonly known as advertising media. Marketing
Insight 8-5 provides some relative merits of major advertising media.
For many products and services, advertising is an influence that may affect the
consumers decision to purchase a particular product or brand.
The end goal of an advertisement and its associated campaign is to move the
buyer to a decision to purchase the advertised brand.
The planning of an advertising campaign and the creation of persuasive messages
require a mixture of marketing skill and creative know-how.
Some of the critical types of information an advertiser should have are as follows:
oWho the firm’s customers and potential customers are.
oHow many such customers there are.
oHow much of the firm’s type and brand of product they are currently buying
and can reasonably be expected to buy in the short-term and long-term
oWhich individuals, other than customers and potential customers, influence
purchasing decisions.
oWhere they buy the firms brand of product.
oWhen they buy, and frequency of purchase
oWhich competitive brands they buy and frequency of purchase.
oHow they use the product.
oWhy they buy particular types and brands of products.
Media Mix
Media selection is no easy task. Marketing Insight 8–5 presents a brief summary
of the advantages and disadvantages of some of the major advertising media.
In the advertising industry, a common measure of efficiency or productivity is cost
per thousand, or CPMs. This figure generally refers to the dollar cost of reaching
1,000 prospects, and its chief advantage lies in its simplicity and allowance for a
common base of comparison between differing media types.
The major disadvantage of the use of CPMs also relates to its simplicity.
Involving programs produce engaged respondents who demonstrate more
favorable responses to advertising messages.
Reach, in general, is the number of different targeted audience members exposed
at least once to the advertiser's message within a predetermined time frame.
Just as important as the number of different people exposed (reach) is the number
of times, on average, that they are exposed to an advertisement within a given
time period. This rate of exposure is called average frequency.
Since marketers all have budget constraints, they must decide whether to increase
reach at the expense of average frequency or average frequency at the expense of
In essence, the marketers dilemma is to develop a media schedule that both:
oExposes a sufficient number of targeted customers (reach) to the firm’s
oExposes them for enough times (average frequency) to the product to
produce the desire effect.
VI. Sales Promotion
Over the past two decades, the popularity of sales promotion has been increasing. Two
reasons for this increased popularity are undoubtedly the increased pressure on
management for short-term results and the emergence of new purchase tracking
Figure 8.2 presents some popular targets of sales promotion and the methods used.
A. Push versus Pull Marketing
Push and pull marketing strategies compromises the two options available to marketers
interested in getting their product into the hands of customers (Figure 8.3).
oPush strategies involve aiming promotional efforts at distributors, retailers and
sales personnel to gain their cooperation in ordering, stocking, and accelerating
the sale of a product.
oPull strategies involve aiming promotional efforts directly at customers to
encourage them to ask the retailer for the product.
B. Trade Sales Promotions
Trade promotions are those promotions aimed at distributors and retailers of product
who make up the distribution channel. The major objectives are to:
oConvince retailers to carry the manufacturer's products
oReduce the manufacturer's inventories and increase the distributor's or retailer's
oSupport advertising and consumer sales promotions
oEncourage retailers either to give the product more favorable shelf space or to
place more emphasis on selling the product
oServe as a reward for past sales efforts
Promotions built around price discounts and advertising or other allowances are likely
to have higher distributor/retailer participation level than other type promotions
because a direct economic incentive is attached to the promotion.
C. Consumer Promotions
Consumer promotions can fulfill several distinct objectives for the manufacturer.
Some of the more commonly sought-after objectives include:
oInducing the consumer to try the product
oRewarding the consumer for brand loyalty
oEncouraging the consumer to trade up or purchase larger sizes of a product
oStimulating the consumer to make repeat purchases of the product
oReacting to competitor efforts
oReinforcing and serving as a complement to advertising and personal selling
Figure 8.4 presents a brief description of some of the most commonly used forms of
consumer promotion activities.
D. What Sales Promotion Can and Can’t Do
Advocates of sales promotion often point to its growing popularity as a justification
for the argument that we don’t need advertising; sales promotion itself will suffice.
Marketers should bear in mind that sales promotion is only one part of a
well-constructed integrated marketing communications program.
While sales promotion is proven to be effective in achieving the objectives listed in the
previous sections, there are several compelling reasons why it should not be used as
the sole promotional tool.
These reasons include sales promotion’s inability to:
oGenerate long-term buyer commitment to a brand in many cases
oChange, except on a temporary basis, declining sales of a product
oConvince buyers to purchase an otherwise unacceptable product
oMake up for a lack of advertising or sales support for a product
When the competition gets drawn into the promotion war, the effect can be a
significant slowing of the sharp sales increases predicted by the initiator of the
The dilemma marketers face is how to cut back on sales promotions without losing
market share to competitors.
In addition to developing pricing policies to cut back on short-term promotions, some
consumer products companies are starting to institute frequency marketing programs
in which they reward consumers for purchases of products or services over a sustained
period of time.
VII. Public Relations
Public relation is a nonpersonal form of communication that tries to influence the overall
image of the organization and its products and services among its various stakeholder
The most popular and frequently used public relations tool is publicity. There are several
forms of publicity:
oNews release
oNews conference
oPublic service announcements
VIII. Direct Marketing
Direct marketing allows the organization to communicate with customers through direct
mail, e-mail, mobile marketing, catalogs, telemarketing, and direct response advertising.
The Internet has had a tremendous impact on every aspect of direct mail.
Direct marketing methods are certainly not new. What is new is the ability to design and
use them more efficiently and effectively because of the Internet and the ability to develop
and compile comprehensive databases (Marketing Insight 8–7).
Cellular technology such as a smartphone enable the customer to purchase wherever they
happen to be. Marketing by way of these handheld devices has become known as mobile
For the American consumer facing a “poverty of time,” direct marketing offers many
benefits. In addition to saving time, consumers often save money, get better service, and
enjoy increased privacy; many even find it entertaining.
Direct marketing activities are often very effective in generating sales leads when a
customer asks for more information about a product or service and can also increase store
traffic when potential buyers are encouraged to visit a dealership or retail store.
Key Terms
Advertising: A paid form of nonpersonal communications about an organization, its product, or
its activities that is transmitted through a mass medium to a target audience.
Average frequency: The number of times customers, on average, are exposed to an
advertisement within a given time period.
Consumer promotions: Promotions directed at consumers designed to induce the customer to
try the product, reward brand loyalty, encourage the consumer to trade-up or purchase larger
sizes, stimulate repeat purchases, and reinforce other advertising or personal selling efforts.
Cost per thousand: A common measure of efficiency or productivity in advertising, cost per
thousand (CPM) refers to the dollar cost of reaching 1,000 prospects.
Direct marketing: Direct communication with customers through direct mail, e-mail, mobile
marketing, catalogs, telemarketing, and direct response advertising.
Expenditure question: The methods used to decide how much to spend on advertising, ranging
from simple (a percent of sales), to more complex (the task approach which determines goals and
how much it will cost to accomplish each goal).
Frequency marketing program: Programs designed to reward customers for purchases of a
product or service over a sustained period of time.
Integrated marketing communications: Marketing communications programs that coordinate
and integrate all elements of the promotion mix so that the organization presents a consistent
message. It seeks to manage all sources of brand or company contacts with existing and potential
Mobile marketing: Marketing by way of handheld devices (e.g., smartphones).
Objectives of advertising: Creating awareness, aiding comprehension, developing conviction,
and encouraging ordering. Within each category more specific objectives can be developed that
take into account time and degree of success desired.
Personal selling: Face-to-face communication with potential buyers to inform them about and
persuade them to purchase an organization’s product.
Promotion mix: The combination and types of nonpersonal and personal communication an
organization puts forth during a specified period. There are five elements of the promotion mix,
four of which are nonpersonal forms of communication (advertising, sales promotion, public
relations, and direct marketing), and one, personal selling, which is a personal form of
Public relations: Efforts directed at influencing the attitudes, feelings, and opinions of
customers, noncustomers, stockholders, suppliers, employees, and political bodies about the
organization. A popular form is publicity.
Pull strategy: Promotional efforts directed at customers to encourage them to ask the retailer for
the product. They are designed to “pull” a product through the distribution channel from
manufacturer to buyer.
Push strategy: Promotional efforts directed at distributors, retailers, and sales personnel to gain
their cooperation in ordering, stocking, and supporting the sales of a product. As such they
“push” the product toward the customer.
Reach: The number of targeted audience members exposed at least once to an advertiser's
message within a predetermined time frame.
Sales promotion: An activity or material that offers customers, sales personnel, or resellers a
direct inducement for purchasing a product.
Trade promotions: Promotions aimed at distributors and retailers of products who make up the
distribution channel.
Additional Resources
Burns, Brian C., and Tom U. Snyder. Selling in a New Market Space. New York: McGraw-Hill,
Seitel, Fraser, and John Doorley. Rethinking Reputation. New York: Palgrave Macmillan, 2012.
Mullin, Jeanniery, and David Daniels. Email Marketing. Indianapolis: Wiley Publishers, 2009.
Percival, Sean. My Space Marketing: Creating a Social Network to Boom Your Business.
Indianapolis: Que Books, 2009.
Postman, Joel. SocialCorp: Social Media Goes Corporate. Berkeley CA: New Riders, 2009.
Reich, Brian, and Don Soloman. Media Rules: Mastering Today's Technology to Connect With
and Keep Your Audience. Hoboken NJ: John Wiley and Sons, 2008.
Fox, Vanessa. Marketing in The Age of Google. Hoboken, NJ: John Wiley

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