How to Establish a Promotional Mix

2000
WHAT TO EXPECT
Even a superior product doesn't sell itself. Your customers need information about your product or service before they
buy it. The ways you communicate features and benefits to your potential customers is called a promotional mix. This
Business Builder will explain how you can maximize your company's promotional mix for best results.
top!
". Determine Your Budget
# common method of establishin$ your promotional bud$et is to estimate what your competitors spend and
then match it. You do this by monitorin$ their ads% promotions and special events they sponsor. &hile this
lac's precision% it provides a ballpar' estimate.
(nce you $ather data about your competitors' promotional bud$ets% don't copy your rivals' spendin$ habits or
promotional mix. )se your information as a $uide.
# more exact way to determine your bud$et is to assemble a wish list of promotional methods you want to use
to meet your ob*ectives. +ma$ine that money isn't an issue. Then usin$ actual rates for print and broadcast
advertisements and estimated costs for sales promotion and publicity% determine each activity's dollar cost.
Then scale the list down until you have a reasonable bud$et.
Television and national print advertisin$ may prove too expensive or inappropriate at this time. +n any case%
consider testin$ a ran$e of techni,ues rather than investin$ your promotional dollars in one area. &hy-
Because promotion re,uires experimentation. +t may ta'e several months and dozens of tests to uncover the
most effective mix for your company. Expect to reevaluate your bud$et and ma'e ad*ustments as you $o
alon$.
Establishin$ an effective promotional mix cannot occur if you allocate resources sporadically. .or your
mar'etin$ messa$e to produce results% promotional activities must occur on a re$ular basis. /onsumers
rarely ta'e immediate action and may benefit from repeated exposure to your messa$e before they buy.
2. Determine Your Promotional Mix
0ow that you have completed all of the precedin$ steps% it's time to formulate your actual promotional mix.
The most common method for actually puttin$ your mix on paper is to express it as a percenta$e of your
overall promotional bud$et.
Examle !" (ur upscale *eweler's promotional mix based on a bud$et of 12%000 mi$ht loo' somethin$ li'e
this3
204 5irect 6ail3 5irect76ail /ampai$n
12%200
804 #dvertisin$3 9rint #ds in :ocal :ifestyle 6a$azine 12%000
"04 ;ales 9romo3 /oupon +n 5irect76ail :etter .or .ree #ppraisal
1200
Examle #" The promotional mix of the ma'er of a candy bar that fi$hts tooth decay with the same bud$et
mi$ht loo' somethin$ li'e this3
224 9ublic <elations3 9ress <eleases
1"%220
224 #dvertisin$3 9rint #ds in :ocal 0ewspapers and 5ental 9ublications 1"%220
204 ;ales 9romotion3 9roduct ;amples% /oupons% /ontest
12%200
#lways inte$rate and coordinate the various tools you use. .or example% sales promotion can be inte$rated
with advertisin$ by announcin$ a contest in a print advertisement. 9ublic relations efforts should try to
produce results at the same time advertisements are scheduled to appear. 5irect7mail letters should be sent
the same wee' a new sales promotion be$ins.
Exer$ise" De%ine &our mix
.ormulate a specific brea'down of your promotional mix.
1. 6y time frame for testin$ a promotional campai$n3 =======.
2. 6y promotional bud$et3 1========.
3. 6y promotional mix3 use format of above examples!
>. Measure the 'esults o% the imlemented rogram and Ad(ust as needed
+ncreased sales will be the yardstic' you use to measure each promotional vehicle you employ. #dvertisin$ is
often the hardest to measure. Exceptions3 #llow print readers to clip a coupon or send in an order form% or
invite radio or T? audiences to call an @00 toll7free number.
You will need to evaluate and chan$e your promotional mix not only to correct ineffective promotional vehicles
but also to ad*ust for $rowth.
#fter one year on the mar'et% our candy7bar ma'er will need to re7evaluate the mix3
Total Bud$et
1"0%000
A04 #dvertisin$3 9rint #ds in 0ational /onsumer and 5ental 9ublications 1A%000
804 ;ales 9romotion3 9roduct ;amples% /oupons% 9oint7of79urchase 5isplays
Note: Public relations is now gone from the mix because the novelty of the product has worn off, and the
product is no longer newsworthy. Advertising represents a higher percentage as this company moves to
increase its national exposure. This particular company has found that advertising to dentists is important
18%000
because they recommend it to their patients and that sales promotions have yielded effective results.
Sample Promotional Mix
Coman&" 9ampered 9ets 9et ;ittin$ ;ervice B Employees $o into people's homes to feed pets% ta'e them
for wal's% chan$e litter boxes
Target
Mar)et"
C 9eople who wor' lon$ hours and don't have enou$h time to ta'e care of their pets
C 9eople who are $oin$ on vacation and don't want to put their pets in a 'ennel and don't have
anyone who could stay at their house
C Elderly people who are unable to care for their pets but want to 'eep them
Communi$ation
Ob(e$ti*es"
&e need to3
C introduce our service to the public
C create awareness of our service
C $et people to use our service% not our competitor's
C $et veterinarians to recommend our service
C have at least one veterinarian a$ree to treat our clients' pets on an emer$ency basis% a feature
that competitors don't offer
Design Message
Content" +f you care about your pet's welfare when you aren't home% then you will use our servicesD+t's so
convenient and reasonably priced that you can't afford not to use our services
+ormat" .liers% brochure% ads in local newspapers and Yellow 9a$es
Promotional
Methods"
Ad*ertising
Yellow 9a$es% local newspapers
,ales Promotions
/oupons that can be punched out B " punch per day% after 20 punches% $et one day free or at
discounted rate
Publi$ 'elations
0ot applicable at this time. #s business $rows% we plan to offer to contribute part of customers'
payments to an animal shelter.
Dire$t Mar)eting
.liers in mailboxes throu$hout local nei$hborhoods% to veterinarians% apartment complexes where
elderly live% to pet shops. #s business $rows% we will send a newsletter to customers.
Personal ,elling
To veterinarians% pet shop owners% travel a$ents% apartmentDcondominium mana$ement to refer
people to our services. This only re,uires existin$ personnel time% no added bud$et cost incurred
here.
Budget" .ive hundred brochures for display in pet shops and veterinarian offices will cost 1"20. #s business
$rows% we will expand to two7color pieces. .liers can also be created inexpensively. Two hundred
fliers will cost 120 to copy on colored paper Edistribute in sprin$ and summerF. Yellow 9a$es ad will
be limited to an informational in7column listin$% " inch for 1>00 for the year in the local boo'. This
boo' is sufficient. ;mall ads in the local newspaper will cost 1>00 for two placements. <olodex
cards will cost 1"A0 for 200. .ive hundred punch7out cards will cost 12G.
Total promotional budget: $977
Do-It-ourself Advertising and Promotion! "ow to Produce #reat Ads, $rochures, %atalogs, Direct &ail, 'eb (ites and
&ore% >rd edition% by .red E. Hahn and Ienneth J. 6an$un. E&iley% 200>F. K#nd moreK includes trade shows and
telemar'etin$.
$usiness to $usiness Direct &ar)eting! Proven Direct *esponse &ethods to #enerate &ore +eads and (ales% 2nd ed.
by <obert &. Bly. E0T/ Business% "LL@F.
&ar)eting &anagement! The &illennium ,dition by 9hilip Iotler. E9rentice Hall% "LLLF.
The -- Immutable +aws of Internet $randing by #l <ies and :aura <ies. EHarperBusiness% 2000F.
-.- 'ays to Promote our 'eb (ite! /illed with Proven Internet &ar)eting Tips, Tools, Techni0ues, and *esources to
Increase our 'eb (ite Traffic% 2nd ed. by ;usan ;weeney. E6aximum 9ress% 2000F.
-nternet ,ites
&ilson +nternet &eb 6ar'etin$ M E7/ommerce
Topica
&eb 5i$est for 6ar'eters
Asso$iations
The 5irect 6ar'etin$ #ssociation
+nternational #ssociation of Business /ommunicators
The 9ublic <elations ;ociety of #merica
Publi$ations
Target &ar)eting
Writer" 6orey ;tettner
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Promotional Mix Checklist
1. What are your promotional goals?
2. How much of your budget will you commit to promotion and advertising this year? In the
next five years?
3. How much of your promotions budget can you assign to each promotional tactic and is it
enough to achieve your desired results?
!. Which promotional tactics reach your target mar"et most effectively and at the least cost?
#. What special features of your business should you promote?
$. %hould promotions be concentrated at certain times of the day month or year?
&. How do your present customers find out about your business? '(dvertising personal sales
calls brand awareness referral wal")in direct mailings sales promotion or word)of)
mouth?*
+. What messages should be sent to your target mar"ets? How will these messages set you
apart from your competition?
,. (re your advertising messages clear concise simple and consistent? -o they describe
benefits for customers and do they give your address and phone number?
1.. What training do you offer salespeople? How do you evaluate their performance?
Marketing Communications
Copyright 1999 by Gemmy Allen, all rights reserved.
Chapter 9 Study Guide
Through effective communications, mareters attempt to build product category needs,
create brand a!areness, and facilitate purchases. Communication is the process of
establishing commonness or understanding bet!een a sender and a receiver. Integrated
marketing communications (IMC) is the coordination of all promotional activities to
produce a unified customer"focused message. Someone in the organi#ation is responsible
for integrating and coordinating all communications in order to deliver a clear, consistent,
and compelling message about the organi#ation and its products. $%C begins !ith the
identification of consumer needs. $t includes managing every aspect of the image an
organi#ation !ants to deliver, !hich involves coordinating the loo and feel of each
element, as !ell as coordinating the timing of various promotion elements. Then the
organi#ation must deliver that image through everything that they do, because everything
communicates something about the brand. The increasing comple&ity and sophistication
of mareting communications re'uires careful promotional planning to coordinate $%C
strategies.
Model o Communication
The functions of communications include informing, persuading, reminding, adding
value, and assisting other organi#ational efforts. The communication process consists of
the follo!ing elements(
A source )or sender* has thoughts to share !ith others. The sender
includes the organi#ation advertising, a spoesperson, or a salesperson.
Celebrities are often used in advertising because they represent the desired
'ualities that an advertiser !ishes to associate !ith its brands. A celebrit!
is a personality !ho is no!n to the public for his or her accomplishments
in areas other than the product class endorsed.
The source encodes or translates ideas into a message.
The message is a symbolic e&pression of a sender+s thoughts. After
defining the target audience and the desired response from this target
audience, the mareter designs an effective message that !ill achieve the
communication ob,ectives. The AIDA model defines a good message the
stages a receiver should go through. $t gains the receiver+s attention, holds
interest, arouses desire, and obtains a desired action. A hierarchy-of-effects
model of consumers- responses to advertisements implies that for
advertising to be successful it must move consumers from one ob,ective to
the ne&t ob,ective, much in the same !ay that one climbs a ladder . one
step at a time until the top of the ladder is reached. $n designing a
message, decisions need to be made about the message content, message
structure, and message format. Rational appeals relate to the audience+s
self"interest. These appeals simply relate the rational benefits of the
product and e&plain ho! the product !ill satisfy the functional needs of
consumers. Emotional appeals attempt to stir up positive or negative
emotions that can motivate purchase. /rgani#ations looing to discourage
undesirable behavior by directing an audience to 0!hat is right1 use moral
appeals. 2idely used advertising techni'ues include humor, fear appeals,
guilt, se& appeals, subliminal messages, the use of music, and comparative
advertisements.
A c"annel is the path used to transmit the message. %areters select the
promotional media that best target and reach customers. Media refers to
the entire set of channels through !hich it is possible to transmit messages
to some people or the entire public. The channel can tae the form of
broadcast )T3 and radio*, print )ne!spapers, maga#ines, direct mail*,
display media )billboards, signs, posters*, or electronic )$nternet !eb
pages, disette presentations*. $f the function of a channel is to distribute
the same message to many people simultaneously it is considered a
nonpersonal communication c"annel or mass medium )television,
radio, ne!spaper, maga#ine, billboard*. 4e!spapers and television
represent the largest advertising media categories. 4o interaction is
possible bet!een mass media and their receivers5 they carry messages
!ithout personal contact or feedbac. $f the channel is only able to
transmit a message to one person at a time it is considered a carrier
)telephone*. $n addition, a carrier permits interactivity )the ability to
respond and react* bet!een sender and receiver. $n a personal
communication c"annel, sender and receiver communicate directly !ith
each other over the telephone, face to face, through the mail, or through
$nternet chats. 6irect contact !ith consumers by company salespeople
forms a common personal communication channel.
The $nternet is both a mass medium and a carrier. $t can reach many
people simultaneously and provide a high level of interaction. The
dialogue bet!een mareter and customer is al!ays evolving. The $nternet
can be used by mareters to create individual dialogues and even to
change a message as mareter and customer get to no! each other. This
provides the basis for the one"to"one mareting process that is at the center
of contemporary consumer mareting activities.
The $nternet is an e&citing and po!erful addition to traditional media. $nteractive
media represents the fastest gro!ing type of media. $nteractive advertising
directly involves the vie!er, !ho controls ho! much information he or she
receives. The interactive t!o"!ay communications capability of the $nternet,
combined !ith its broad and rapidly gro!ing acceptance around the !orld, has
attracted advertisers. The $nternet provides a medium for promotion that can be
used to identify prospects, collect information profiling those prospects, and
e&ecute micro"segmentation promotion delivery strategies. /nline promotional
content can be tailored to current or past customer behavior, attributes, no!ledge
or prior buying behavior, or a combination of all three.
A recei#er is the person or group !ith !hom the sender attempts to share
ideas. %areters !ant a response, the reactions of the receiver after being
e&posed to the message.
The receiver decodes or interprets the message. 7or a message to be
decoded by a receiver the !ay it !as intended by the sender, the sender
and receiver need to have some shared fields of experience. A receiver
may not decode a message )in the !ay it !as intended* if his or her
bacground and e&periences differ greatly from the sender+s. %areters
must be sensitive to the audience.
$oise interferes !ith or disrupts effective communication. $t includes any
unplanned distortion during the communications process that results in the
receiver getting a different message than the one sent by the sender.
%eedback is monitoring and evaluation ho! accurately the intended
message is being received. After sending the message, it is important to
collect feedbac in order to monitor the effectiveness of the
communication. %areters conduct research by asing consumers their
recall of ads, their attitudes to!ards products )after e&posure to the ad*,
their evaluations of ads, etc. 7eedbac is used to modify promotional
programs to mae them more effective.
There are si& steps to developing effective mareting communication.
1. $dentify the target audience. The audience may be potential buyers or current users,
those !ho mae the buying decision or those !ho influence it.
8. 6etermine the communication ob,ectives. 9uyers go through buyer"readiness stages
)a!areness, no!ledge, liing, preference, conviction, and purchase*.
:. 6esign a message. 6etermine the message+s content )rational, emotional, or moral
appeals*, message structure, and message format.
;. Choose the media. The media planner considers !hether it !ould be best to use
personal communication channels or nonpersonal communication channels to transmit
the message to target buyers. 2ord"of"mouth influence has a strong effect.
<. Select the message source. Credibility is e&tremely important in a maretplace that is
bombarded !ith a stream of never"ending messages.
=. Collect feedbac. %ae corrections to fine"tune the promotional effort.
Promotional Mix
7our common methods are used to set the total promotional budget. $n the aordable
met"od, organi#ations simply tae care of their business e&penses and then determine
ho! much they thin they can afford to spend on promotion. $n the percentage&o&sales
met"od, the budget is set at a certain percentage of current or forecasted sales. The
competiti#e&parit! met"od of budget setting taes advantage of the collective !isdom
of the industry. /rgani#ations get industry averages and base their promotional budget on
those industry averages. >romotion spending is increased !hen competitor spending
increases and decreased !hen competitor spending decreases. The best approach to
setting budgets is the ob'ecti#e&and&task met"od. According to this approach, the
mareter first sets clear ob,ectives for promotion, determines the tass it !ould tae to
achieve the ob,ectives, and then adds up the costs of the tass.
Several factors need to be considered !hen setting the promotional budget.
Stage in t"e product lie c!cle( 2hen consumers are unfamiliar !ith a
product building early a!areness and trial is e&pensive. As a result,
products in the introduction stage of the product life cycle have larger
budgets than products in the later stages of the life cycle. Traditional
media companies are the single biggest beneficiaries of $nternet initial
public offerings )$>/s*. The primary use of $>/ money is mareting a
company-s brand to consumers and to encourage people to go online. 7or
e&ample, sales and mareting costs for i3illage ,umped to nearly ?8@
million in 199A from ?<.1 million in 199B. Ceading up to its $>/ in
%arch 1999, i3illage ran commercials on radio in San 7rancisco, Chicago
and 4e! Dor and on T3 channels such as Cifetime, the !omen-s cable
net!or.
Market s"are( %aret share affects budgets in t!o !ays. 7irst, an
organi#ation !ith a large current market share needs a higher budget as a
percentage of sales than an organi#ation !ith a lo! maret share. Eigh"
maret"share organi#ations are the target of competitive actions and
defending the large maret share is e&pensive. Second, an organi#ation+s
desired market share influences the budget. %aintaining maret share
taes fe!er resources than building share. 7or e&ample, online companies
that are trying to build maret share before and after going public on 2all
Street are spending more than ever on advertising and promotion.
$ncreasingly online companies are spending their ad money !ith long"
established branding mediums( radio, T3 and billboards. After going
public, $nternet companies lie C64o! $nc. and Ama#on continue to use
traditional media to reach the masses of people !ho aren+t yet online.
Sales and mareting costs for C64o!, !hich !ent public in early 199A,
climbed to ?B9 million in 199A from ?<< million. $n its prospectus,
C64o! states that Ftraditional advertising is a ey ingredient in building
brand and recognition and promoting the benefits of online retail
shopping.F
Clutter: 2hen there are many organi#ations competing for a share of the
consumer+s heart and mind, it !ill tae a larger budget to rise above the
clutter and be heard by the consumer. $n 199A, 9arnes G 4oble $nc.-s
9arnesandnoble.com spent ?1A.< million "" mostly in net!or radio as
!ell as local television "" beating out archrival Ama#on.com, !hich spent
?1B.B million.
%re(uenc!( %essages tae several repetitions to be comprehended by
consumers. Greater fre'uency re'uires a larger budget.
Product dierentiation( $n product categories !here consumers don+t
perceive a great deal of difference bet!een brands, mareters spend a
great deal of money to differentiate their brands and create clear positions
in the minds of consumers. $f brands are perceived as differentiated,
budgets may be smaller.
)d#ertising
Advertising is the most visible form of nonpersonal promotion and is designed to inform,
persuade, or remind. )d#ertising is any paid form of nonpersonal presentation of ideas,
products, or services by an identified sponsor. Product ad#ertising places a message to
promote a good or service, !hile institutional ad#ertising promotes a concept, idea, or
philosophy. %a,or decisions in advertising include ob,ective setting, budgeting, message
strategy, and media strategy. Advertising ob,ective setting depends on the pattern of
consumer behavior and information that is involved in the particular product category.
Hffective advertising must )1* e&tend from sound mareting strategy, )8* tae the
consumer-s vie!, ):* be persuasive, );* brea through the competitive clutter, )<* never
promise more than can be delivered, and )=* prevent the creative idea from over!helming
the strategy.
Advertising is used to reach large numbers of consumers !ho are geographically
dispersed. >roducts can be dramati#ed through the use of color, sound, and visuals. $t is
effective at building a!areness, no!ledge and a long"term image for the product. /n the
other hand, advertising is impersonal, e&pensive, and not adaptable to individual
consumers. $t is difficult to measure the effectiveness of advertising campaigns.
Internet ads include banners, sponsorships, and rich media. A banner is an ad on a 2eb
page5 often using moving images and sounds as !ell as te&t. Clicing on a banner usually
taes the user to an advertiser-s 2eb site. Sponsors"ips, !hich cost more than simple
banner ads at the corner of a 2eb page, sho!case a message much more prominently.
Also popular are ric" media ads !ith video"lie images, including flying golf balls and
!iggling fingers, !hich are meant to engage 2eb surfers.
Inormati#e ad#ertising is used to inform consumers about a ne! product or feature and
to build primary demand. As most of the target audience becomes a!are of the product
and competition in the category increases, organi#ations move to persuasive advertising
!hich has the ob,ective of building selective demand for a brand by persuading
consumers that it offers them the best value. 2hen a brand is directly or indirectly
compared to a competitor, it is no!n as comparison ad#ertising* The basic advantage
of comparison advertising is that it provides information that potentially helps consumers
mae better purchase decisions. This saves consumers the effort of finding the
information from other sources, and helps producers of innovative products to position
their products on the basis of competitive superiority. 7or mature products of !hich
everyone is a!are, advertisers use reminder ad#ertising. The ob,ective is to remind
people about the brand.
%edia planning must be coordinated !ith mareting strategy and !ith other aspects of
advertising strategy. The strategic aspects of media planning involve four steps(
)1* selecting the target audience to!ard !hich all subse'uent efforts !ill be directed5
)8* specifying media ob,ectives, !hich typically are stated in terms of reac" )2hat
proportion of the target audience must see, read, or hear our advertising message during a
specified periodI*, re(uenc! )Eo! often should the target audience be e&posed to the
advertisement during this periodI*, gross rating points or +,Ps or eecti#e rating
points or -,Ps )Eo! much total advertising is necessary during a particular period to
accomplish the reach and fre'uency ob,ectivesI*5
):* selecting general media categories and specific vehicles !ithin each medium5 and
);* buying media.
Cost per t"ousand (CPM) allo!s a media planner to compare media based on t!o
variables( audience and cost. C>% is used as a comparative device. The lo!est cost per
thousand medium is the most efficient, all other variables being e'ual. C>% may be
computed for a printed page or broadcast time, and the audience base may be either
circulation, homes reached, readers, or number of audience members of any ind of
demographic or product usage classification.
%edia planning soft!are !ith advanced features for entry level users !ho do not
subscribe to syndicated media data or !ish to combine plans from various sources is
available. A6plusJ, Kuic%i&J, and 7lo!%asterJ for 2indo!s allo! planners to
can create, sell, trac and chart optimum advertising media plans. The computeri#ed
media"selection model re'uires information about vehicle cost, ratings, ma&imum
number of insertions, and a budget constraint. A6plusJ finds optimum combinations of
media vehicles and media categories !ithin desired budgets. $t ma&imi#es effective
reach 1L and :L, GM>s, and average fre'uency and recommends media budgets for
desired communication goals. Hach media schedule may be posted to a calendar and
displayed directly in Telmar-s 7lo!%asterJ grapical flo!charting system. Kuic%i&J
allo!s comparison of alternative media plans. The planner can generate 0!hat"if1
scenarios by entering Meach and 7re'uency estimates already obtained through other
systems or media reps. The Kuic%i&J entry screen automatically updates the results
every time ne! information is entered.
An organi#ation must decide !hether to handle its advertising in"house or !hether to hire
an advertising agency. %ost ad agencies are organi#ed into four ma,or departments. The
creative department actually produces the ads. The staff consists of artists, copy!riters,
and graphic designers. The media planning department researches the various media
options and purchases the advertising media. %edia planners are comfortable !ith
manipulating numbers and !oring !ith computer"based media planning soft!are. The
research department studies audience needs and communicates this information to the
other departments. The business or account service department meets !ith clients and
understands their needs. Account e&ecutives act as the liaison bet!een the client and the
other departments !ithin the ad agency. $ntegrated mareting agencies have positioned
themselves as partners !ith clients in the development of all the organi#ation+s mareting
communications.
Though difficult and often e&pensive, measuring advertising effectiveness is essential for
advertisers to better understand ho! !ell their ads are performing and !hat changes need
to be made to improve performance. 9roadly speaing, promotion research consists of
media and message research. Media researc" measures audience composition and si#e
for media vehicles as a basis for determining ratings. Audience measurement services
include maga#ine )Simmons %aret Mesearch 9ureau and %ediamar Mesearch, $nc.*,
local radio )Arbitron*, national radio )MA6AM*, and television )4ielsen-s people meters
and SM$+s S%AMT method*. Message&based researc" evaluates the effectiveness of
promotion messages. The choice of techni'ue depends on the specific ob,ective an
advertising campaign is intended to accomplish. %ultiple measurement methods are
usually preferable to single techni'ues to assess advertising effectiveness.
Sales Promotion
Sales promotion is short"term incentives to encourage the purchase or sale of a product.
Targets of sales promotion include the trade )!holesalers and retailers*, consumers, and
an organi#ation+s o!n sales force. Trade promotion activities are designed to encourage
companies, sales forces or other members of distribution channels to sell products more
aggressively. Consumer"oriented sales promotions lie coupons, rebates, samples,
premiums, contests, s!eepstaes, and specialty advertising, offer an e&tra incentive to
mae immediate purchases.
Sales promotions help boost short"term sales. Consumers can be urged to mae stronger
and 'uicer responses. They are effective at inducing trial. Eo!ever, they may have
short"lived effects and may hurt a firm+s brand"building efforts in the long run if
consumers get used to buying a product on sale and become un!illing to pay regular
price for the product. Thus, successful sales promotions must promote customer
relationship building in the sense that they support the brand image of the product.
The pacage is the most important component of the product as a communications
device. $t reinforces associations established in advertising, breas through competitive
clutter at the point of purchase, and ,ustifies price and value to the consumer. >acage
cues include color, design, shape, brand name, physical materials, and product
information labeling.
>oint"of"purchase advertising displays and trade sho!s are sales promotions directed to
the trade marets. The point o purc"ase (P&.&P) is an ideal time to communicate !ith
consumers. Accordingly, anything that a consumer is e&posed to at the point of purchase
can perform an important communications function. A variety of >"/"> materials "" signs,
displays, and various in"store media "" are used to attract consumers- attention to
particular products and brands, provide information, affect perceptions, and ultimately
influence shopping behavior.
A significant trend in mareting communications has been to!ard greater use of sales
promotion in comparison !ith advertising. This shift is part of the movement from pull"
to push"oriented mareting, particularly in the case of consumer pacaged goods. >ush
implies a for!ard thrust of effort !hereby a manufacturer directs personal selling, trade
advertising and trade"oriented sales promotion to !holesalers and retailers. >ull suggests
a bac!ard tug from consumers to retailers as a result of advertising and sales"promotion
efforts directed at the consumer. Nnderlying factors of the shift to!ard sales promotion
include a balance"of"po!er transfer from manufacturers to retailers, increased brand
parity and gro!ing price sensitivity, reduced brand loyalty, splintering of the mass maret
and reduced media effectiveness, a gro!ing short"term orientation, and favorable
consumer responsiveness to sales promotions.
Public ,elations
>ublic relations )>M* entails a variety of functions and activities that are directed at
fostering harmonious interactions !ith an organi#ation-s publics )customers, employees,
stocholders, governments, and so forth*. $t is an efficient indirect promotional
alternative. $t improves companies- prestige and image !ith the public. >M uses a variety
of mareting communications such as media releases, ne!s conferences, and article
placements and story ideas in other media, to generate publicity for an organi#ation.
Publicit! involves ne!s stories about an organi#ation or its products. $t is similar to
advertising because it uses mass communication, but it is not paid for. 4e!s stories and
features reported in neutral media have a great deal of credibility. Thus, publicity has
greater credibility than advertising.
The ey to public relations is to have a story that is interesting enough to be told to
various publics using a variety of media. Activities used to manage public relations
include(
ne!s releases
speeches by e&ecutives and senior management
special events )formal press conferences and tours, grand openings*
!ritten and audiovisual materials aimed at their target maret
corporate identity materials )logos, stationery, brochures*
public service activities )charitable donations, sponsorships of events*
2eb sites
/irect Marketing
6irect mareting may tae the form of direct mail, telemareting, electronic mareting,
and online mareting. $t is immediate, customi#able to individual consumers or groups
of consumers, and interactive. 6irect email mareting includes unsolicited bul email
and opt"in direct email. Generally, direct mareting allo!s for easy measurement of
effectiveness. Successful direct mailing necessitates the availability of huge computer
databases containing data, such as names, email addresses, hobbies, geographic location
and birthdays. A database is data accessible by a computer. $t is an organi#ed collection
of data "" such as facts, figures and documents "" that have been stored for efficient
access. Nsers interact directly !ith the database to retrieve information. 6atabase
mareting is used to employ a firm+s database information to direct its mareting efforts
to!ards the best segment and potential customers. %assive amounts of data can be
manipulated allo!ing mareters to identify specific users of products, measure their
actual purchase behavior, and relate it to specific brand and product categories.
%areters use datamining )the e&traction of hidden predictive information from large
databases* to 0drill do!n1 into the data to any level of detail needed to identify common
characteristics of high"volume users. Then, clusters of consumers !ho share certain
characteristics such as income, education, and brand loyalty can be identified as targets
for mareting efforts. Advertising messages can be tailored to this target. 6irect mail is
the dominant direct"mareting advertising medium. $ts outstanding advantages are that
mareters can target messages to specific maret segments and determine success )or
failure* virtually immediately. 6irect mail also permits greater personali#ation than mass
media advertising and is not sub,ect to the clutter of competing ads such as those that
appear in other print and broadcast media. /n a cost"per"order basis, direct mail is often
less e&pensive and more efficient than alternative media.
Sponsors"ips
Sponsorships and cross promotions are t!o $%C strategies used to increase product
a!areness and build relationships. /rgani#ations use sponsorships to gain e&posure to the
event-s audience and the image associated !ith the event or activity. 2ith cross
promotions lie product tie"ins bet!een fast"food chains and movies, mareters ,ointly
promote products and share the promotional costs. Sponsors"ips involve investments in
events or causes in order to achieve various corporate ob,ectives. They represent a rapidly
gro!ing aspect of mareting communications.
-#ent marketing is a rapidly gro!ing facet of mareting communications. %areters
select events to sponsor based on the target audience. Hvent mareting is a form of brand
promotion that ties a brand to a meaningful athletic, entertainment, cultural, social, or
other type of high"interest public activity. Hvent mareting is gro!ing because it provides
companies !ith alternatives to the cluttered mass media, an ability to segment on a local
or regional basis, and opportunities for reaching narro! lifestyle groups !hose
consumption behavior can be tied to the local event.
,egulation o Promotional )cti#ities
The 7ederal Trade Commission )7TC* administers the 7ederal Trade Commission Act
and the Mobinson">atman Act. The 7TC Act prohibits unfair methods of competition,
including false, misleading, or deceptive advertising. Coopholes in the original act led to
passage of the 2heeler"Cea Amendment !hich strengthened the act by specifying an
unfair competitive act as one that in,ures the public, regardless of the effect the practice
may have on competitors. T!o sections of the Mobinson">atman Act relate to
promotional allo!ances. These state that a seller must offer promotional services and
facilities, or payments for them, on a proportionally e'ual basis to all competing
customers. The Canham Trademar Act specified that maing false claims about one+s
o!n products !as illegal. The Trademar Ca! Mevision Act broadened this regulation,
maing false comparisons to a competitor+s product illegal.
The 7ederal Communications commission licenses and regulates radio and television
stations. The 7ood and 6rug Administration )76A* is responsible for regulating the
labeling, pacaging, branding, ingredient listing, and advertising of pacaged food and
drug products. The N.S. >ostal Service regulates advertising done through the mail.
Also, legislation is found at the state and local level for intrastate commerce. >rivate
organi#ations, such as The 9etter 9usiness 9ureau, e&ert control over promotional
practices of business. %any trade associations have established code of ethics that
include promotional activity.
Image/ 0he -ome will be transformed into a state of the art concert venue and the whole site will
become a hub for entertainment. How will you promote this exciting new venue for 1ondon?
2opyright/ www.freeimages.co.u"
This resource is designed specifically for Nnit : of the Hde&cel 9THC 'ualification,
-Creative >roduct >romotion-.
/O " here is a real challenge to your business understanding and sillsP 6evelop a
promotional campaign for the %illennium 6ome.
Dou might thin that this !ill be an impossible challenge given the negative publicity
about the 6ome before, during and after the year long period that it !as open in 8@@@.
9ut changing the public perception and promoting the ne! 6ome is e&actly !hat mobile
phone firm /8 and the Anschut# Hntertainment Group )AHG* are planning to do. /8 and
AHG have ,oined forces to redevelop the 6ome into an entertainment and leisure centre,
!hich is due to open in April 8@@B. The centre !ill include a 8:,@@@ seater concert venue,
bars, clubs, restaurants, a smaller 8,@@@ seater music venue and a 1@ screen cinema
comple&. The venue is e&pected to host 1<@ concerts each year and /8 and AHG promise
it !ill be the best venue in Hurope.
Kuite a vision $-m sure you !ill agreeP Dour ,ob is to plan out the promotional campaign
that !ill reignite public interest and the public perception of the 6ome in preparation for
the opening in 8@@B.
The data and figures used in this resource are entirely fictional and are intended for
educational purposes only " they are not based on any data that /8 and AHG might
possess.
To launch a successful promotion campaign a number of stages !ill normally be
follo!ed through. 2e !ill briefly outline !hat each stage entails and then give you a
scenario on !hich to base your investigation and planning.
Image/ 0he message about the redevelopment of the 32 might not 4ust be about the venue itself
but might also involve a focus on the impact on the surrounding area ) the positive externalities.
2opyright/ 5eroen de 6oer
Your Task
Dou !ill !or as a team to prepare a promotional campaign for the opening of The /8
venue in April 8@@B. The campaign brief belo! gives you some bacground on !hich to
base your plans. The information in the brief is fictional but some of the data has been
based on maret statistics.
Campaign Brief
The %illennium 6ome !as constructed for the year 8@@@ celebrations. $t has had a
difficult history. The initial plans !ere to use the 6ome as a means of sparing
regeneration in a deprived area of south Condon and to put on an entertainment
e&travagan#a celebrating the ne! millennium. The cost of constructing the 6ome
escalated and there !ere a number of in,ections of cash that aroused the hostility of the
general public.
The 6ome !as predicted to host up to 18 million visitors but in the end only attracted =.<
million. The public perception of the 6ome is that it is a -!hite elephant- that cost the
ta&payer millions )QB<A million* and is still doing so !hilst plans for its redevelopment
!ere negotiated. The estimated cost per year since it closed its doors to the public in
maintenance and security has been Q:@ million.
Against this bacdrop AHG and /8 are taing on a pro,ect to continue the re"
development of the area and the site. /ne of the biggest problems is going to be changing
the public perception of the 6ome, hence the importance of renaming it The /8 and
getting this name firmly established in the public mind.
The plans for a concert venue come amidst a number of criticisms about the 'uality of
large music venues in the capital. Mecently Kueen played a concert at the 2embley Arena
and its lead guitarist, 9rian %ay, !as critical of the state of Condon-s concert venues.
/8 and AHG have the right credentials to mae this venture a success. /8 have
e&perience in mobile technologies as !ell as a database of 8; million customers in
Germany, $reland and the NO. $t has a !idely recognised brand name and is also
associated !ith other, similar high profile brands such as 9ig 9rother, the Hngland rugby
team and Arsenal 7ootball Club. $ts revenue in 8@@;"@< amounted to Q=.B billion.
AHG might be less !ell no!n as a brand but have e&tensive e&perience in entertainment
promotions. $t has been involved in promoting some of the most famous names in the
music business including Sir >aul %cCartney, N8, Hlton Rohn, The Hagles, Coldplay and
the Stereophonics and has also been involved in promoting the Grammy A!ards and the
Treasures of Tutanhamen e&hibition.
AHG have already pioneered many of its ideas through its head office of the Staples
centre in Cos Angeles. This is a state of the art venue, !hich stages around 8<@ concerts,
sporting events and conventions each year.
The campaign !ill see to promote a!areness of this ne! venue and !hat it can offer
consumers of entertainment. $t is seeing to achieve a target of 1<@ concerts in the first
year in the main arena !hich seats 8:,@@@ !ith a sales target of 9@S for each concert.
$n addition, there is an ob,ective of ensuring that ;<S of people in the 1; " :< age range
associate the brand /8 !ith the concert venue by the beginning of Ranuary 8@@B. The
budgeted revenues for the first year is Q=9 million )based on 1<@ concert events each
selling 8:,@@@ ticets at an average price of Q8@*. The total investment in the
development is Q8 billion and the promotion budget is being set at Q1<@ million.
The promotion campaign should begin in Ranuary 8@@= and run at intervals through 8@@=
in preparation for the first events, !hich are scheduled for April 8@@B. The year before
the opening is vital in ensuring that consumers become ac'uainted !ith this ne! venue
and !hat it offers.
1. Determine Your Budget
A common method of establishing your promotional budget is to estimate !hat your competitors spend and then match it. Dou do
this by monitoring their ads, promotions and special events they sponsor. 2hile this lacs precision, it provides a ballpar estimate.
/nce you gather data about your competitors- promotional budgets, don-t copy your rivals- spending habits or promotional mi&. Nse
your information as a guide.
A more e&act !ay to determine your budget is to assemble a !ish list of promotional methods you !ant to use to meet your
ob,ectives. $magine that money isn-t an issue. Then using actual rates for print and broadcast advertisements and estimated costs for
sales promotion and publicity, determine each activity-s dollar cost. Then scale the list do!n until you have a reasonable budget.
Television and national print advertising may prove too e&pensive or inappropriate at this time. $n any case, consider testing a range
of techni'ues rather than investing your promotional dollars in one area. 2hyI 9ecause promotion re'uires e&perimentation. $t
may tae several months and do#ens of tests to uncover the most effective mi& for your company. H&pect to reevaluate your budget
and mae ad,ustments as you go along.
Hstablishing an effective promotional mi& cannot occur if you allocate resources sporadically. 7or your mareting message to
produce results, promotional activities must occur on a regular basis. Consumers rarely tae immediate action and may benefit
from repeated e&posure to your message before they buy.
2. Determine Your Promotional Mix
4o! that you have completed all of the preceding steps, it-s time to formulate your actual promotional mi&. The most common
method for actually putting your mi& on paper is to e&press it as a percentage of your overall promotional budget.
-xample 0: /ur upscale ,e!eler-s promotional mi& based on a budget of ?<,@@@ might loo something lie this(
#.7 -irect 8ail/ -irect)8ail 2ampaign 92#..
!.7 (dvertising/ :rint (ds in 1ocal 1ifestyle 8aga;ine 92...
1.7 %ales :romo/ 2oupon In -irect)8ail 1etter <or <ree (ppraisal 9#..
-xample 1: The promotional mi& of the maer of a candy bar that fights tooth decay !ith the same budget might loo something
lie this(
2#7 :ublic =elations/ :ress =eleases 912#.
2#7 (dvertising/ :rint (ds in 1ocal >ewspapers and -ental 912#.
:ublications
#.7 %ales :romotion/ :roduct %amples 2oupons 2ontest 92#..
Al!ays integrate and coordinate the various tools you use. 7or e&ample, sales promotion can be integrated !ith advertising by
announcing a contest in a print advertisement. >ublic relations efforts should try to produce results at the same time advertisements
are scheduled to appear. 6irect"mail letters should be sent the same !ee a ne! sales promotion begins.
-xercise: /eine !our mix
7ormulate a specific breado!n of your promotional mi&.
1. 8y time frame for testing a promotional campaign/ ???????.
2. 8y promotional budget/ 9????????.
3. 8y promotional mix/ @use format of above examplesA
3. Measure the Results of the implemented program and Adjust as needed
$ncreased sales !ill be the yardstic you use to measure each promotional vehicle you employ. Advertising is often the hardest to
measure. H&ceptions( Allo! print readers to clip a coupon or send in an order form, or invite radio or T3 audiences to call an A@@
toll"free number.
Dou !ill need to evaluate and change your promotional mi& not only to correct ineffective promotional vehicles but also to ad,ust
for gro!th.
After one year on the maret, our candy"bar maer !ill need to re"evaluate the mi&(
0otal 6udget 91....
$.7 (dvertising/ :rint (ds in >ational 2onsumer and -ental
:ublications
9$...
!.7 %ales :romotion/ :roduct %amples 2oupons :oint)of):urchase
-isplays
Note: Public relations is now gone from the mix because the
novelty of the product has worn off, and the product is no longer
newsworthy. Advertising represents a higher percentage as this
company moves to increase its national exposure. This particular
company has found that advertising to dentists is important
because they recommend it to their patients and that sales
promotions have yielded effective results.
9!...
Sample Promotional Mix
Compan! :ampered :ets :et %itting %ervice Bmployees go into
peopleCs homes to feed pets ta"e them for wal"s change
litter boxes
Target
Market!
:eople who wor" long hours and donCt have enough time
to ta"e care of their pets
:eople who are going on vacation and donCt want to put
their pets in a "ennel and donCt have anyone who could
stay at their house
Blderly people who are unable to care for their pets but
want to "eep them
Communication
"#jecti$es!
We need to/
introduce our service to the public
create awareness of our service
get people to use our service not our competitorCs
get veterinarians to recommend our service
have at least one veterinarian agree to treat our clientsC
pets on an emergency basis a feature that competitors
donCt offer
Design Message
Content! If you care about your petCs welfare when you arenCt
home then you will use our servicesDItCs so convenient
and reasonably priced that you canCt afford not to use our
services
%ormat! <liers brochure ads in local newspapers and Eellow :ages
Promotional
Methods!
Ad$ertising
Eellow :ages local newspapers
Sales Promotions
2oupons that can be punched out 1 punch per day after
2. punches get one day free or at discounted rate
Pu#lic Relations
>ot applicable at this time. (s business grows we plan to
offer to contribute part of customersC payments to an
animal shelter.
Direct Marketing
<liers in mailboxes throughout local neighborhoods to
veterinarians apartment complexes where elderly live to
pet shops. (s business grows we will send a newsletter to
customers.
Personal Selling
0o veterinarians pet shop owners travel agents
apartmentDcondominium management to refer people to
our services. 0his only reFuires existing personnel time no
added budget cost incurred here.
Budget! <ive hundred brochures for display in pet shops and
veterinarian offices will cost 91#.. (s business grows we
will expand to two)color pieces. <liers can also be created
inexpensively. 0wo hundred fliers will cost 92. to copy on
colored paper 'distribute in spring and summer*. Eellow
:ages ad will be limited to an informational in)column
listing 1 inch for 93.. for the year in the local boo". 0his
boo" is sufficient. %mall ads in the local newspaper will
cost 93.. for two placements. =olodex cards will cost 91$.
for #... <ive hundred punch)out cards will cost 92&.
Total promotional #udget! &'((
Promotional
Mix!
(dvertising $17 9#,$
%ales :romotions 37 92,
:ublic =elations .7 9.
-irect 8ar"eting 3$7 93#2
:ersonal %elling .7 9.
Measuring Results
ItCs now one year later and :ampered :ets is evaluating its promotional mix/
Communication "#jecti$es!
We successfully introduced our service to the target mar"ets and have a
steady base of customers. We have the support of several veterinarians and
were able to form an emergency services agreement with two in the area.
0his year we will expand into certain areas of the neighboring county while
enlarging the current customer base.
Promotions Channels!
Ad$ertising!
Yello) Pages! =esponse is slow but steady. We will renew as is '93#.*.
*ocal ne)spapers! %teady advertising will be put on hold as word)of)mouth
referrals are fairly strong. We will place two small ads before the summer and
2hristmas holiday seasons '9!2#*.
Sales promotions!
Punch+out cards! 0hese have proven a success. 0his year we will add a
special discount coupon to attract new customers and to than" customers for
their referrals 'one free day for every five referrals who become customers*
to replace last yearCs 21st day free program. '9##*
Pu#lic relations!
When a pet we cared for died a small donation was sent to the local branch
of the (%:2(. 0he owners were touched and sent a than")you note. 0hey also
told their friends which resulted in more referrals. We will continue to do this
and also send cards when clientCs pets have surgery. -uring the holidays
food and supplies were donated to the (%:2( and our picture was in the
newspaper which generated more referrals for the holiday season '91..*.
Direct marketing!
0he fliers were successful so we will continue to use them and increase the
number of mailings from two to four. 0he =olodex cards and letters were
successfulG but because we ordered such a large Fuantity last year we donCt
need to order more. We also have brochures left from last year so we donCt
need more. I plan to launch a newsletter on our Web site in six months
'91+.*.
Personal selling!
Total Budget! &,-,,.
/e) Promotional Mix!
This Year *ast Year
(dvertising &.7 $17
%ales :romotions #7 37
:ublic =elations ,7 .7
-irect 8ar"eting 1$7 3$7
:ersonal %elling .7 .7
C2-C34IST TtopU
Eave you(
VVV $dentified your target maretI
VVV 6etermined your communication ob,ectivesI
VVV 6efined your communication ob,ectives based on your product or serviceI
VVV Applied your ob,ectives to your product or serviceI
VVV 6esigned your messageI
VVV Nsed the most clear, compelling contentI
VVV Chosen an appropriate format to convey your messageI
VVV Selected the proper promotional methods to communicate your messageI
VVV Hstablished a budgetI
VVV 7ormulated your actual promotional mi&I
VVV Hvaluated each promotional vehicle that you have employedI
VVV %easured your results and ad,usted as neededI
,-S.5,C-S TtopU
6ooks
The Internet Marketing lan! The "omplete #uide to Instant $eb resence, 8nd ed. by Oim %. 9ayne. )2iley, 8@@@*.
Do-It-%ourself Advertising and romotion! &o' to roduce #reat Ads( )rochures( "atalogs( Direct Mail( $eb *ites and More,
:rd edition, by 7red H. Eahn and Oenneth G. %angun. )2iley, 8@@:*. FAnd moreF includes trade sho!s and telemareting.
)usiness to )usiness Direct Marketing! roven Direct Response Methods to #enerate More +eads and *ales, 8nd ed. by
Mobert 2. 9ly. )4TC 9usiness, 199A*.
Marketing Management! The Millennium Edition by >hilip Ootler. )>rentice Eall, 1999*.
The ,, Immutable +a's of Internet )randing by Al Mies and Caura Mies. )Earper9usiness, 8@@@*.
,-, $ays to romote %our $eb *ite! .illed 'ith roven Internet Marketing Tips( Tools( Techni/ues( and Resources to Increase
%our $eb *ite Traffic, 8nd ed. by Susan S!eeney. )%a&imum >ress, 8@@@*.
Internet Sites
2ilson $nternet 2eb %areting G H"Commerce
Topica
2eb 6igest for %areters
)ssociations
The 6irect %areting Association
$nternational Association of 9usiness Communicators
The >ublic Melations Society of America
Publications
Target Marketing
Communications, or >romotions %i&.
The Marketing Communications Mix is the specific mi& of ad#ertising,
personal selling, sales promotion, public relations, and direct
marketing a company uses to pursue its advertising and mareting
ob,ectives.
De%initions"
Ad*ertising " Any paid form of nonpersonal presentation and promotion
of ideas, goods, or services by an identified sponsor.
Personal selling " >ersonal presentation by the firm+s sales force for the
purpose of maing sales and building customer relationships.
,ales romotion " Short"term incentives to encourage the purchase or
sale of a product or service.
Publi$ relations " 9uilding good relationships !ith the company+s
various publics by obtaining favorable publicity, building up a good
Fcorporate imageF, and handling or heading off unfavorable rumors,
stories, and events.
Dire$t mar)eting " 6irect communications !ith carefully targeted
individual consumers to obtain an immediate response and cultivate
lasting customer relationships.
,etting the Promotion Mix
2hen deciding ho! to properly utili#e the mareting communications mi& to
meet your mareting ob,ectives, it is important to consider the relative strengths
and !eanesses of each component of the mi&. 7urther, you must al!ays define
your total budget first )generally defined in the %areting andWor 9usiness >lan*
and then decide upon the best !ay to leverage the different elements of the mi& to
ma&imi#e the return on your investment. Dou !ill balance the various parts of the
mi& to not only create an integrated approach to your mareting communications
but you must also devote enough resources for each component to be successful.
Eere are some things to eep in mind(
Meaches large, geographically dispersed audiences, often !ith high
fre'uency5 Co! cost per e&posure, though overall costs are high5
Consumers perceive advertised goods as more legitimate5
6ramati#es companyWbrand5 9uilds brand image5 may stimulate
short"term sales5 $mpersonal, one"!ay communication5 H&pensive
%ost effective tool for building buyers+ preferences, convictions,
and actions5 >ersonal interaction allo!s for feedbac and
ad,ustments5 Melationship"oriented5 9uyers are more attentive5
Sales force represents a long"term commitment5 %ost e&pensive of
the promotional tools
%ay be targeted at the trade or ultimate consumer5 %aes use of a
variety of formats( premiums, coupons, contests, etc.5 Attracts
attention, offers strong purchase incentives, dramati#es offers,
boosts sagging sales5 Stimulates 'uic response5 Short"lived5 4ot
effective at building long"term brand preferences
Eighly credible5 3ery believable5 %any forms( ne!s stories, ne!s
features, events and sponsorships, etc.5 Meaches many prospects
missed via other forms of promotion5 6ramati#es company or
product5 /ften the most under used element in the promotional
mi&5 Relatively ine&pensive )certainly not -free- as many people
thin""there are costs involved*
%any forms( Telephone mareting, direct mail, online mareting,
etc.5 7our distinctive characteristics( $onpublic7 Immediate7
Customi8ed7 Interacti#e5 2ell"suited to highly"targeted mareting
efforts
2hen deciding upon your uni'ue mareting communications mi&, you should
also consider the Product 4ie C!cle. Eere are some general guideline as to ho!
and !hen to emphasi#e different parts of the mi& according to the stages of a
typical product life cycle(
Mar)eting mix
%rom 0ikipedia- the free encclopedia1
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The marketing mix approach to mareting is a model of crafting and implementing
mareting strategies. $t stresses the Fmi&ingF or blending of various factors in such a !ay
that both organi#ational and consumer )target marets* ob,ectives are attained. The model
!as developed by 4eil 9orden )9orden, 4. 19=;* !ho first started using the phrase in
19;9. 9orden claims the phrase came to him !hile reading Rames Culliton-s description
of the activities of a business e&ecutive(
)An e&ecutive is* Fa mi&er of ingredients, !ho sometimes follo!s a recipe as he
goes along, sometimes adapts a recipe to the ingredients immediately available,
and sometimes e&periments !ith or invents ingredients no one else has tried.F
)Culliton, R. 19;A*
2hen blending the mi& elements, mareter)s* must consider their target maret. They
must understand the !ants and needs )see %aslo!*of the maret )customer* then use
these mi& elements in constructing )formulating*an appropriate mareting strategies and
plans that !ill satisfy these !ants. The mi& must also meet or e&ceed the ob,ectives of the
organi#ation. As 9orden put it,F2hen building a mareting program to fit the needs of his
firm, the mareting manager has to !eigh the behavioral forces and then ,uggle
mareting elements in his mi& !ith a een eye on the resources !ith !hich he has to
!or.F )9orden, 4. 19=; pg :=<*. A separate mareting mi& is usually crafted for each
product offering or for each maret segment, depending on the organi#ational structure of
the firm. 9orden goes on to suggest a procedure for developing a mareting mi&. Ee
claims that you need t!o sets of information5 a list of important elements that go into the
mi&, and a list of forces that influence these decision variables.
The most common variables used in constructing a mareting mi& are price, promotion,
product and distribution )also called placement*. 7irst suggested by Rerome %cCarthy
)%cCarthy, R. 19=@*, they are sometimes referred to as the our P9s. %cCarthy said that
mareters have essentially these four variables to use !hen crafting a mareting strategy
and !riting a mareting plan. $n the long term, all four of the mi& variables can be
changed, but in the short term it is difficult to modify the product or the distribution
channel. Therefore in the short term, mareters are limited to !oring !ith only half their
tool it. This limitation underscores the importance of long term strategic planning.
%cCarthy-s four >-s loo at mareting from the perspective of the mareter. $t describes
!hat variables mareters have to !or !ith, and hence is sometimes referred to as a
mareting management perspective. Mobert Cauterborn )Cauterborn, M. 199@* claims that
each of these variables should also be seen from a consumer-s perspective. This
transformation is accomplished by converting >roduct into Fcustomer solutionF, >rice
into Fcost to the customerF, >lace into FconvenienceF, and >romotion into
FcommunicationF. Ee calls these the our C9s.
Shortly after %cCarthy developed the four >-s, 9orden devised a model !ith t!elve
decision variables. They !ere product planning, pricing, branding, channels of
distribution, personal selling, advertising, promotions, pacaging, display, servicing,
physical handling, and fact finding )9orden, 4. 19=; pg :=:*.
Another set of mareting mi& variables !ere developed by Albert 7rey. Ee )7rey, A.
19=1* classified the mareting variables into t!o categories( the offering, and process
variables. The FofferingF consists of the product, service, pacaging, brand, and price.
The FprocessF or FmethodF variables included advertising, promotion, sales promotion,
personal selling, publicity, distribution channels, mareting research, strategy formation,
and ne! product development.
%ore recently, 9ernard 9ooms and %ary 9itner built a model consisting of se#en P9s
)9ooms, 9. and 9itner, %. 19A1*. $n addition to product, price, promotion, and place,
they included participants, physical evidence, and process. F>articipantF !as added, to
recogni#e the importance of the human element in all aspects of mareting. They added
FprocessF to reflect the fact that services, unlie physical products, are e&perienced as a
process at the time that they are purchased. F>hysical evidenceF or Fperipheral cluesF
reflects the physical surroundings associated !ith a service encounter or retail location.
/ther mareting theorists include FpartnersF as a mi& variable because of the gro!ing
importance of collaborative channel relationships.
The mareting mi& model is often e&panded to include sub"mi&es. 7or e&ample, the
promotion variable can be further decomposed into a promotional mi& consisting of
advertising, sales promotion, personal selling, publicity, direct mareting, undercover
mareting, viral mareting, and e"mareting. 2ithin the promotional mi&, advertising can
be further broen do!n into an Fadvertising media mi&F that specifies ho! much
emphasis is placed on television ads, radio ads, ne!spaper ads, internet ads, maga#ine
ads, etc.
Mix coherency refers to ho! !ell the components of the mi& blend together. A strategy of
selling e&pensive lu&ury products in discount stores has poor coherency bet!een
distribution and product offering.
Mix dynamics refers to ho! the mi& must be adapted to a changing business environment,
to changes in the organi#ation-s resources, and to changes in the product life cycle.
TeditU
TeditU
References
9orden, 4. )19=;* FThe concept of the mareting mi&F 0ournal of Advertising
Research, vol ;, Rune, 19=;, pp 8"B. " The same article can also be found in(
Sch!art#, G. )ed*, *cience in Marketing, Rohn 2iley, 4e! Dor, 19=<, pp :A="
:9B " and also in( Hnis, 9. and Co&, O. )1991* Marketing "lassics( A selection of
influential articles, Allyn and 9ro!n, 9oston, 1991, pp :=1":=9.
9itner, R. and 9ooms, 9. )19A1* Marketing strategies and organi1ational
structures for service firms, in 6onnelly, R. and George, 2. Marketing of services,
American %areting Association, Chicago, 19A1.
Culliton, R. )19;A* The management of marketing costs, Graduate School of
9usiness Administration, Mesearch 6ivision, Earvard Nniversity, 9oston, 19;A.
6oyle, >. )8@@@* 2alue based marketing, 2iley, Chichester, 8@@@.
7rey, A. )19=1* Advertising, :rd ed., Monald >ress, 4e! Dor, 19=1.
Eammer, %. and Champy, R. )199:* Reengineering the "orporation! A Manifesto
for )usiness Revolution, Earper 9usiness 9oos, 4e! Dor, 199:, $S94
@@===8118B
Cauterborn, M )199@* F4e! %areting Citany( ;>-s >asse5 C !ords tae overF,
Advertising Age, /ctober 1, 199@, pg 8=.
%cCarthy, R. )19=@ 1st ed.*, )asic Marketing! A managerial approach, 1:th ed.,
$r!in, Eome!ood $l, 8@@1.
Strategy, competitive advantage and the promotional mi&
The mareting mi&
The combination of factors that influence a customer-s decision to buy a product is no!n as the mareting mi& or
;>s(
Price
2hat does the product costI 2hat are the terms of paymentI $s credit offeredI
Product
2hat benefit does the product provideI 2hat particular features and specifications does it haveI Eo! does it
compare to competitors- productsI
Promotion
The !ay in !hich a company communicates about its products e.g. through advertising, sales promotion or public
relations.
Place
The !ay that o!nership of a product passes from the manufacturer to the consumer )distribution*.
Above and belo! the line promotion
>romotional techni'ues aim to communicate !ith the customer. They include above the line and belo! the line
techni'ues. Above the line promotion involves spending on mainstream advertising such as television, radio and
cinemas. The total amount of spending on above the line advertising in the NO in 8@@8 !as nearly Q11 billion5
television and press advertising accounted for nearly B@S of this. >olestar must eep a!are of the trends !ithin
above the line promotion because some of its clients " such as the maga#ine and supplement publishers " rely on
press advertising revenue for their income. $f, for e&ample, maga#ine advertising proves more effective for every
pound spent, then advertisers !ill demand more pages, thus increasing >olestar-s order value. This is another
reason !hy it is important for >olestar to be innovative so that it can help its customers provide their clients !ith a
more effective means of promotion.
The >olestar Group is also involved in belo! the line promotion. These promotional methods do not involve
mainstream advertising )i.e. are not above the lineP*. This includes(
direct mail
sales promotion
catalogues.
The >olestar Group-s services help its customers improve their mareting mi& by enabling them to promote more
effectively. >olestar recognises that its customers and advertisers have limited mareting budgets and so every
pound counts. Eelping its customers to increase the effectiveness of their spending increases the appeal of >olestar
service. >olestar can help its different customers to add value in the follo!ing !ays(
a* %aga#ine publishers
The publishers of maga#ines are naturally eager to mae their publications stand out especially !hen there are lots
of competitors on the shelves. As customers bro!se in the shop >olestar can help its clients- products attract their
attention by printing unusual covers such as barn door covers.
%aga#ines also raise revenue through their advertising and >olestar can help here by maing these advertisements
more effective. $f advertisers get a better response rate they !ill be !illing to pay more to advertise in a particular
maga#ine. H&amples of >olestar-s creativity include the introduction of >ost"itI notes inside a maga#ine !ith
messages attached about particular goods or services. These have proved highly effective at dra!ing people-s
attention to advertising increasing the response rate from 1S to :S. This is a huge increase in absolute terms
given the large number of maga#ines that are actually published.
b* 6irect mail
>olestar helps its customers increase their direct mail response rate by enabling them to use a personalised
approach !ith their target maret. The brochure, card or letter can be personally addressed. This can encourage
recipients to read the information that has been sent. /nce again such fle&ibility re'uires specialised e'uipment
and sills. >olestar helps companies to reduce !asted mail by assisting its clients to clean up their data lists thus
avoiding unnecessary duplications. This one stop shop approach helps direct mailing companies save money
because they can avoid sending the same thing t!ice to a household unintentionally and improve their success rate
by getting more people to read !hatever has been sent rather than ,ust destroying it.
c* Catalogues
/ne of the most important aspects of catalogues is the !ay in !hich the products are displayed. Good photographs
and accurate reproduction )e.g. matching colours correctly* can mae a ma,or difference to the rate of orders and
level of returns. >olestar-s specialist sills and technology help ensure this happens.
d* >ublishing solutions soft!are
Another of >olestar-s strengths is its ability to use client-s databases as part of the printing process, e.g. the
company !ors !ith Tesco to send out information to its 1@ million Clubcard holders. $t organises the mailing to
these loyalty card holders four times a year and using the information from Tesco, it provides information on the
points earned and includes personalised vouchers and coupons.
The success to !hich >olestar adds value can be measured in terms of its impact on its customers- sales, revenue
and brand a!areness relative to the additional costs involved
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