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Marketing communication plays an important role in a company's overall marketing program. Marketing communication can be defined as the process of systematic and scientific way of disseminating the relevant marketing information by a company to its target market and other publics by using a mix of media. A company through its marketing communication tries to persuade its target market to purchase its products and services vis-a-vis its competitors. Since marketing communication aims at influencing the consumer behaviour in favour of the company's offerings, this is persuasive in nature. Various persuasive marketing communication tools are more commonly called 'Promotion' and constitute one of the four Ps of the marketing mix which was popularized by Jerome McCarthy in 1964. Thus marketing communication refers to the various promotion tools used by marketers to exchange persuasive messages and information to its target market and other public.
The following are the major functions of effective marketing communication.
1. Providing Information and Persuasion: Marketing is required to identify consumer wants and then satisfy these 'wants with the right kind of products at the right place and at the right price. The purpose of marketing communication is to convey to customers the relevant and pertinent information about the features of the product and persuade how it will satisfy consumer needs and wants. For instance, if a company which is in the marketing of air conditioners is planning to offer off-season discount, it is essential to communicate to potential customers about the extent of discount, period during which discount is available, names of the stores where it is available, etc. If all such information is not communicated to potential customers, then providing the discount will not be beneficial to either the consumer or to the company. Marketing communication, therefore, is an essential part of the marketing program of
2. Providing Information About a New Brand or Brand Extension: Marketing communication is essential when firms introduce a new brand or extensions of existing brands. A brand extension is an adaptation of an existing brand to a new product area. For example, the Lux shampoo is a brand extension of the Lux soap. When new brands or extensions are brought to market, the marketing communication process is largely responsible for attracting attention to the new market offering. This is often accomplished by sales promotion, advertising, and point-of-purchase displays. These marketing communication tools provide the relevant marketing information about the new products and brand extensions' features, quality and availability to the
3. Building and Maintaining Brand Loyalty Among Consumers: Loyalty to a brand is one of the most important assets a firm can have. Brand loyalty occurs when a consumer repeatedly purchases the same brand to the exclusion of the competitors' brands. While the product itself is the most important influence on building and maintaining brand loyalty, marketing communication plays a key role in the process as well. Advertising reminds consumers of the values-tangible and intangible-of the brand. Promotion often provides an extra incentive to consumers to remain brand loyal. When a company creates and maintains positive associations with the brand in the minds of the consumers, the company has developed brand loyalty. Consider a customer who regularly buys CloseUp toothpaste or Lux Soap. Do marketers of CloseUp toothpaste or Lux soap advertise to appeal to such customers? The answer is yes, because even the most loyal customers must be reminded that a product has served them well over the years and about the features that make the product attractive. This is more so in an environment where competitors consistently attempt to attract the customers of competing brands with their own informative and persuasive messages. Thus, in addition to informing and persuading, another important purpose of communication is building brand loyalty by reminding the customers. This is why even the manufacturers of well established brands like Colgate, Lux, Surf, Nescafe, Lifebuoy, Pepsi, Coca Cola etc., advertise quite extensively to sustain customers' preferences and loyalty for these brands.
One can take a broad or a narrow view of the tools in the marketing communication. Marketers use an array of tools for the purpose of communicating and promoting their products and services. For example, at home we are exposed to various advertisements while reading a newspaper, watching a TV program, listening to radio or even examining the water, electricity or telephone bills. On our way to the office or home similar communications are present on bus panels, roadside hoardings, neon signs, posters and banners, etc. And, while at a retail shop these take the shape of traffic builders, product displays, etc., all sharing information relating to a specific product of a company.
Historically, companies first made a separate function out of personal selling, followed by advertising, sales promotion, public relations and publicity, and finally with direct marketing. These major tools of promotion mix are defined and described briefly in the following.
1. Advertising: It is defined as any paid form of non-personal communication through mass media about a product, a service or an idea by an identified sponsor. Advertising can be used to build up a long term image of a brand (Colgate advertising) or trigger quick sales (a departmental store's advertisement for sale). Advertising can reach geographically dispersed buyers efficiently. Certain forms of advertising (TV advertising) typically require a large budget, whereas other forms (newspaper advertising) can be done on a small budget. The media used could include magazines, newspapers, radio, television, billboards (hoardings), direct mail, etc. Sponsors may be non-profit organization (colleges, universities, and institutes), companies or individuals. Advertising has four distinctive characteristics. These are:
Public Presentation-unlike personal selling it is a highly public mode of communication. Its public nature confers a kind of legitimacy to the product. Because many persons receive the same message, buyers know that their motives for purchasing the product will be publicly understood.
Pervasiveness-advertising is a pervasive way of communicating the marketing messages. It permits the seller to repeat a message many times. It also allows the buyer to receive and compare messages of other competitors.
Amplified Expressiveness-it provides opportunities for dramatizing the company and its brands through the artful use of print, sound, and colour. Over dramatization sometimes dilutes or distracts from the message.
Impersonality-advertising despite being public, pervasive, and expressive in nature can not be as compelling as personal selling and sales promotion. The audience does not feel obligated to pay attention or respond. Advertising is only able to carry on a monologue and not a dialogue with the audience.
2. Sales Promotion: It is defined as a variety of short term incentives to encourage trial or purchase of a product or service. Although sales promotion tools-coupons, contests, premiums, and the like-are highly diverse, they offer three distinctive benefits to the consumers. These are:
Communication-attracts consumer attention and provides information that may lead the consumer to buy the product.
incentive-incorporates some concessions or inducement that gives value to the consumer. Communication
invitation-includes a distinct invitation to engage in the transaction now.
Iiterally sales promotion was used as an adhoc collection of sales tools to stimulate short term demand. Now companies are using this promotion tool very often and its , budget has increased over a period of time. Sales promotion plays a vital role in the introduction and in the maturity stage of a product life cycle. The effects of sales promotion are often more immediate and measurable than those of advertising. The purpose of sales promotion many times is to supplement the advertising and personal selling effort carried by the company.
3. Public Relations and Publicity:
It is defined as a variety of programs designed to promote or protect a company's image or its individual products. The appeal of public relations and publicity is based on three distinctive qualities:
High Credibility-news stories and features seems to most readers, to be authentic and credible than advertisements.
Ability to catch buyers off guard-publicity can reach to many potential buyers who otherwise avoid salespersons and advertisements. This is because the message is packaged in a way that gets to the buyers as news rather than sales directed communication.
Dramatization-like advertising, publicity has the potential of dramatizing a company or product.
Public relation and publicity is similar to advertising except that it involves an unpaid and unsigned message, even though it may use the same mass media as advertising. Publicity can either be positive (favorable) or negative (unfavorable) because the message is in the hands of media and not controlled by the company. Marketers spend a lot of time and effort in getting news items and articles placed in newspapers and broadcasts so that a favorable image of the company is created.
4. Personal Selling: In other words personal selling is a personto-person process by which the seller learns about the prospective buyer's wants and seeks to satisfy them by making a sale. Personal selling has three distinctive qualities which make it different from other promotion tools. These are:
Personal Confrontation-it involves an alive, immediate and interactive relationship between two or more persons. Each party is able to observe at close hand the characteristics and needs of other party and can make immediate adjustments. Each party has the potential to help or hurt the other party by his/ her interest or lack of interest.
Cultivation-it permits all kinds of relationships to spring up, ranging from a matter-of-fact selling relationship to a deep personal friendship. Salesmanship is an art and one should use this art to win the customers.
Response-in contrast with the advertising, personal selling makes the prospective buyer feel more under obligation to listen to the sales presentation of the salesperson as he is using up the salesperson's time. The response here is instantaneous.
According to Wheeler, "Advertising is any form of paid non-personal presentation of ideas, goods or services for the purpose of inducting people to buy."
Advertising plays a vital role in the present day world of cut throat competition. It is important not only for the company but also for the customers and the society as a whole. Importance of Advertising to Customers
• Enhances awareness of products available in the market
• Helps people find the best products
• Enables customers compare products
• Assists customer in gauging quality of products
• It is informative Importance of Advertising to Advertisers
• Helps in increasing sales
• Lets the marketer know of competitor's products and strategies
• Helps launch new products
• Enhances customer loyalty
• Helps in maintaining steady demand
• Creates image, reputation and goodwill for the company
• Quickens turnover and reduces inventory
• Essential to survive in a competitive word
• Reduces per unit costs by enhancing sales and production
• Advertising, in general, helps educating people.
• Leads to a large-scale production and thus creates employment
• Improves standard of living of people
• Deals with certain social issues like smoking, child labor etc.
• Helps reduce the cost of newspaper considerably
Advertising provides information about the product offering to the prospective consumers. Advertising acts as guide to prospective buyers as it provides information about the existence, use, functions and attributes of the product which helps the consumer in making an informed choice regarding the purchase decision.
People buy products to satisfy some need. Among the competing products, those products will be preferred which give them better value for their money as compared to competitors products. In this case not only the cost aspect is considered by the prospective buyer but all aspects and characteristics of the product are kept in mind by consumer before he makes a choice. Advertising play an important role in differentiating the product and in enhancing its perceived value in the mind of consumer.
One of the major role that advertising plays is that of creating and enhancing the demand of the product that is being advertised. It is through advertising that the public is made aware of the specific benefit a particular product with a view to increase its primary demand and consumption.
Companies differentiate their product offerings through various means including product features, quality, labeling and packaging: There is always a need to create products that are different vis-a-vis rival brands.
It is the advertisements which largely make up for the cost of any media. We get to see television or listen to the radio at practically no cost, courtesy the advertisements. The payments made to the media by advertisers cover a substantial portion of the cost of that particular media, be it electronic or print and therefore we get the programs on television as well as on radio either free or at very nominal cost. The price of a newspaper would have been much more had the advertiser not paid money for advertising.
Advertising boosts economic activity and in turn creates jobs. A large number of people are employed in advertising agencies as well as in the production of advertisements. There is a proliferation of media houses in recent times given the spurt in advertising. Overall, advertising attempts to raise the aggregate demand for the products and thus production and manufacturing get a boost, in turn creating more jobs Advertising helps in developing new and innovative products thus providing an opportunity for the employment of creative people.
While advertising may be extremely important for the marketer as well as for other stakeholders it has its own limitations and is criticized for the following reasons:
• Product proliferation
• Inefficient manufacturers stay in business
• Increased propensity to consume
• Social and ethical issues
• Effect on children
• Excessive repetition
An advertising objective or goal is the specific communication task that advertising needs to accomplish with a specific audience in a specified period of time. The advertising objectives follow decisions on target market, brand positioning, and the marketing program. Depending on the aim of the advertisement, it may be
• Informative Advertising
• Persuasive Advertising
• Reminder Advertising
• Reinforcement Advertising Information advertising: Creates brand awareness, disseminates information about new products and new features of existing products.
Persuasive advertising: Creates liking, preference and conviction about a product or service.
Reminder advertising: Stimulates repeat purchase of products and services.
Reinforcement advertising: Convinces buyers that they made the right choice.
The DAGMAR (Defining Advertising Goals for Measured Advertising Results) was propounded by Russell H. Colley. This model suggests that advertising has to perform a specific task among a well defined audience within a specified time period. The DAGMAR model thus focused on the measurement of objectives thereby encouraging marketers to set specific and operational objectives. The DAGMAR model was instrumental in specifying what constituted of good objectives which are stated below:
The advertising objective should be a precise statement of what appeal or message the advertiser wants to communicate to the target audience.
The DAGMAR model was based on the premise that the advertiser would define the target audience well in advance.
The advertising objective would categorically state where the target audience stood and where the advertising campaign intends them to take with respect to awareness, knowledge, attitudes and image of the product offering being advertised.
An objective is meaningless if it is not time bound. The DAGMAR approach warrants the specification of the time period during which the objective has to be accomplished.
Goals should be penned down and should be communicated to all concerned in black and white. Verbally communicated goals increase the chances of ambiguity and misunderstandings.
Advertising Budget is the amount of money that a company intends to spend to achieve its advertising objectives. It also involves the distribution of specific amounts of the total advertising budget to various media, creative approaches and to the production costs involved in preparing the advertising messages. Although advertising is treated as a current expense, much of it is,an investment in building brand equity. There are various factors that have a bearing on the advertising budget:
• Frequency of the advertisement
Frequency of advertisement refers to the number of times the advertisement will be aired on television or the number of times it will be printed in a newspaper or magazine. There is a direct positive correlation between the frequency and the advertising budget. More frequency warrants a higher advertising budget and vice-versa.
• Competition and Clutter
If there is intense competition in the product category in which the company operates in, a higher advertising budget will have to be kept aside. Chances are that in an industry with intense competition, alt manufacturers would be advertising with a higher frequency, thus creating a clutter. To rise above the clutter and make oneself heard, the marketer will have to advertise heavily and will have to set aside a higher budget.
• Market Share of the Product
If the objective of the marketer is to capture a large chunk of the market share, the advertiser will, in addition to having a good quality product, have to repeatedly bombard the target customers with catchy advertisements. This will be possible only if the advertisement budget is high.
• Product Life Cycle Stage
The product life cycle stage is key factor in determining the advertising budget. A product may be in the introduction, growth, maturity or decline stage. If the product is in the introduction stage, then the company has to keep the budget high to make inroads in the market. With passage of time, the product enters the growth and maturity stage and the role of advertising goes down and the role of sales promotion and personal selling increases.
Methods of Setting Advertising Budget
After the, marketer has thoroughly studies and analyzed the market conditions and set the advertising objectives, the advertising budget has to be set. For setting advertising budget, there are four methods:
• Fixed Percentage of Sales Method
• Competitive Parity Method
• Objective and Task Method
• Affordability Method
Fixed Percentage of Sales Method
Under this method the company sets aside a fixed percentage, say 5 percent, of sales as the advertising budget. Thus if the sales of the company are Rs 100 crores, Rs 5 crores is the advertising budget and if the sales are Rs 50 crores, the advertising budget gets reduced to Rs.2,5 crores. This method avoids an 'advertising war' and the company will not go overboard with its advertising campaigns. This method also links advertising to sales.
Competitive Parity Method
Under this method, company spends on advertising an amount similar to what competitors spend. The method is based on the premise that the 'industry average' spend will work well for all major players in the market The method works well in mature markets where products are well-established and have predictable sales patterns. The biggest demerit of this method of setting advertising budget is that it ignores the effectiveness of the advertising spends of a particular company and relies on the judgment of other companies. It also thwarts a particular company from increasing its market share by spending more than the industry average.
Objective and Task Method
The American Marketing Association defines the objective and task method of setting advertising budget as, "an advertising budget method in which advertising expenditures are determined on the basis of a specific audit of the resources needed to achieve the specific objectives and tasks outlined in the advertiser's media plan."
The affordability method, also referred to as the residual approach, decides the advertising budget on the basis of what the business can afford. Clearly this method is not objective at all as it fails to associate marketing objectives with levels of advertising. This method leads to uncertain advertising budget being set every year.
Advertising Media Deciding on the media is one of the biggest decisions that the advertiser has to take. The advertiser has to decide on the desired reach and then choose from amongst major media types like print electronic, Internet etc. Other decisions like selection of media vehicles and media timing have also to be taken. An advertiser could use the following media for advertising:
Out-of-home (OOH) advertising also referred to as place advertising, captures many different alternative advertising forms. The intent behind such advertising is to grab the attention of the people when they are out-of-home such as when they are at work, or play or shopping. Advertisers use creative advertisement placements to grab consumer's attention. Some of the commonly used options availed by advertisers are billboards, public places, product placement and point-of-purchase.
Billboards have literally come of age. Some experts say that the use of digital technology has transformed OOH advertising to DOOH (digital out-of-home) advertising. These days use multi-colored, digitally produced graphics and even three-dimensional images. These towering structures on highways and prominent shopping areas are bound to catch the attention of the consumers.
Advertisers place traditional TV and print advertisement in public places tike movies, airlines, sports arenas, hotel elevators, bus stops and many other public places.
There has been a phenomenal growth in product placement as they have expanded from movies to television shows. Advertisers pay a lot of money for their brands to appear in such movies and shows.
Point-of-purchase (POP) advertising includes placing advertisements on shopping carts, aisles and shelves, behind the cash counter and having in-store demonstrations. Research reveals that consumers generally make their final decision decisions in stores especially for fast moving consumer goods. POP advertising is also useful for increasing impromptu buying decisions
Internet has become a very important media for advertising in recent years. Companies tend to take the advantage of low cost by advertising on the Internet. The Internet penetration in India is not as high as in other developed countries like the United States however internet as a media has caught the fancy of the advertiser and the consumer alike. The use of Internet as an advertising media will surely increase in the times to come.
Sales promotion refers to a collection of short term incentive tools designed to encourage faster and/or larger purchase of products or services by consumers or the trade. While advertising offers a reason to buy, sales promotion offers an incentive to buy. Several factors have contributed to the rapid growth of sales promotion, particularly in consumer markets. The internal factors that have led to an increase in sales promotion are: -
• Promotion is now more accepted by top management as an effective sales tool
• Managers are under greater pressure to increase current sales
In addition to the internal factors, external factors have also contributed to the increased use of sales promotion tools:
• The number of brands has increased.
• Competitors use promotions frequently.
• Products are becoming standardized and similar and so need increased support of nonprice factors like sales promotion.
• Advertising efficiency has declined because of rising costs, media clutter and increased impulsive buying.
• With virtually no brand loyalty, offer of attractive schemes help manufactures to induce such customers to choose their product
• Measurement of the effectiveness of sales promotion is easier as against the other promotional methods.
• Channels of distribution are emerging as powerful entities and demand greater use of incentives to get desired results.
The rapid growth of sales-promotion media has created a situation of promotion clutter similar to advertising clutter. The day is not far off when manufacturers will have to find ways to rise above this clutter, similar to what they do in advertising/by offering innovative, dramatic and extremely lucrative sales promotion tools. At this juncture let us look at the various sales promotion tools that are used by marketers. Depending upon the creativity level of their sponsors, their variety seems very large. The accomplishments of the desired promotion and marketing objectives ultimately depend on the extent of the desired response received from consumers, dealers and, of the sales force. Hence sales promotions include tools for :
• Consumer promotion.
• Trade promotion.
• Sales-force promotion.
In terms of the impact desired the variety of sales promotion schemes offered are grouped into two categories:
• Immediate impact tools
• Delayed impact tools
The role of public relations is to foster goodwill between a firm and its customers, suppliers, and dealers. In addition to this there are many other groups that like various government entities, public action groups like environmentalists and the general public that may have an interest in the functioning of the company or may impact the functioning of the company. A company must relate constructively to ail such groups through its public relations department. This department keeps an eye on the attitudes of all these stakeholders and disseminates information and communications to them.
The American Marketing Association terms Public Relations as "that form of communication management that seeks to make use of publicity and other non-paid forms of promotion and information to influence the feelings, opinions, or beliefs about the company, its products or services, or about the value of the product or service or the activities of the organization to buyers, prospects, or other stakeholders."
By: NIHARIKA WALIA ProfileResourcesReport error
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