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An Overview of Marketing

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           arketing communication is an attempt of business to influence its potential

M          customers. It is the element in the marketing mix that serves to inform,
           persuade, and remind the market of a product or service or the organization
           selling it with the hope of influencing the target market‟s feelings, belief, or
           behavior.

                 Promotion is applied marketing communication. It is used to
        communicate both factual information and persuasive messages to prospective
        buyers. It is an activity, such as a sale or advertising campaign, designed to
        increase visibility or sales of a product
        (http://www.investorwords.com/3897/promotion.html#ixzz1YyUyIWoS).

Elements of Promotion

        There are five elements of promotion: personal selling, advertising, sales
promotion, public relations, and publicity. Theses promotional efforts use three general
types of communication media. They involve (1) direct human communication, usually
on a face-to-face basis or on the telephone, (2) indirect communication through some
medium such as the television, or (3) interactive communication via some electronic
medium, such as the internet.

         Personal Selling refers to the delivery of a specially designed message to a
prospect by a seller, usually in the form of face-to-face communication, personal
correspondence, or a personal telephone conversation. Unlike advertising, a personal
sales message can be more specifically targeted to individual prospects and easily altered
if the desired behavior does not occur. Personal selling, however, is far more costly than
advertising and is generally used only when its high expenditure can be justified
(http://www.allbusiness.com/glossaries/personal-selling/4955751-
1.html#ixzz1YyVwYjxj).

       Advertising is an impersonal mass communication that the sponsor pays for and
with which it is clearly identified. The most familiar form of advertising is found in the
broadcast (TV and radio) and print (newspapers and magazines) media. There are,
                                    however, many other advertising alternatives such as
                                    the various web pages, direct mail, billboards, and the
                                    Yellow Pages. As advertising allows marketers to send
                                    a uniform and unvarying message to a large number of
                                    people it is a cost-efficient substitute for personal
                                    selling (Diola and Tichepco, 2009).

                                          Sales promotion is an activity designed to
                                  boost the sales of a product or service. It may include an
                                  advertising campaign, increased PR activity, a free-
                                  sample campaign, offering free gifts or trading stamps,
                                  arranging demonstrations or exhibitions, setting up
                                  competitions with attractive prizes, temporary price
                                  reductions, door-to-door calling, telemarketing, and
                                  personal letters on other methods

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(http://tutor2u.net/business/marketing/promotion_sales_promotion.asp).

         Public relations refers to the use of the news or business press to carry positive
stories about your company or your products; cultivating a good relationship with local
press representatives.

                 Publicity is a special form of public relations that involves news stories
        about an organization or its products or services. It is similar to advertising
        because it uses the same mass media. The difference is that publicity is not paid
        for, the organization, that is, the subject of the publicity, has little control over it,
        and appears as news and has greater credibility than advertising. Organizations
        seek good publicity and frequently provide the material for it is the form of news
        releases, press conferences, and photographs.

                 Other Forms of Publicity
                 Appearances. Talk shows often invite guests who promote their books,
                 recordings, concerts, and movies.

                 Event Sponsorships. Sponsorship of events and activities in charitable
                 institutions are very effective for marketers who wish to generate
                 publicity or reinforce a certain image.

The Communication Process

         Communication is the verbal or nonverbal transmission of information from
someone wanting to express an idea and to another who is expected or expecting to get
that idea. The goal of communication is to have the receiver of the information
understand as closely as possible the meaning intended by the sender, or source, of the
message.

      Communication requires four elements: a message, a source of the message, a
communications channel, and a receiver.




                                 Figure 8.1 Communication Process




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The Hierarchy of Communication Effects

         The promotion process is a procedure that moves people up a series of steps
called the hierarchy of communication effects.


  Figure 8.2 The Hierarchy of                   Purchase
  Communication Effects
                                         Conviction           The hierarchy model suggests
                                                              that communication is not a
                                   Preference                 one-step process. Marketers
                                                              use promotion to induce buyers
                                                              to move up the staircase.
                                Liking                        Communication may be aimed
                                                              at any step, depending on the
                      Knowledge                               objective of the communication.
                                                              Since consumers are on
                Awareness                                     different steps of the promotion
                                                              staircase and react to different
                                                              forms of marketing
       Brand Ignorance                                        communication, different
                                                              elements of the promotional
                                                              mix would be more effective for
Promotional Strategies                                        different consumers.


         A push strategy is directed toward members of a channel of distribution. A
“push” promotional strategy makes use of a company's sales force and trade promotion
activities to create consumer demand for a product. The producer promotes the
product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it
to consumers.

        Traditional advertising leaflets that drop through your letterbox. Sales letters,
advertising banners. These are all examples of a push strategy.

        A pull strategy is directed toward consumers in order to stimulate demand for the
product. This is a strategy that requires high spending on advertising and consumer
promotion to build up consumer demand for a product. If the strategy is successful,
consumers will ask their retailers for the product, the retailers will ask the wholesalers,
and the wholesalers will ask the producers. (http://tutor2u.net/business/marketing)

       Advertising and mass media promotion, customer relationship management, sales
promotions and discounts are examples of pull tactics.

Promotional Campaigns

         A promotional campaign is a series of advertisements using various marketing
tools that share the same message and ideas to promote a business or event to a target
audience. The typical campaign uses different media resources including internet,
newspapers, television, radio, and print advertising. (http://www.businessdictionary.com)
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        A product differentiation approach emphasizes unique product features and
focuses on attributes of the product, not on its image or price.

        A positioning approach promotes a brand in relation to competing brands.

        A direct response campaign seeks a direct measurable response such as an order,
a donation, an inquiry, or a visit to the store or showroom.

Classification of Sales Persons

         With the introduction of information technology, a new type of sales person
referred to as the professional sales person has emerged. Today, sales people are
managers of a market area called sales territories. They engage in a total selling work,
which includes selling their products, building goodwill, servicing their customers, and
training their customer‟s sales people.

        Seven types of sales persons fall under two groups:

        Order Takers
        1. Delivery sales person. This sales person primarily delivers the product like
        soft drinks or fuel. Few of these sales people do the actual selling. Usually, they
        take and fill orders.
        2. Inside order taker. This sales person takes orders at the seller‟s place of
        business like a saleslady at a counter at SM Department Store.
        3. Outside order taker. This sales person goes to the customer in the field and
        accepts an order.
        4. Missionary salesperson. This sales person is not expected to take an order.
        His job is to build goodwill, perform promotional activities, and provide
        information and other services for the customers.
        5. Sales engineer. This sales person sells complex or technically sophisticated
        products. The salesperson has the ability to clearly explain the product to a
        prospective customer and adapt the product to the customer‟s needs.

        Order Getters
        6. Creative salesperson. This salesperson is involved in the creative selling of
        goods, both tangibles and intangibles. The selling of intangibles could be
        considered the most difficult selling job since the customers cannot see, touch or
        smell the product. Creative selling involves designing a system to fit the needs of
        a particular customer.
        7. Professional business development. The responsibility of the salesperson is to
        bring in new business. In some firms like advertising agencies, research firms,
        auditing firms, law firms, management consultancy firms, and other service
        organizations, some employees are assigned to handle the business development
        of the firm which undertakes selling the services of the firm. (Diola and
        Tichepco, 2009)




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The Creative Selling Process

        The creative selling process is a series of steps that provide guidelines for the
salesperson. It is an adaptive process that begins with the identification of potential
customers and tailors the sales presentation and product offering to each prospect‟s
needs. The ultimate goal is customer satisfaction.




                               Figure 8.3 Creative Selling Process


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Sales Management

         Sales management is the marketing activity dealing with planning, organizing,
directing, and controlling the personal selling effort. Sales personnel, like most
employees, require some degree of supervision and management. For this reason, the job
of the sales manager differs significantly from that of other managers. Members of the
sales force are managed so that their efforts are directed toward organizational goals.

         A sales manager is responsible for:

1.       Setting sales objectives
2.       Organizing the sales force
3.       Recruiting and selecting sales personnel
4.       Training the sales force
5.       Developing an effective compensation plan
                 There are several ways of compensating the sales force:
                          •Straight salary
                          •Straight commission
                          •Quota-bonus plan
                          •Salary plus commission
6.       Motivating the sales force
7.       Evaluating and controlling the sales force

Sales Promotion

         Sales promotion refers to many kinds of incentives and techniques directed
towards consumers and traders with the intention to produce immediate or short-term
sales effects.

         Sales promotion offers a direct inducement to act by providing extra worth over
and above what is built into the product at its normal price. These temporary inducements
are offered usually at a time and place where the buying decision is made. Not only are
sales promotions very common in the current competitive market conditions, they are
increasing at a fast pace. These promotions are direct inducements. In spite of the
directness, sales promotions are fairly complicated and a rich tool of marketing with
innumerable creative possibilities limited only by the imagination of promotion planners.
Sales promotion is often referred to by the names of „extra purchase value‟ and „below-
the-line selling‟. (http://drypen.in/sales-promotion)

        There are two categories of sales promotion: trade promotions, which are geared
toward the members of the distribution channel such as the wholesalers and retailers; and
consumer promotion, which are aimed at consumers.

Sales Promotion Geared Toward Wholesalers and Retailers

     1. Trade shows
        These are events at which many companies set up elaborate exhibits to show
        their products, give away samples, distribute product literature, and troll for new

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       business contacts. Trade shows are major vehicles for manufacturers to show off
       their product lines to wholesalers and retailers

   2. Contests (or games)
      These are promotional events that give consumers the chance to win
      something—such as cash, trips, or goods—by luck or through extra effort.

   3. Display equipment and point-of-purchase materials
      Display equipment such as dispensers and other point-of-purchases materials are
      provided to retailers and wholesalers so that they can conveniently display or
      highlight the product to be sold.

   4. Cooperative advertising and promotion
      Suppliers share promotional expenses with their retailers or wholesalers.

   5. Allowances
      Promotional money paid by manufacturers to retailers in return for an agreement
      to feature the manufacturer‟s products in some way. An advertising allowance
      compensates retailers for advertising the product. A display allowance
      compensates them for using special displays.

Sales Promotions Aimed at Ultimate Consumers

   1. Product sampling
      New customers are given a sample of the product for trial use.

   2. Coupons
      A coupon is a certificate that gives
      the buyer a saving when they
      purchase a specified product.
      Coupons can stimulate sales of a
      mature brand or promote early trial
      of a new brand.

   3. Rebates
      With a rebate, a consumer gets money back from the manufacturer. It is a price
      reduction designed to induce immediate purchase.

   4. Contests and sweepstakes
      Contests and sweepstakes stimulate purchases by giving consumers a chance to
      be big winners.

   5. Premiums
      A premium is a product offered free or at a reduced price when another product,
      the key brand, is bought.




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                                                 6. Multiple-purchase offers
                                             Multiple-purchase offers, such as offering
                                             three products for the price of two,
                                             encourages bigger than normal purchase and
                                             helps maintain customer loyalty.


    7. Point-of-purchase materials
       Banners, pamphlets, coasters, and other similar products may be used to provide
       information at the point of purchase.

    8. Product placements
       When a certain product brand is worn or used by a celebrity in a movie or
       television show, a very positive message is communicated in a noncommercial
       setting.

    9. Sales promotion tie-ins
       A tie-in involves a collaborative effort between two or
       more companies that work as partners in a
       promotional undertaking. Tie-ins generally borrow
       interest value from movies, sporting events or other
       marketing efforts. When McDonald‟s sells a Happy
       Meal that includes the Smurfs characters, its sales
       promotion effort is based on a tie-in with the popular
       Sony Pictures and Columbia Pictures movie.


Advertising and Public Relations

Nature and Scope of Advertising

        Advertising is a persuasive message carried by a non-personal medium and paid
for by an identified sponsor. All advertisements have four features, namely: (1) a verbal
and/or visual message, (2) a sponsor who is identified, (3) delivery through one or more
media, and (4) payment by the sponsor to the media carrying the message.


Types of Advertising


According to the target audience, advertising may be classified as consumer advertising
or business-to-business advertising. With BusinessWorld‟s excellent news coverage and
style of reporting, a readership survey conducted late last year by an independent research
group revealed that subscribers pass their copies on to an average of five other persons.
Its subscribers are trendsetters and decision-makers -- leaders in business, industry and
government, both here and of governments and corporations abroad that are keen on
Philippine business updates.


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General broadsheets included, BusinessWorld ranks fourth in the industry in terms of
advertising revenues. This, despite its six days a week frequency compared to the seven
days of the other papers.

         According to what is being advertised, advertising may be product (or service) or
institutional (or corporate). Product advertising focuses on a particular product or brand.
It is subdivided into direct-action and indirect-action advertising. Direct-action
advertising seeks a quick response like an ad urging the reader to send or call
immediately for a free sample. Indirect-action advertising is designed to stimulate
demand over a longer period of time. Most television advertisements are of this type.
Institutional advertising aims to create a good attitude, build goodwill, and present
information about the advertiser‟s business. There are two forms: customer service
advertising (e.g., when Jollibee describes the level of personal service available) and
public service advertising which is designed to improve the quality of life and show that
the advertiser is a responsible member of the community.

        According to the objective sought, advertising may be primary-demand
advertising or selective-demand advertising. Primary-demand advertising is designed to
stimulate demand for a generic category such as vitamins, milk, or cotton garments.
Selective-demand advertising is intended to stimulate demand for individual brands such
as Centrum Multi-Vitamins, Bear Brand Milk, and Giordano Shirts.

Developing an Advertising Campaign

        An advertising company consists of all the tasks involved in transforming a
theme into a coordinated advertising program to accomplish a specific goal for a product
or brand. Before designing an advertising campaign, management must undertake the
following: (1) identify the target audience, (2) establish over-all promotional objectives,
and (3) determine an over-all promotional theme.

Characteristics of the Major Media

Radio. The radio‟s big advantage is its relatively low cost. It reaches far and wide.
However, although the exposure life of a radio commercial is quite short resulting in a
need to deliver multiple exposure to gain impact, its strong point is that it is able to
stimulate the imagination of the listener.

Television. It is the most versatile and the most rapidly changing of all media. It makes
its appeal through both the eye and the ear. Products can be demonstrated as well as
explained on television. However, television can be an extremely expensive medium.

Magazines. Magazines are an excellent medium when high-quality printing and color are
desired in an advertisement. They reach a national market at a relatively low cost per
reader and have a relatively long life, from a week to a month, and a high pass-long
readership.




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Newspapers. They are flexible and timely. They can be used to cover a single city or a
number of urban centers. The advertisements in a newspaper can be adapted to local
audience and to social and economic conditions. Circulation costs per prospect are low.
However, the life of a newspaper advertisement is very short.

The Philippine Daily Inquirer has the following display ad rates:




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            Direct Mail. It is the most personal and selective of all the media. There is minimum
            waste circulation because it reaches only the market that the advertiser wishes to contact.

            Out-of-Home Advertising. This includes billboards, posters, bus ads, and the new
            electronic digital billboards. This medium has a low cost per exposure and reaches a large
            percentage of the population. Because it is typically seen by people on the go, billboard
            advertising (or outdoor advertising) is appropriate only for brief messages and is
            excellent for reminder advertising.




Billboard                      Bus Ad


            Specialty Advertising. Specialty advertising is an item of merchandise imprinted with the
            advertiser‟s name, message, or logo and is given for free. Examples of this item are pens,
            baseball caps, coffee cups, and calendars. The greatest strength of specialty advertising is
            its long life. Every time the special item is used, the advertising message is repeated.

                                                          Emerging Media. These are lesser-known
                                                          media used to conjunction with better-
                                                          known media.

                                                          Yellow Pages. The Yellow Pages are a
                                                          directory of local businesses and their
                                                          telephone numbers, organized by type of
                                                          product or service.




                       Specialty Advertising



                                         Yellow Pages



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Infomercials. These are lengthy television advertisements that generally run up to sixty
minutes and combine information with entertainment and product promotion.

Place-Based Media. There are advertisements placed where people are, as in airports,
shopping malls, waiting sheds, supermarkets, phone booths, and even public comfort
rooms.

Videos and CD-ROMs. Many advertisers place their ads to reach video watches in video
rentals. Other companies get their messages into the hands of prospective customers by
having their own videos and CD-ROMs produced and mailed directly to target
customers.

World Wide Web. Many companies have had Web pages created to reach their target
market. One of the advantages of this medium is that it allows the customer to seek out
the advertiser.

Scheduling

        The media schedule or media plan is a time schedule identifying the exact media
to be used and the dates when the advertisements are to appear. Selecting specific media
vehicles such as Candy and Seventeen magazines requires managers to consider reach
and frequency. Reach is the number of people exposed to an advertisement in a given
medium. Frequency is the number of times an individual is expected to be exposed to an
advertiser‟s message.




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