8: Advertising, Public Relations, and Promotion
Probably the most obvious of "marketing" activities is communication with the public, which is typically classified as advertising (paid commercial messages that are geared to generate interest), public relations (messages about the company or its products that do not involve direct payment), and promotion (messages that are intended to generate sales in the short run)
(EN: The author seems to use the term "promotion" as a general term for all three, and "sales promotion" when discussing promotion proper - I will attempt to follow the same convention in these notes.)
Promotion as Communication
The author attempts a quick survey of the communication model: a sender transmits a message to a received through a given medium with the intention of eliciting feedback. In terms of marketing, the intention is to stimulate individuals to take an action that has financial benefit to the sender (generally, purchase a product), whether this is immediate and direct (sales promotion) or indirect and indefinite (image marketing).
Crafting an effective message and choosing an appropriate medium are critical decisions. An inappropriate message might be offensive to the target market, and in mass marketing, a message that is appealing to a target market might be offensive to unintentional receivers. There's also a brief mention of language problems when an advertisement for one market is taken overseas.
A particular challenge for marketing communications is that the most productive audience to reach (people who do not currently intend to buy) is disinterested and potentially hostile, and ti takes considerable effort to grab their attention and garner their interest while stopping short of creating a negative impression by being too aggressive.
For traditional media, obtaining feedback can be difficult. Generally, market research and sales results are used to gauge impact, but these are observational and indirect, and often cannot count on the universe of factors, other than a recent communication, that may have influenced buyer behavior. (EN: The author doesn't mention new media, where behavior is more measurable - but even in the best of cases, a lot of assumptions are implicit.)
Promotional Management
To ensure consistency and maximize the overall effectiveness, a company's promotional efforts should be managed as a whole rather than done in an uncoordinated and opportunistic manner. However, each promotional "opportunity" should be evaluated in the context of the overall strategy.
The author identifies some key factors to consider:
- Promotion is most effective when there is growth in the market (informative marketing to attract new consumers to your brand), less effective in maturity (persuasive marketing to winning customers from competitors, reminder marketing to keep customers you ahve), and largely ineffective in decline (when overall demand is failing)
- Promotion must be based on product differentiation. If you cannot convince the audience your product is better ("cheaper" = better price) than alternatives, there is little value in promotion
- Promotion can be more effective when you can "teach" the market about product qualities or features that they are not already aware of
- Promotion can be effective if there are strong emotional buying motives, such as esteem or social belonging
- Promotion is costly, which may limit the ability of some firms to engage in effective promotion (they may not be able to afford it, or do not feel that the potential results justify the expense)
Companies seldom rely on one method of promotion, but instead manage a "promotional mix" that considers all promotional opportunities is determining which methods have the greatest potential and which opportunities are worth pursuing. The primary consideration is whether the opportunity is a cost-effective way to communicate to a target market, but it may also be impacted by other considerations (such as legal requirements for disclosure, which made it unfeasible to advertize pharmaceuticals on television or radio until only recently, or prohibition against advertizing products like alcohol or tobacco in many media).
As for creating (or justifying) promotional budgets, there are a variety of approaches: an arbitrary amount may be provided; budget may be allocated based on percentage of sales predictions; a fixed sum per unit may be defined; firms may seek to match the promotional expenditures of their competition; or a campaign may attempt to cost-justify promotion based on the goals of a given campaign.
Advertising
Paid advertising has long been the dominant form of promotion in the American market, with immense sums spent on an array of campaigns in various media (television, radio, magazines, newspapers, billboards, signage, etc.). Some examples are given of commercial messaging that became widely familiar and were used outside of a commercial context.
Most advertising falls into the category of "product advertising", which is intended to stimulate interest in a particular good or service, but there has been an increase in institutional advertising of late, which is designed to affect public sentiment about a company (which may drive sales, or may influence public opinion in favor of the company.)
(EN: The author omits brand advertising, which is something of a hybrid of the above, as well as image advertising, which could be classified as institutional advertising that applies to something other than a company - such as an individual.)
Advertising can also be classified according to its intended audience: the ultimate consumer, a decision-maker, the supply-chain intermediaries, prospective employees, shareholders, an industrial group, the voting public, etc.
Generally, advertising strategy and budgeting decisions are made by ranking marketing executives, with the actual creation, placement, and daily management assigned to staff. In some companies, certain functions are assigned to other business units (product packaging may be in the operations silo, but include marketing functions).
There is some mention of engaging external agencies for marketing and advertising services rather than having staff dedicated to the job. Aside of noting that the firm must manage the client-agency relationship, not much is said on this topic.
Advertising Management
Measuring Effectiveness
The total advertising activities of a company are organized into "campaigns," each of which has one or more specific objectives by which the success of that campaign, and the individual activities within it, are measured.
The objectives of advertising, as opposed to sales promotion, tend to be indirectly related to product sales: a company may want to increase brand awareness, gain market share, attract a new market segment, announce product improvements, influence the image or perception, reduce public anxiety, or other similar goals.
The objectives are generally measured by marketing research. For example, a survey can be done to measure brand awareness in a market before an advertisement is run, then re-done to compare the change in awareness during and after the campaign, based on the assumption that the campaign "caused" the change.
Developing a Campaign
An advertising campaign is a set of actions indicated to achieve one or more of the advertising goals for one or more of the company's market segments. Typically, a "campaign" is a set of messages that is tied to a theme.
Each advertisement is based on a message that is targeted to a specific audience with a specific goal in mind. The author dances around the topic of crating an effective advertising message, and indicates that many books have been written on the subject, that it is generally based on psychological theories of motivation, includes an explicit and implied message, etc. (EN: there's more, but it strikes me as a random collection of superficial details.)
Once the message is crafted, the marketer selects the appropriate media for communicating the message - such as television, radio, newspapers, magazines, and displays - with an eye toward using media the will reach the largest number of individuals in its target market for the lowest per-capita cost. However, other factors might be taken into account, such as whether the medium in question can effectively communicate the desired message, and whether the media is in line with the product's brand image, which media competitors are using, etc.
Budgeting for Advertising
Advertising dollars are spent with the intention of generating income, and the ideal model would be one in which the last dollar of advertising spend generates one dollar of additional income (such that any subsequent ad spend would earn less than its cost). However, the exact relationship is difficult to estimated, and requires some degree of approximation.
More often, advertising budget is set at an arbitrary level, based on the performance of previous advertising campaigns. This is inefficient, and assumes that all campaigns are equally effective and have equal potential - so while past performance should be taken into account, other factors should be considered.
Advertising Effectiveness
Assessing the effectiveness of an advertisement or campaign is generally done by taking a measurement of some factor (product sales, brand awareness, consumer opinion) before the promotion, then again after the promotion, on the assumption that the promotion was the only possible thing that may have changed the factor. Naturally, this is not strictly true, but unless there is a specific identifiable event, it is a reasonable assumption.
One caution is made about measuring sales performance as the sole or primary measure of effectiveness, in that advertising, unlike sales promotion, has an indirect effect that may have delayed results: a advertisement today may make a consumer aware of a brand of tires, but it may be months or years later when they need to purchase the product, so today's advertising created an awareness that does not result in sales until significantly later.
There are other methods for measuring an advertisement's "effectiveness," which range from test groups to laboratory observation (monitoring blood pressure, pupil dilation, skin temperature, etc.), but these methods merely measure the reaction to the message, often under artificial circumstances, and often on a separate set of assumptions, and often highly specious ones (pupil dilation will result in more sales).
Public Relations
Public Relations refers to any activities undertaken by a business or organization to communicate a message to the public without making direct payment for delivering a message. This may include issuing press releases (a newspaper may choose to run a story, but is not paid to do so), sponsoring charitable events (the money given to the charity or spent on an event is not a direct pay-for-promotion fee), or other actions.
The term "publicity" is used in reference to employees or consultants who interact with the media to provide information, whether proactively (to promote a positive public image) or reactively (to mitigate the bad press in the wake of a disaster.
Sales Promotion
Sales promotion is a term that is intended to provide incentive to a buyer to make a near-term purchase. Promotion may be aimed at the consumer or at an intermediary (often called a "dealer promotion," which is sometimes passed along to the consumer). A promotional message may simply be a call to "buy today," but usually involves some additional form of incentive.
Incentives in consumer promotions may involve discounts, premiums (something "extra" taht comes with purchase), a free sample, a coupon, a product demonstration, or a contest or sweepstakes. Incentives for dealers are often more practical: assistance in the form of promotional assistance or allowances, contests among dealers, etc.
Meetings, conventions, and trade shows are a common venue for promotion to distributors, but are also becoming increasingly common in consumer markets, especially for high-ticket items. In densely populated areas, it is not uncommon for various companies to collaborate to put on a "car show" or a "wedding expo" for consumers. In addition to promotion, these events are excellent venues for conducting research and gathering feedback.
"Frequency Marketing" is considered a form of promotion. This practice includes frequent flyer programs, supermarket discount cards, and the like. It involves providing customers with a promotional incentive for allowing their buying behavior to be monitored, and additional promotions for certain levels of purchasing over time.
(EN: Scant attention is given to frequency marketing, though it's of particular interest lately. The focus on customer relationship with a company, brand, or product and the desire to improve share-of-wallet and lifetime value are extensions of frequency marketing, though they tend - or should tend - to take a softer and more advertising-like approach in building a relationship with a brand rather than constantly pimping product.)