Chapter 9

Promoting Products: Communication and

Promotion Policy and Advertising

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Key Terms• Informative advertising• Media• Promotion mix• Reminder advertising • Atmosphere• Channel conflict• Events

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“I don’t know who you are. I don’t know your company. I don’t know your company’s product. I don’t know what your company stands for. I don’t know your company’s customers. I don’t know your company’s record. I don’t

know your company’s reputation. Now— what was it you wanted to sell me?”

-- McGrawMcGraw –– Hill PublicationsHill Publications

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Chapter ObjectivesChapter Objectives

• Outline the six steps six steps in developing effectiveeffective communications

• Define the ways of setting a total promotional budgetbudget

• Explain each promotional tool each promotional tool and the factors in setting the promotion mix

• Describe the major decisions major decisions in advertising

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Promotion Mix

• A promotion mix is a company’s total marketing communications program and it consists of a specific blend of:

– AdvertisingAdvertising– Sales PromotionsSales Promotions– Public RelationsPublic Relations– Personal SellingPersonal Selling

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The Communication ProcessThe Communication Process

1. Identify the target audiencetarget audience2. Determine the communication

objectiveobjective

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Buyer Readiness StatesBuyer Readiness States

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Communication StrategyCommunication Strategy

• The communication process has 6 6 broad stages

– To whomwhom to say it– WhyWhy to say it– WhatWhat to say– HowHow to say it – How oftenoften to say it– WhereWhere to say it

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Communications StrategyCommunications Strategy

To whom to say itTo whom to say it– Define the targettarget

market– Research– Wants and needs

clearly identified

Why say itWhy say it– Expect it to have a

certaincertain effect– What needs to be

accomplished

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Communications StrategyCommunications Strategy

• What to sayWhat to say– Methods chosen

need to achieve the strategic objective

– Consumer adoption process model

• How to say itHow to say it– The execution stage–Communication that

most accurately accomplishes the goals consistent with the target market

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Communications StrategyCommunications Strategy

• How often to say itHow often to say it– Consumer-driven

and budget-driven

• Where to say itWhere to say it– Using the various

components of the communications mix– Select appropriate

media

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Communications StrategyCommunications Strategy• Push/pull strategiesPush/pull strategies– Push strategyPush strategy

Marketing communication efforts to intermediariesintermediaries, who then push the product to their customer base

– Pull strategyPull strategyMarketing communication efforts directly to the consumerconsumer, who purchases the product directly or through an intermediary

– Both are common in the communications industry

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Push vs. Pull Strategy

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens13

Word of Mouth (WOM) Communication Word of Mouth (WOM) Communication

• Most powerful form of communication• Products cannot be tested before

purchase so outside advice is important• Elements of the communication mix

can influence WOM• In this way, what we what we dodo has more

impact than what we what we saysay

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Word of Mouth (WOM) CommunicationWord of Mouth (WOM) Communication

• Impact of word of mouthImpact of word of mouth– Should give people something interesting

to talk about– Create communities and networks to

connect people– Work with influential communities– Create advocate programs– Blogs

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Word of Mouth (WOM) CommunicationWord of Mouth (WOM) Communication

• Measuring word of mouthword of mouth– Lifetime value of a customer based on:• Gross profit on an average purchase• Average number of purchases a customer

makes each year• Average number of years customer will

continue to purchase• Probability that customer will continue to

purchase

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The Communication ProcessThe Communication Process

Design the messageDesign the message

• Message ContentContent • Message StructureStructure • Message FormatFormat • Message SourceSource

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The Communication ProcessThe Communication Process

• Select Communication ChannelsChannels

• PersonalPersonal Communication Channels • NonNon--personal personal Communication Channels

• Select the Message Source

• Measure Communication Results

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Establishing the Total Marketing Establishing the Total Marketing Communications BudgetCommunications Budget

• Affordable Method Affordable Method – based on what the company can afford

• Percentage of Sales Method Percentage of Sales Method – based on a percentage of current or forecasted sales

• Competitive Parity Method Competitive Parity Method – based on competitors’ budgets

• Objective and Task Method Objective and Task Method – based on objectives, tasks, and estimated costs

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Nature of Each Promotion ToolNature of Each Promotion Tool

Advertising Advertising

Personal Selling

Personal Selling

SalesPromotion

SalesPromotion

PublicRelations

PublicRelations

DirectMarketing

DirectMarketing

Reach Many Buyers, Repeat Message Many Times, Impersonal, Expensive

Reach Many Buyers, Repeat Message Many Times, Impersonal, Expensive

Personal Interaction, Relationship Building, Most Expensive Promotional

Tool

Personal Interaction, Relationship Building, Most Expensive Promotional

Tool

Wide Assortment of Tools, Rewards Quick Response, Efforts Short-LivedWide Assortment of Tools, Rewards Quick Response, Efforts Short-Lived

Very Believable, Dramatize a Company or Product, Underutilized

Very Believable, Dramatize a Company or Product, Underutilized

Nonpublic, Immediate, Customized, Interactive

Nonpublic, Immediate, Customized, Interactive

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Factors in Setting the Promotion Mix

• TypeType of Product and Market

• PushPush vs. PullPull Strategy

• Buyer ReadinessReadiness State

• Product Life-CycleLife-Cycle Stage

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AdvertisingAdvertising• Advertising is any paid form of non-personal

presentation and promotion of ideas, goodsideas, goods, or services by an identified sponsor

• Role of advertisingRole of advertising– To inform, create awareness in, and attempt to

persuade new customer and reinforce the buying behavior of present customers

– For hospitality, most important to create and maintain awareness of the firm, or promote a particular component or service

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AdvertisingAdvertising• Ideally, will accomplish:Ideally, will accomplish:– Tangibilize the service element– Promise a benefit that can provide

solutions to problems– Differentiate the property from that of the

competition– Have positive effects on employees who

must execute the promises– Capitalize (benefit) on word of mouth

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AdvertisingAdvertising

CollateralCollateral material material– Promotional

materials such as brochures, direct mail, and other forms of advertising that are used to informinform customers and createcreate interest

MerchandisingMerchandising– A tool used in the

marketing communications mix to reach identified target markets

– Primarily an in-house marketing technique used to stimulate sales of additional products or services on premise

– A long-term goal is increasing customer satisfaction

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MMerchandisingerchandising

Basic rules of merchandising:– Have a purposepurpose beyond sales

projections– CompatibilityCompatibility and consistency– PracticalityPracticality– ConsistencyConsistency– SimplicitySimplicity

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MMerchandisingerchandising

• Examples of good merchandising– Business centers Business centers in hotels that cater

to business travelers– PizzaPizza on finer hotels’ room service

menus– Mini bars Mini bars in guest rooms

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Major Decisions in AdvertisingMajor Decisions in Advertising

• Setting the ObjectivesObjectives

• Setting the Advertising BudgetBudget

• Message DecisionsDecisions

• Media DecisionsDecisions

• Campaign EvaluationEvaluation

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Setting the ObjectivesSetting the Objectives• Informative advertising Informative advertising is used to inform

consumers about a new product or feature to build primary demand

• Persuasive advertising Persuasive advertising is used as competition increases and a company’s objective becomes building selective demand

• Reminder advertising Reminder advertising is used for mature products since it keeps consumers thinking about the product

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Major Advertising DecisionsMajor Advertising Decisions

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Setting the Advertising BudgetSetting the Advertising Budget

• Specific factors to be considered when setting an advertising budget:– Stage in the product life cycle – Competition– Market share – Advertising frequency – Product differentiation

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Setting the Advertising BudgetSetting the Advertising Budget

• General factors to consider:General factors to consider:– Strategic versus Tactical Budgets – Overall Promotional Budget – Consistency – Opportunities to Stretch the Budget – The Final Budget

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Message DecisionsMessage Decisions

• Message Generation

• Message Evaluation and Selection

• Message Execution

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Media DecisionsMedia Decisions

• Deciding on ReachReach, FrequencyFrequency, and ImpactImpact

• Choosing Among Major Media TypesMedia Types

• Selecting Specific Media VehiclesMedia Vehicles

• Deciding on Media TimingMedia Timing

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Profiles of Major Media Types

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens34

Public RelationsPublic Relations (PR) (PR)

• PR effort can steersteer in a positive or negative way

• Press release is a prepared document for release to selected media containing information or “newsnews” about a firm

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Public RelationsPublic RelationsUndertaking public Undertaking public relationsrelations– An ongoing task that is

an important part of the marketing planning

– Happens at corporate, property or unit level

– Employee and management belonging to public organizations contributes in some manner to PR

Planning public relationsPlanning public relations

– Identify a purpose and know the target markets

– Consider the benefit to the customer

– Know the correct media to reach the target market prospects

– Establish relationships with editorseditors and writerswriters and other media

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Public RelationsPublic Relations

Public relations guidelinesPublic relations guidelines:– Budget and spendspend wisely– Use reputable PR personnelpersonnel or firms– Have a writtenwritten PR planplan– PR people must understandunderstand your plan– Have a consistent, ongoingongoing program– Generate innovativeinnovative ideas– Great PR depends on creativecreative management

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PublicityPublicity Publicity is created to

generate continued positive coverage positive coverage of a firm

Have a targeted purpose and an evaluation post-publicity

Publicity helps with promotions

Starts with inviting media to cover a specific event

Press releases Press releases of background information are made available at the event

PR works the event, pitching to the media

Follow-up calls and thank you

Program evaluation Make provisions for the

unexpected; crisis management teams

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DiscussionDiscussion Questions Questions• Find several advertisements for a hospitality or

travel organisation. Then visit their web site. Is the communication provided on the web site congruent with and support their print adverstising and broadcast advertising? Explain your answers.

• Recently, a number of restaurants have shifted some of their promotional budget from advertising to public relations. What benefits does public relations offer that would make the restaurants spend more?

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End of End of chapter slideschapter slides

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