What is Marketing Communication ?
The process, through which consumers (or potential consumers) are attracted towards the products and services of different producers or manufacturers, is called promotion or marketing communication. This process informs and reminds the potential consumers about the products and services of the manufacturers. It is also used to request and persuade the consumers to buy these products and services. However, this promotion may either be performed in the presence of the product, or even before its market introduction.
Definition of Promotion or Marketing Communication
According to Stanton :
"Promotion or Marketing Communication includes, advertising, personal selling, sales promotion and other selling tools".
According to Philip Kotler :
"Promotion compasses all the tools in the marketing mix whose major role is persuasive communications".
Hence, different actions of the manufacturers or producers, responsible for stimulating consumers to buy their products and services, come under the concept of promotion. It is a type of marketing communication activity which is responsible for prompting potential customers to buy, use, recommend or resell the organisational products, services or ideas.
To inform, to persuade and to remind, are the three basic objectives of promotional communication, which have to be achieved during different stages of the product life cycle (PLC).
For example, promotion is informative during launch phase of the PLC later in the growth stage, it becomes persuasive and at the maturity stage, it works as reminder as well as persuasion. The end consumer is not the sole target o of the promotional activities; institutions, intermediaries. at organisational buyers may also be the target of such activities. Therefore, both profit and non-profit institutions use promotion as a significant tool.
Objectives of Marketing Communication
Various objectives of marketing communication are as follows :
1) To Modify Behavior :
The primary objective of any marketing communication programme is to modify the thought process and behavior of individuals (like inducing customers to prefer Coca-Cola over Pepsi) and to maintain this modified behavior among them (like inducing customers to continue their preference for Coca Cola once they started to use it). Therefore, the aim here is to motivate the customers to buy the organisational goods and services and hence develop a sound image in their minds.
2) To Inform :
To inform the widespread market about the organisation's products and services is the next important objective of any marketing communication programme. This objective is the basis behind designing all the promotional communications. A product or service is largely promoted through informative promotion in its initial phase of product life cycle so as to enhance its primary demand in the market. Information. about the product as well as its features is the first thing that any customer requires for smart decision-making.
3) To Persuade :
Another important objective of marketing communication is to persuade the customers for purchasing organisational goods and services thus, increasing the sales. A product or service is largely promoted through persuasive promotion in its growth phase of product life cycle as both consumer creation and consumer retention objectives are simultaneously targeted here. Despite of enhancing the current sales, sometimes organisations aim to develop a positive image among consumers so as to attain a long-term gain.
4) To Remind :
Reminding customer about the available organisational products and services is also an important objective of marketing communication programme. Under this objective, organisations refresh the memory of customers (since they assume that organisational products and services are known to customers) so as to make them aware that the particular product or service is still satisfying their demands. In case the product is in maturity phase of product life cycle. this objective is targeted by the organisation. The whole idea behind this marketing communication objective is to maintain the position of the product or service in the minds of customers.
5) To Change Demand Pattern :
The overall objective of marketing communication is to change the demand pattern of the organisational product or service. All the promotional objectives like behavior modification, informative. promotion, persuasive promotion and reminding. are centrally focused towards changing the demand pattern for a particular product or service. Economically, the objective of promotion is to affect the shape and location of the demand curve. It also means to affect the demand curve even temporarily or shifting it upwards.
Importance of Marketing Communication
The role of marketing communication in communicating value to customers in target market can be explained with following points :
1) Increasing Awareness :
Promotion becomes highly critical activity when a product is at nascent stage in the market or it is to be launched in a new potential market. Thus, the overall market awareness of the product has to be increased by citing research about the product, validating usefulness and appeal of the product, and by attracting maximum media attention towards the product, to portray a popular image of the product. The existence of the new product in the market has to be effectively conveyed to the target consumers.
2) Increasing Knowledge and Preference :
Customers would not directly purchase the new product or brand only by knowing that it exists in the market. Promotion has the responsibility to further communicate the usefulness of the brand to customers by assuring that the product is required by them. Putting together product (or brand) awareness and information, is a way to attract more customers towards the stores for finding promoted products.
3) Increasing Retailers :
Promotion communication designed by the organisations, improves the awareness and knowledge of the potential consumers about the new product(s). These consumers seek the promoted product(s) in the retail stores. This prompts the retailers to offer the promoted product(s) in their stores. It motivates the other retailers to offer the same product(s). Therefore, promotion helps in increasing the number of retailers.
4) Increasing Sales and Establishing Brand :
Increase in sales is the final measure of a successful promotional strategy. As the three basic objectives of promotion are to inform, to persuade and to remind, an effective promotion strategy leads to the sales increment of a particular product or product-mix. It describes how products and services offered by organisations are different from those of competitors. Thus, it helps in sales increment and thereby building-up of brand loyalty.
5) Maintaining Public Profile :
A sound public profile of the organisation and its products is developed through the effective use of promotion. It helps in communicating the capabilities and importance of the organisational products to target customers. Thus, it enables the customers to buy more.
Strategies of Marketing Communication
Following are the two main marketing promotion strategies :
1) Push Strategy :
When market intermediaries of the distribution channel are targeted to design the promotional programme, it is called push strategy. In this strategy, market intermediaries are encouraged to buy or stock the organisational products, promote them and ultimately sell them to target customers as given in figure. Here, different incentive schemes are offered to the market intermediaries (distributors, wholesalers and retailers) for pushing the product in the market. Through this strategy, distributors are encouraged to offer the products to the wholesalers, who then persuade the retailers to buy these products, and finally encourage the target customers to buy it.
In push strategy, promotional techniques like sales promotions, personal selling, trade shows and contests for salespersons are used. Push strategy is best applied under conditions, when :
- The brand clutter or brand identity is weak
- Product differentiation is not available
- Access to advertising media is not possible
- The budget for promotion is low
- There is availability of low wages, i.e., low, cost of employing salespersons as compared to advertising cost.
- Brand loyalty is low
- Marketing channels are short and direct,
- Products are industrial in nature
- Appreciating product benefits is difficult
- Institutional sales are present
Push strategy is frequently used (to move products through the distribution channel) by the firms having low budgets for promotion. Moreover, it is hard for the customers to make a difference between the competing brands due to brand commoditisation, which makes push strategy more operative.
2) Pull Strategy :
In the pull strategy customers are encouraged to purchase the product from the retailers through promotional programmes, as shown in figure. Due to this strategy, customers demand the promoted product from retailers. Consequently, retailers demand the given product from the wholesalers, who, in turn, demand the product from distributors, and Finally, distributors order the product from organisations.
Pull strategy is best applied under the conditions, when :
- Brand identity is strong
- Category of the product is high-involvement product
- There is perceived product differentiation
- Brand loyalty is high
- Promotional budgets are high
- Retail includes self-service, i.e., supermarket culture
In pull strategy promotional tools like advertising and sales promotion campaigns (such as gift vouchers, samples, discounts, etc.), are used which are targeted at potential customers. Moreover, long-term brand loyalty can be developed among customers through pull strategy. A suitable mix of push and pull strategies may also be used in case of a situation resembling any of the above mentioned factors and situations.
Marketing Communication Process
In order to develop an effective marketing communication, good coordination with the customers is required. This means that in such a case, the customer acts as a focal point on which a firm should emphasize. It also needs to ensure that one on-one communication method is adopted, and the communication process is two-way where both firm and the customers can give their words. Effective marketing communication can be developed using the following steps :
Identifying Target Audience
This is the very first step involved in the process of developing effective marketing communication. Identify the target audience is crucial for developing effective marketing communication as several key decisions what to say, where to say, when to say and how to say, are dependent on the nature of the target audience. Therefore, it is necessary for the marketers to understand the target audience and their culture as it greatly influences their perception regarding the product. In order to develop effective marketing communication programme, marketers must have knowledge of :
- Entire process of consumer decision-making
- Factors affecting buying behavior
- Buying motives and goals of buyers
- Process of collecting and using information by consumers for evaluating alternatives
- Process of consumer attitude formation
- Method to persuade customers
In this way, it becomes essential to understand the culture of the target audience as different cultures have different factors influencing the buying process. Moreover, customers of different cultures interact differently with the same product.
Determining Communication Objectives
The main aim of any marketer is to achieve his communication objectives. Marketing communication helps the marketer to take buyers through these stages and induce them to purchase and re-purchase. For this purpose, marketer must know the exact stage of the buyer and what stage they need to be taken to.
The next step in the process of developing effective marketing communication is to determine the communication objectives. Depending on the stage of the brand in product life cycle and type of communication tool used, different communication objectives are designed by the organisations. Affecting the minds of consumers, developing product related positive attitudes, and stimulating consumers to act favorably, are the main objectives of any marketing communication programme. Once set, communication objectives have following significance :
- They are used as a guide while making important decisions regarding media, budgeting, innovation, etc.
- They are used as a benchmark to evaluate the success or failure.
Time-bound, quantitative, measurable, realistic, specific, and singularity of purpose, are the key features communication objectives. Irrespective of the type of the culture of the target audience, it is crucial to set communication objectives.
Designing the Communications
After determining the communication objective, the next step of marketing communicator is to design an effective message the target audience. This message should be designed under the AIDA framework, i.e., it should grab Attention, hold Interest, stimulate Desire and gain Action. A marketer can take the customer from awareness stage to purchase stage after few messages, but AIDA suggests some essential requisites a good message. While designing the message, the marketer must decide the content, structure and format of the message. These are explained as follows :
1) Message Content:
The marketer must decide a theme or appeal to achieve the desired results. Following are the types of appeal :
i) Rational Appeal :
This type of message appeal communicates with the interests of target audience and claims to fulfill the benefits derived from the product, e.g., quality, value, performance, economy etc.
ii) Emotional Appeal :
These appeals aim at inducing either positive or negative emotions that will stimulate the buyers to take the buying decision, e.g., fear, pride, guilt, love, shame, joy and humor appeal.
iii) Moral Appeal :
These appeals arouse the moral sense of the target audiences of what is right and what is wrong.
2) Message Structure :
Structure decides the way in which the message will be delivered. The three basic concerns are as follows :
- The first concern is to decide whether the conclusion should be drawn by the marketer or it should be left upon the target market. However, it is considered that marketers should motivate the customers to get involved and think about the product and let them make their own conclusions.
- The second type of structure is whether to mention only the positive attributes of the product or to disclose the negative aspects 100. A company must present both aspects of the product before the sophisticated and empowered customers.
- The last concern is whether to present strong arguments first or last. Though it is observed that presentation of strong arguments first grabs strong attention but may lead to anti climax ending.
3) Message Format :
Format represents the way of presentation and layout of the message. For example, headline, copy, illustration, color, etc., are determined by the marketer in any print advertisement.
Selecting Communication Channels
Once designing of the communication message is over, the next step is to select the communication channels through which the message will be transmitted to the customers. These communication channels refer to the various media used in the communication process. Choosing a wrong media will decrease the effectiveness of the message no matter how good the communication idea is Hence, the communicator should select the appropriate channel of communication. The two broad channels of communication are explained below :
1) Personal Communication Channels :
Personal communication channels are considered as the most effective way of communicating with the audience. In this channel, one-to-one communication takes place between two or more people over the phone or face-to-face. Other options include fax machine, mail, internet, text messaging, etc.
2) Non-Personal Communication Channels :
As the name suggests, these communication channels do not involve any personal contact or feedback process while transmitting the message. In such communication channels, there is no: personal contact between the marketer and the audience. The communication is held through. television, radio, posters, billboard, etc. Various media like print media, broadcast media, display media, online media, etc., are involved in it.
For example, radio, television, newspapers. magazines, sign-boards, posters, websites, etc. Several atmospheres and events are also involved in this. Here, atmosphere means, the designed environment created by the marketers for attracting the customers to buy the product.
Deciding the Total Communication Budget
After deciding about the communication channel the marketer needs to decide the communication budget. In literal meaning, the term "budget' refers to the quantitative or financial statement prepared before a specific time period of the policy for which budgeting is done so as to achieve the required objectives. However, it is very difficult to decide about how much expenditure should be involved while planning the communication budget. In case of product promotion, budget is prepared by the promotion manager after consulting the marketing manager. Such budget involves estimates of funds required for promotional tools to be used as well as allocation of funds in different medias, sales activities, sales territories, etc. Following are the budgeting methods used in determining the promotional budget :
1) Percentage of Sales Method :
In this method, the advertising budget is determined by the product of the value of previous year's sales or estimated sales for the specified budget period and a pre-determined percentage.
Advertising Budget Amount = Past Year's Sales or Anticipated Sales x Pre-determined Percentage
Several factors such as nature of product, stage of product life cycle, availability of capital, level of competition faced in the market, amount of funds spend by rivals on advertising, etc., influence the pre-determined percentage, while calculating advertising budget. The total percentage of sales appropriated for advertising budget differs from industry to industry.
For example, companies dealing consumer durable goods such as cosmetic brands, appropriate 30-40 per cent of sales for advertising budget, while other companies from steel or mining industry appropriate 1-2 per cent of sales for advertising.
2) Competitive Parity Method :
In this method, the same amount or proportion of fund as that of the competitors is used by the firm for advertising. This traditional method is chosen to make the firm at par with competitors. In this approach, advertising is considered as a safeguarding mechanism and not an aggressive or combative mechanism. With a view to avoid any drawback, the company devotes same amount of funds as spent by the competitors. It includes gathering relevant information about the funds allocated by the competitors towards advertising. The basic postulation of this approach is that the company under consideration is aware about the activities being planned and executed by its competitors.
3) Objective and Task Method :
Objective and task method is the most preferred and prudent approach of establishing advertising budget. The basis of this technique is to establish the advertising objectives and spot the different activities to, be executed to accomplish those objectives. The initial stop would be to the advertising objectives and goals. And then, the various tasks to be conducted to attain these advertising objectives, are recognized. Later on, the costs to be incurred for all these tasks are evaluated and the advertising budget is computed by adding these costs. Some amount of fund is also allocated for contingencies. ascertain
4) Judgement Method :
The judgement of experienced and senior managers of the firm forms the basis of determining the advertising budget under the judgement method. Under this method, the premises of deciding advertising budget are not the scientific lines, but the subjective or irrational thinking of few experienced managers. Through the years, these managers gain sufficient experience which makes them competent to strike the relevant advertising budget figure by using their own judgment. Various pertinent factors such as availability of funds, cost of employing different media, objectives of advertising, stage in product life cycle, nature of consumers, activities and related responses of competitors, etc. are considered by these managers while determining the entire amount of advertising budget.
5) Incremental Concept Approach :
It is also known as Increase over Last Year's budget. It is a customary approach to budgeting. The previous year's budget is taken as the baseline by the managers for computing ad budget of the current year either by adding or subtracting from it as per the estimated requirements of the company. Increasing the previous year's budget by a fixed percentage to facilitate a company to think about raising advertising expenditure and to render for planned increase in sales is included in this method. Advertising cost is increased due to increase in price level of advertising inputs. Therefore, this method is also called as incremental budgeting.
6) Return on Investment (ROI) Method :
Here. costs incurred for advertising is regarded as an investment and not as usual revenue expenditure. Therefore, the return on investment is completely a different approach in comparison with other methods used for preparing ad budget. Advertising is also projected to contribute definite returns in the same way as any other investments of the company. An intangible asset "brand equity is established due to advertising which has a certain market value and can be sold at any stage in the market. Brand equity is pertinent to brand preference and brand acceptance. Usually, this income generated from advertising by the company, extends over a particular time-period.
Deciding Marketing Communications Mix
While deciding about the marketing communication mix, wide-ranged alternatives are available in front of the marketing managers, out of which one or more can be chosen. Here, marketing managers have to take decisions regarding the marketing communication tools. They need to take decisions about the advertising, selling, promotional activities, public relation, direct marketing, etc. Different media may be used at different stages of the product life cycle by the firm so as to fulfill its marketing objectives in the best possible way. The allocated amount of budget for one communication tool may be more than the other. The major objective behind selecting an optimal media mix is to establish such a pattern that leads to optimum utilization of spending in all media and helps in achieving the corporate objective of the firm.
Measuring Communication Results
The last step in developing effective communication programme is to measure the communication results. Therefore, marketers prefer to evaluate the effectiveness of the communication programmnes. It helps in evaluating the alternative communication strategies and prevents costly mistakes. Such assessment should be in line with the firm's objectives.
The evaluation process can be conducted at two levels, i.e., before the commencement of the communication (pre-testing) or after the commencement of the communication (concurrent testing). In pre-testing, different aspects of the communication like message format, content, media, etc.. are evaluated. In concurrent testing, communication programme is evaluated so as to add any required changes. As discussed earlier, culture has deep influence on the audiences, hence while evaluating the results via research differences must be considered.