Marketing Communication Textbook PDF

Marketing Communication Course code: BBSSM 2202 Text Book for Students VOCATIONAL EDUCATION DIPLOMA PROGRAM Page | 1  Chapter 1: Introduction to Marketing communication Marketing communications is a management process through which an org...

Marketing Communication Course code: BBSSM 2202 Text Book for Students VOCATIONAL EDUCATION DIPLOMA PROGRAM Page | 1  Chapter 1: Introduction to Marketing communication Marketing communications is a management process through which an organization enters into a dialogue with its various audiences. To accomplish this, the organization develops, present and evaluates a series of messages to identified stakeholder groups. The objective of the process is to influence the perception, understanding and action the target audience has towards the organization and / or its products and services. Effective communication is critically important to an organization which is why they use a variety of promotional tools. Advertising, sales promotion, public relations, direct marketing, personal selling and added-value approaches such as sponsorship are the most used. Learning Objectives: The main objectives of this lesson are:  To define marketing communication.  To understand the role of marketing communication  To familiarize marketing communication mix  To describe the Effectiveness of promotional tools. 2|P a g e  1. Communication a) Definition: Communication has been variously defined as the passing of information, the exchange of ideas, or the process of establishing a commonness or oneness of thought between a sender and a receiver. These definitions suggest that for communication to occur there must be some common thinking between two parties and information must be passed from one person to another (or from one group to another). b) The Communication Process The communication process illustrates how messages are sent and received, as shown in Figure 1, “The Communication Process”.  The source (or sender) encodes, or translates, a message so that it’s appropriate for the message channel—say, for a print advertisement, TV commercial, or store display—and shows the benefits and value of the offering. 3|P a g e  The receiver (customer or consumer) then decodes, or interprets, the message. For effective communication to occur, the receiver must interpret the message as the sender intended.  Interference, or noise, can distort marketing messages. Interference includes any distractions receivers and senders face during the transmission of a message. For example, when you were growing up did you see commercials for toys such as the pogo ball, which appeared to be so easy to use but when you tried to jump up and down on it, you found out it was extremely difficult? The same thing may happen if you’re studying for an exam while you’re talking on the phone. The conversation interferes with remembering what you’re reading. Factors such as poor reception, poor print quality, problems with a server, or a low battery can also interfere with your getting messages.  Purchasing a product provides the sender with feedback, which often tells the seller that you saw information and wanted to try the product. If you use any coupons or promotions when you buy a product, the advertiser knows which vehicle you used to get the information. Market research and warranty registration also provide feedback. 4|P a g e  c) Factors affecting the communication process: The communication process is often very complex. Success depends on such factors as:  The nature of the message.  The audience’s interpretation of the message.  The environment in which message is received.  The receiver’s perception of the source and the medium used to transmit the message may also affect the ability to communicate, as do many other factors. Words, pictures, sounds, and colors may have different meanings to different audiences, and people’s perceptions and interpretations of them vary. For example, if you ask for a soda on the East Coast or West Coast, you’ll receive a soft drink such as Coke or Pepsi. However, in parts of the Midwest and South, a soft drink is referred to as pop. If you ask for a soda, you may get a glass of pop with ice cream in it. Marketers must understand the meanings that words and symbols take on and how they influence consumers’ interpretation of products and messages. This can be particularly challenging to companies marketing their products in foreign countries.  Language is one of the major barriers to effective communication, as there are different languages in different countries, different languages or dialects within a single country, and more subtle problems of linguistic nuance and vernacular. 5|P a g e  2. Marketing Communication a. Definition Marketing communications is a management process through which an organization enters into a dialogue with its various audiences. Based upon an understanding of the audiences’ communications environment, an organization develops and presents messages for its identified stakeholder groups, and evaluates and acts upon the responses received. The objective of the process is to (re)position the organization and for its products and services, in the minds of members of the target market, by influencing their perception and understanding. The goal is to generate attitudinal and behavioral responses. Marketing communications is a management process through which an organization enters into a dialogue with its various audiences. b. The role of marketing communication Bowersox and Morash (1989) demonstrated how marketing flows, including the information flow, can be represented as a network whose sole purpose is the satisfaction of customer needs and wants. Communication plays an important role in these exchange networks. At a basic level, communication can assume one of four main roles: 1. It can inform and make potential customers aware of an organization’s offering. 2. Communication may attempt to persuade current and potential customers of the desirability of entering into an exchange relationship. 3. Communication can also be used to reinforce experiences. This may take the form of reminding people of a need they might have, or of reminding them of the benefits of past transactions with a view to convincing them 6|P a g e  that they should enter into a similar exchange. In addition, it is possible to provide reassurance or comfort either immediately prior to an exchange or, more commonly, post-purchase. This is important, as it helps to retain current customers and improve profitability. This approach to business is much more cost-effective than constantly striving to lure new customers. 4. Marketing communications can act as a differentiator, particularly in markets where there is little to separate competing products and brands. Mineral water products, such as Perrier and Highland Spring, are largely similar: it is the communications surrounding the products that have created various brand images, enabling consumers to make purchasing decisions. In these cases the images created by marketing communications disassociate one brand from another and position them so that consumers’ purchasing confidence and positive attitudes are developed. Communication can inform, persuade, reinforce and build images to delineate a product or service. is a management process through which an organization enters into a dialogue with its various audiences. 7|P a g e  c. The marketing communication mix The marketing communications mix consists of a set of tools which can be used in different combinations and different degrees of intensity in order to communicate with a target audience. This 'bag of tools' is also referred to as the promotional mix. In addition to these tools or methods of communication, there is the media, or the means by which marketing communication messages are conveyed. Tools and media should not be confused as they have different characteristics and seek to achieve different goals. There are five principal marketing communications tools: these are advertising, sales promotion, public relations, direct marketing and personal selling.  Advertising is a non-personal form of mass communication and offers a high degree of control for those responsible for the design and delivery of the advertising message. However, the ability of advertising to persuade the target audience to think or behave in a particular way is suspect. Furthermore, the effect on sales is extremely hard to measure. Advertising also suffer from low credibility in that audiences are less likely to believe messages delivered through advertising than they are messages received through some other tools.  Sales promotion comprises various marketing techniques which are often used tactically to provide added value to an offering, with the aim of accelerating sales and gathering marketing information. Like advertising, sales promotion is a non-personal form of communication but has a greater capability to be targeted at smaller audiences. It is controllable and, although it has to be paid for, the associated costs can be much lower than those of advertising. As a generalization, credibility is not very high, as the sponsor is, or should be, easily identifiable. 8|P a g e  Personal selling is traditionally perceived as an interpersonal communication tool which involves face-to-face activities undertaken by individuals, often representing an organization, in order to inform, persuade or remind an individual or group to take appropriate action, as required by the sponsor's representative. A salesperson engages in communication on a one-to- one basis where instantaneous feedback is possible. The costs associated with interpersonal communication are normally very large. The costs associated with interpersonal communication are normally very large.  Public relation is 'the art and social science of analyzing trends, predicting their consequences, counselling organizations’ leadership, and implementing planned programs of action which will serve both the organization’s and the public interest'. This definition suggests that public relations should be a part of the wider perspective of corporate strategy. The increasing use of public relations, and in particular publicity, is a reflection of the high credibility attached to this form of communications. There is a wide range of other tools used by public relations, such as event management, sponsorship and lobbying. It is difficult to control a message once placed in the channels, but the endorsement offered by a third party can be very influential and have a far greater impact on the target audience than any of the other tools in the promotional mix. This non-personal form of communication offers organizations a different way to communicate, not only with consumers but also with many other stakeholders.  Direct marketing seeks to target individual customers with the intention of delivering personalized messages and building a relationship with them 9|P a g e  based upon their responses to the direct communications. In contrast to conventional approaches, direct marketing attempts to build a one-to-one relationship, a partnership with each customer, by communicating with the customers on a direct and personal basis. If an organization chooses to use direct marketing then it has to incorporate the approach within a marketing plan. This is because distribution is different and changes in the competitive environment may mean that prices need to change. For example, charges for packing and delivery need to be incorporated. The product may also need to be altered or adapted to the market For example, some electrical products are marketed through different countries on home shopping channels. The electrical requirements of each country or region need to be incorporated within the product specification of each country's offering. In addition to these changes, the promotion component is also different, simply because communication is required directly with each targeted individual. To do this, direct-response media must be used. In many cases direct-response media are a derivative of advertising, such as direct mail, magazine inserts, and television and print advertisements which use telephone numbers to encourage a direct response. However, direct response can also be incorporated within personal selling through telemarketing and sales promotions with competitions to build market knowledge and develop the database which is the key to the direct marketing. The communication mix is changing: no longer can the traditional grouping of promotional tools be assumed to be the most effective forms of communication. This approach. brief outline of the elements of the promotions mix signals some key characteristics. 10 | P a g e  Marketing communication mix Advertising Sales Public Personal Direct promotion relations selling marketing Communications Ability to deliver a personal Low Low Low High High message Ability to reach a large High Medium Medium Low Medium audience Level of interaction Low Low Low High High Credibility given by target audience Low Medium High Medium Medium Costs Absolute costs High Medium Low High Medium Cost per contact Low Medium Low High High Wastage High Medium High Low Low Size of investment High Medium Low High Medium Control Ability to target particular Medium High Low Medium High audiences Management's ability to adjust the deployment of the tool as Medium High Low Medium High circumstances change Table 1.2 a summary of the key characteristics of the tools of marketing communications. 11 | P a g e  3. Factors Influencing the Promotion Mix. A marketing manager from one company might decide to focus on social media, whereas a marketing manager from another company might decide to focus her company’s efforts on television commercials. As shows, a number of factors affect the choice of promotion mix elements. Figure 1Factors That Influence Selection of Promotion Mix  Budget Available. For many companies, the budget available to market a product determines what elements of the promotion mix are utilized. The budget affects a promotion’s reach (number of people exposed to the message) and frequency (how often people are exposed). For example, many smaller companies may lack the money to create and run commercials on top- rated television shows or during the Super Bowl. As a result, they may not get 12 | P a g e  the exposure they need to be successful. Other firms such as McDonald’s may come up with creative ways to reach different target markets.  Stage in the product life cycle. The stage in the product life cycle also affects the type and amount of promotion used. Products in the introductory stages typically need a lot more promotional dollars to create awareness in the marketplace. Consumers and businesses won’t buy a product if they do not know about it. More communication is needed in the beginning of the product life cycle to build awareness and trial.  Type of product and type of purchase decision. Different products also require different types of promotion. Very technical products and very expensive products (high involvement) often need professional selling so the customer understands how the product operates and its different features. By contrast, advertising is often relied upon to sell convenience goods and products purchased routinely (low involvement) since customers are familiar with the products and they spend relatively little time making purchase decisions.  Target market characteristics and consumers’ readiness to purchase. In order to select the best methods to reach different target markets, organizations need to know what types of media different targets use, how often they make purchases, where they make purchases, and what their readiness to purchase is as well as characteristics such as age, gender, and lifestyle. Some people are early adopters and want to try new things as soon as they are available, and other groups wait until products have been on the market for a while. Some consumers might not have the money to purchase different products, although they will need the product later. For example, are most college freshmen ready to purchase new cars? 13 | P a g e  Consumers’ preferences for various media. We’ve already explained that different types of consumers prefer different types of media. In terms of target markets, college-aged students may prefer online, cell phone, mobile marketing, and social media more than older consumers do. Media preferences have been researched extensively by academics, marketing research companies, and companies to find out how consumers want to be reached.  Regulations, competitors, and environmental factors. Regulations can affect the type of promotion used. For example, laws in the United States prohibit tobacco products from being advertised on television. In some Asian countries, controversial products such as alcohol cannot be advertised during Golden (prime) time on television. The hope is that by advertising late at night, young children do not see the advertisements. The strength of the economy can have an impact as well. In a weak economy, some organizations use more sales promotions such as coupons to get consumers into their stores. The risk is that consumers may begin to expect coupons and not want to buy items without a special promotion.  Availability of media. Organizations must also plan their promotions based on availability of media. The top-rated television shows and Super Bowl ad slots, for example, often sell out quickly. Magazines tend to have a longer lead time, so companies must plan far in advance for some magazines. By contrast, because of the number of radio stations and the nature of the medium, organizations can often place radio commercials the same day they want them to be aired. Social media and online media may be immediate, but users must be careful about what they post and their privacy. 14 | P a g e  Summary: There are five traditional elements to the promotional mix: advertising, sales promotion, public relations, direct marketing and personal selling. Each has strengths and weaknesses, and these tools are now beginning to be used in different ways to develop relationships with customers, whether they are consumers or organizational buyers. An example of these changes is the use of the Internet, a communication medium, which has grown rapidly since the mid-1990s and is threatening to reconfigure the way traditional promotional tools are used. Marketing communications have an important role to play in communicating and promoting the products and services not only to consumers but also to the business- to- business sector and other organizations that represent other stakeholders. The development of partnerships between brands and consumers and between organizations within distribution channels or networks is an important perspective of marketing communications. Review questions 1) Name the five main elements of the marketing communication mix. 2) Write a brief description of each element of the marketing communication mix. 3) How does each element compared across the following criteria: control, Effectiveness and cost. 4) How does direct marketing differ from the other elements of the mix? 15 | P a g e  GLOSSARY Ch1: Introduction to Marketing Communication Keywords Meaning Promotion is the way in a business makes its products known to marketing the customers, both current and potential. communication Promotion The way in which a business communicates (enters on a dialogue) with existing and potential customers to encourage demand. marketing The promotional mix is one of the 4 Ps of the marketing mix. It communication consists of public relations, advertising, sales promotion and (Promotion) Mix personal selling. Advertising is any kind of paid-for communication used for Advertising promotional purposes (non-personal form of mass communication) Sales promotion is the process of persuading a potential customer to buy the product using techniques such as free trials, sales promotion money-off or other incentives.( non-personal form of communication) Also known as face-to-face selling in which one person who is the salesman tries to convince the customer in buying a product. personal selling It is a promotional method by which the salesperson uses his or her skills and abilities in an attempt to make a sale. Public relations covers a broad series of activities where a business manages its relationships with different parts of the public relation public, e.g. customers, the media, local communities, suppliers, employees and investors. Direct marketing is a form of advertising where organizations communicate directly to customers through a variety of media direct marketing including cell phone text messaging, email, websites, online adverts, database marketing, catalog distribution, promotional letters and targeted television, newspaper and magazine... 16 | P a g e  Ch1: Introduction to Marketing Communication Advantages & Disadvantages of the Promotional Mix Mix Element Advantages Disadvantages  limited ability to persuade  Good for building awareness. the target audience  Effective at reaching a wide audience.  The effect on sales is hard Advertising  Repetition can help to build customer to measure. trust.  Low credibility.  high degree of control for the delivery of  cannot answer all a the message customer’s questions  Highly interactive.  Lot of communication between the buyer and seller.  High costly. Personal  Excellent for communicating complex  Not suitable if there are Selling thousands of important product information.  Relationships can be built up buyers.  Quick feedback.  Ability to get quick feedback.  Too much promotion may Sales damage the brand image.  Flexible timing Promotion  Ineffective in building  Good short term tactical tools. long-term loyalty for the destination. Public  credible: the message seems to be  Risk of losing control: Relation coming from a third party( magazine, cannot always control newspaper) what other people write or  Cheap way of reaching many customers. say about your product. Direct  Direct communication with target Marketing individual customers.  Ability of delivering personalized  High costly per contact. messages and building a relationship  Image Factors- Direct with them. marketing suffers from  Personalization- Direct marketers can poor image factors. personalize the messages & offers most effectively. 17 | P a g e  Chapter 2: Advertising The purpose of an advertising plan is to provide the means by which appropriate mess- ages are devised and delivered to target audiences who then act in appropriate ways. This may be to buy a product, to enqui.re about a product or simply memories a single aspect for future action. Guidelines for the content and delivery of messages are derived from an understanding of the variety of contexts in which the messages are to be used. For example, research might reveal a poor brand image relative to the market leader, or the different or changing media habits of target consume the nature of the messages and the problems to be addressed will be specified in the promotional objectives and strategy. Learning Objectives: The main objectives of this lesson are:  To learn the Advertising characteristics  To understand the Role and objectives of advertising  To recognize the various advantages(pros) and disadvantages(cons)of advertising as a promotional tools 18 | P a g e  1. Definition Advertising is a non-personal form of mass communication and offers a high degree of control for those responsible for the design and delivery of the advertising message. “Advertising is the non-personal communication of marketing related information to a target audience, usually paid for the advertiser, and delivered through mass media in order to reach the specific objectives of the sponsor.” (Houghton Mifflin Company, 1998). Thomas Russell and W. Roland Lane have defined advertising in the following words: “Advertising is a message paid for by an identified sponsor and delivered through some medium of mass communication. Advertising is persuasive communication. It is not neutral; it is not unbiased; it says; “I am going to sell you a product or an idea”. Advertising is the action of calling public attention to something, especially by paid announcements. Note that the definition uses the term 'action of' and doesn't specify that advertising is limited to print media, television, Internet, or any other specific medium. While it does place an emphasis on 'paid announcements,' it isn't a requirement. Finally, it only says that attention is called to something, not specifically good attention. Anyone that has turned on the TV during election season knows advertising can be negative. Advertising is an impersonal communication of messages regarding ideas, products and services from manufacturers, wholesalers and retailers (called sponsors) to a targeted group of existing and potential customers, with a view to educate and influence them to act in a manner desired by the sponsor of the message. The message may be oral or in writing, may be audio or visual or both and is paid for by the sponsor. 19 | P a g e 2. The characteristics of advertising The characteristics of advertising may be stated as follows:  Advertising is an impersonal communication of message. It involves sending messages through one or more media such as television, radio, newspapers and magazines, etc. It is called impersonal because the message is conveyed through some media rather than a person. As such advertising is one-way communication.  The message is sent by manufacturers, wholesalers and retailers who are called sponsors of the advertisement.  The sponsors send the message to a target group of people who are either the existing customers or the potential customers.  The purpose of sending the message is to inform the customers about their needs, availability of the product to satisfy those need, arouse their desire to have the product, and create demand for the product. Thus the aim of advertising is to make people act as desired by the sponsors.  The message may be sent through different media such as television, radio, newspapers and magazines. Depending on the media used it may be audio or visual, or written or oral.  The sponsors spend money to send the message. Thus advertising is not free of cost but involves some expenditure. 20 | P a g e  3. Objectives of advertising The main objectives of advertising are:  Creating demand for products: Now a days, goods are produced on a large scale in anticipation of future demand. It is therefore, important that sufficient demand is created for the product. The objective of advertising is to create demand for products and services through customer education.  Sustaining demand for products and service: Sometimes, there are a number of manufactures, who manufacture products which basically meet the same needs of the customers. In such situations, there may develop an intense competition among the manufactures to sell their products. The objective of advertising, then is to see that the demand for a firm’s product does not decline and is maintained at the existing level.  Creating and enhancing goodwill of the firm: Through advertising, a firm highlights the importance it attaches to consumer satisfaction and good of the society. Achievements of the firm in these matters are also highlighted. This helps in creating a good image of the business in the minds of consumers, workers, investors, suppliers’ government and other groups of people in society. Thus business goodwill is created and enhanced.  Establishing and enhancing brand image: A number of products are sold by their brand name. Washing powder is sold under the brand name of Surf, tooth paste is sold under the name of Close up. One of the objectives of advertising is to popularize the brand name of the product so that its brand image is established and enhanced.  Helping salesmen: Advertising aims at helping salesmen in selling goods and services. 21 | P a g e  4. Pros and Cons of Advertising Advertising is a means of creating awareness and promoting a product or service in the market. It is a paid form of communication to inform the public about an idea, good or service. Advertising is a market communication intended to influence people’s actions and persuading them to buy or try the product. Advertising Advantages Disadvantages  Good for building awareness.  limited ability to persuade the target  Effective at reaching a wide audience. audience  Repetition can help to build customer  The effect on sales is hard to measure. trust.  Low credibility.  high degree of control for the delivery  cannot answer all a customer’s of the message questions 22 | P a g e  Chapter 3: Sales promotion One of the main tasks of advertising is to develop awareness in the target audience. The main task of sales promotion is to encourage the target audience to behave in a particular way, usually to buy a product. These two tools set out to accomplish tasks at each end of the attitudinal spectrum: the cognitive and the conative elements. Sales promotion seeks to offer buyers additional value, as an inducement to generate an immediate sale. These inducements can be targeted at consumers, distributors’ agents and members of the sales force. A whole range of network members can benefit from the use of sales promotion. This promotional tool is traditionally referred to as below-the-line expenditure, because, unlike advertising, there are no commission payments from media owners with this form of communication. There are many sales promotion techniques, but they all offer a direct inducement or an incentive to encourage receivers of the promotional messages to buy a product rather than later. Learning Objectives: The main objectives of this lesson are:  To understand Sales plan and how it work  To learn Sales promotion techniques. - Sales promotions: manufacturers to resellers. - Sales promotions: resellers to consumers. - Sales promotions: manufacturers to consumers. - Sales promotions: the sales force 23 | P a g e  1. Definition Sales promotion is the process of persuading a potential customer to buy the product. Sales promotion is designed to be used as a short-term tactic to boost sales – it is rarely suitable as a method of building long-term customer loyalty. Some sales promotions are aimed at consumers. Sales promotion refers to ‘those marketing activities that stimulate consumer shows and expositions. In the words of Roger A. Strong, “Sales promotion includes all forms of sponsored communication apart from activities associated with personal selling. It, thus includes trade shows and exhibits, combining, sampling, premiums, trade, allowances, sales and dealer incentives, set of packs, consumer education and demonstration activities, rebates, bonus, packs, point of purchase material and direct mail.” Sales promotion is a vital bridge or a connecting link between personal selling and advertising. 24 | P a g e  2. Reasons(objectives) for the use of sales promotion Sales promotion consists of all activities other than advertising and personal selling that help to increase sales of a particular commodity. There are some other objectives of sales promotion. The objectives are:  To introduce new products: Have you ever heard about distribution of free samples? Perhaps you know that many companies distribute free samples while introducing new products. The consumers after using these free samples may develop a taste for it and buy the products later for consumption.  To attract new customers and retain the existing ones: Sales promotion measures help to attract or create new customers for the products. While moving in the market, customers are generally attracted towards the product that offers discount, gift, and prize on buying. These are some of the tools used to encourage the customers to buy the goods. Thus, it helps to retain the existing customers, and at the same time it also attracts some new customers to buy the product.  To maintain sales of seasonal products: There are some products like air conditioner, fan, refrigerator, cooler, winter clothes, room heater, sunscreen lotion, glycerin soap etc., which are used only in particular seasons. To maintain the sale of these types of products normally the manufacturers and dealers give off-season discount. For example, you can buy air conditioner in winter at a reduced price or get discount on winter clothes during summer.  To meet the challenge of competition: Today’s business faces competition all the time. New products frequently come to the market and at the same time improvement also takes place. So sales promotion measures have become essential to retain the market share of the seller or producer in the product- market. 25 | P a g e  3. Importance of Sales Promotion The business world today is a world of competition. A business cannot survive if its products do not sell in the market. Thus, all marketing activities are undertaken to increase sales. So incentives need to be offered to attract customers to buy the product. Thus, sales promotion is important to increase the sale of any product. Let us discuss the importance of sales promotion from the point of view of manufacturers and consumers. From the point of view of manufacturers: Sales promotion is important for manufacturers because  It helps to increase sales in a competitive market and thus, increases profits.  It helps to introduce new products in the market by drawing the attention of potential customers.  When a new product is introduced or there is a change of fashion or taste of consumers, existing stocks can be quickly disposed-off.  It stabilizes sales volume by keeping its customers with them. In the age of competition it is quite much possible that a customer may change his/her mind and try other brands. Various incentives under sales promotion schemes help to retain the customers. From the point of view of consumers: Sales promotion is important for consumers because  The consumer gets the product at a cheaper rate.  it gives financial benefit to the customers by way of providing prizes and sending them to visit different places;  The consumer gets all information about the quality, features and uses of different products. 26 | P a g e  Certain schemes like money back offer creates confidence in the mind of customers about the quality of goods.  It helps to raise the standard of living of people. By exchanging their old items they can use latest items available in the market. Use of such goods improves their image in society. 27 | P a g e  4. Sales promotion activities Some of the major kinds of sales promotion are as follows: Consumer sales promotion, Dealer sales promotion, Sales force promotion and business promotion. I. Consumer Sales Promotion: Activities aimed at reaching the consumer at his home or in his office may be called consumer sales promotion. It is aimed to inform or educate the consumers and to stimulate the consumers. Success in sales depends on consumers’ co-operation. Consumer sales promotion increases the use of product by the consumers, attracts new customers and stands straight among the competitors, to introduce new products and to promote established products. II. Dealer Sales Promotion: The other name for dealer promotion is trade promotion. Manufacturers use a number of techniques to secure the co- operation of wholesalers, retailers or the middlemen. These activities, which increase the interest and enthusiasm of dealers and distributors, are called dealer or distributor sales promotion. It is the middlemen who are important persons for the fast movements of products. Hence this must be offered with some incentive. III. Sales Force Promotion: As dealer and consumer promotion, the sales force promotion also is a necessary one. The activities of sales force must be induced. In the channel of distribution the role of salesman is very important. The idea of sales force promotion is to make the salesman’s effort more effective. 28 | P a g e  5. Trade promotions: manufacturers to resellers Manufacturers and retailers see sales promotions as important devices to encourage trials among non-users and stimulate repeat purchase among users. Retailers prefer in- store promotions (push) instead of promotions aimed at consumers (pull) strategies. This has implications for the promotional mixes deployed by manufacturers. a) Objectives of trade promotion For manufacturers launching new products, the main marketing objective is to establish distribution. This is because· the use of awareness advertising at the launch of a new product is pointless unless the product is available for consumers to purchase at retail outlets. Therefore, a distribution network needs to be set up in anticipation of consumer demand. The task of marketing communications is to encourage resellers to distribute a new product and to establish trial behavior. Sales of established products need to be maintained and encouraged. The active support and participation of resellers is crucial. One of the main objectives of manufacturers is to develop greater exposure for their products; this means motivating distributors to allocate increased shelf space to a product thereby (possibly) reducing the amount of shelf space allocated to competitors. The task of marketing communications, therefore, is to encourage resellers to buy and display increased amounts of the manufacturer's products and establish greater usage. The usage objective aims to increase levels of store loyalty and the overall number of visits made by current customer 29 | P a g e It is an interesting point that the trial objective for retailers is to increase the number of new customers visiting a store. The usage objective aims to increase levels of store loyalty and the overall number of visits made by current customers. In the same way that manufacturers seek to establish brand loyalty, so retailers seek to build store loyalty Resellers (in particular, retailers) and manufacturers have conflicting objectives. Manufacturers want to increase the amount of shelf space and attention paid to their products, whereas resellers want to increase the numbers of people using the store; they want to develop store traffic. The main type of sales promotion used to motivate trade customers is an allowance b) Methods or tools The main type of sales promotion used to motivate trade customers is an allowance. Allowances can take many forms, some of the more common ones being buying, count and recount, buy-back allowances, merchandising and promotional allowances. Trade allowances are a means of achieving a short-term increase in sales. They can be used defensively to protect valuable shelf space from aggressive competitors. By offering to work with resellers and providing them with extra incentives, manufacturers can guard territory gained to date. 30 | P a g e 1. Buying allowances The most common form of discount is the buying allowance. In return for specific orders between certain dates, a reseller will be entitled to a refund or allowance of x% off the regular case or carton price. The only factor that the reseller must consider is the timing of the order. Manufacturers often use these sales promotions so that they coincide with a main buying period, reducing risk to the distributor. For the manufacturer, these types of allowances can lead to an increase in the average, size of orders, which in turn can utilize idle capacity and also prevent competitors securing business at their expense. Tills technique can also be used to encourage new stores to try the manufacturer's products or to stimulate repeat usage (restocking). 2. Count and recount allowances Manufacturers may require resellers to clear old stock before a new or modified product is introduced. One way this can be achieved is to encourage resellers to move stock out of storage and into the store. The count and recount method provides an allowance for each case shifted into the store during a specified period of time.The arithmetic for this transaction is as follows: Opening stock + purchases - closing stock = stock entitled to receive the agreed allowance 3. Buy-back allowances Buy-backs can be used to follow up count and recount promotions. Under this scheme, the purchases made after the count and recount scheme (up to a maximum of the count and recount) are entitled to an allowance to encourage stores to replenish their stocks (with the manufacturer's product and not that of a competitor). 31 | P a g e 4. Merchandise allowances The previous three methods require the exchange of money, in the form of either a credit or a cash refund. Merchandising allowances benefit resellers by providing extra goods for which no payment is required. These free goods are only delivered if are seller's order reaches a specific size. The benefit to the manufacturer is that the administrative and transportation costs for the allowance are very low and are tied to those associated with the costs of the regular order. For resellers, the incentive is that they can earn above average profits with the free units. Manufacturers use this type of allowance to generate trials and to open up new distributors. However, this sales promotions technique needs the support of other activities, such as advertising, to provide security and confidence before potential resellers commit themselves to a new product. 5. Advertising allowances Advertising allowances can be made if resellers can show that they have undertaken a promotional campaign featuring a manufacturer's product. A percentage allowance is given against a reseller's purchases during a specified period of time. This is a useful technique in stimulating trial by new stores. By weighting the allowances, resellers can be encouraged to take stock and create shelf space for new products. Dealer listings are advertisements and notices that identify resellers and the range of products that each carries. Issued by manufacturers to help consumers locate their nearest store, they are effective in generating store traffic and for providing source credibility. 32 | P a g e  6. Consumers Sales promotions: manufacturers to consumers a. Objectives Manufacturers use sales promotions to communicate with consumers because they can be a cost-effective means of achieving short-term increases in sales. The objectives are to stimulate trial use by new users or to increase product usage among those customers who buy the product on an occasional or regular basis. The success of any new offering is partly dependent on the number of consumers encouraged to try the product in the first place and partly upon the number who repurchase the product at a later point in the purchase cycle. The importance of stimulating trial use cannot be underestimated. Through the use of coupons, sampling and other techniques sales promotions have become an important element in the new product launch and introduction processes b. Methods for encouraging new users to try a product There are three main approaches to encourage new customers to try a product for the first time: sampling, coupons and a range of consumer deals. 1. Sampling When a product is introduced, whether it be a new product category or an improved or modified product, sampling is one of the most effective sales promotion techniques available. It makes sense, therefore, to provide a risk-free opportunity or consumers to test a product. Samples are very often free miniature versions of the actual product and can be used to win new customers and to protect a customer base. Samples can take the form of demonstrations, trial size packs that have to be purchased or free use for a certain period of time. The recent offers by car manufacturers to allow 33 | P a g e purchasers to return their cars after a four-week period if not satisfied provide a good example of a high-involvement decision where attitudes are formed prior to trial and are used to confirm a purchase decision. The use of scented page folds in women's magazines to demonstrate new scents and perfumes is an innovative and interesting example of making trial easier. Previously, the only method of testing perfume was through the use of samplers, avail- able on the counters in cosmetic departments of retail outlets. Marketing communications and sales promotions in particular were aimed at enticing people to the store. Using scent folds means that it is easier for consumers to try a perfume. A far greater number of people can try a new scent, while the reader's attention can be focused on the accompanying advertisement. Readership and recall scores increase remarkably. 2. Coupons Coupons are a proven method by which manufacturers can communicate with consumers and are a strong brand-switching device. They may be distributed via resellers or directly to consumers. Coupons are vouchers or certificates which entitle consumers to a price reduction on a particular product. The value of the reduction or discount is set and the coupon must be presented when purchasing the product. The objective therefore, is to offer a price deal, a discount off the full price of the product. Retailers and wholesalers act as agents for manufacturers by allowing consumer to redeem the value of coupons from them at the point of purchase. They in turn recover the cost of the deal, the value of the coupon, from the manufacturer. Coupons provide precision targeting of price-sensitive customers, without harming those regular customers who are prepared to pay full price. 34 | P a g e  3. Consumer deals These forms of sales promotion are only effective in the short term. They are not used to build consumer franchises or brand personalities. Their function is to bring about a short-term increase in sales by moving the product from the shelves of the reseller to the homes of consumers. They can encourage trial behavior by new users and also stimulate repurchase by existing users. The techniques are as follows.  Price-offs By far the simplest technique is to offer a direct reduction in the purchase price with the offer clearly labelled on the package or point of purchase display. These are simply referred to as 'price-offs'. A minimum reduction of 15% appears to be required for optimal effect (Della Bitta and Monroe, 1980). Others suggest that this figure variese production and distribution costs must also be accounted. Research indicates that consumers are sceptical of price deals, in particular those concerning price-of.  Bonus packs Bonus packs offer more product for the regular pack price. They provide direct impact at the point of purchase, and this, combined with the lure of lower unit costs and extra value, means that this is a popular technique with consumers and manufacturers.  Refunds and rebates Refunds and rebates are used to invite consumers to send in a proof of purchase and in return receive a cash refund. These are very effective in encouraging the trial of new products and have proved exceptionally popular with consumer durables (rebate) as well as fast-moving consumer goods (FMCG) (refunds). 35 | P a g e  7. Sales force promotions: the sales force Just as consumers and resellers benefit from the motivation provided by sales promotions, so members of the sales force can benefit too. To stimulate performance, sales promotions can be directed at the sales force of either the manufacturer or the reseller. Incentives such as contests and sales meetings are two of the most used motivators. a. Contests Contests have been used a great deal, and if organized and planned properly can be very effective in raising the performance outcomes of sales teams. By appealing to their competitive nature, contests can bring about effective new product introductions, revive falling sales, offset a rival's competitive moves and build a strong customer base. To do this, contests must be fair, so that participants have a roughly equal chance of being successful, and the winners should not be those who have high- density and high-potential territories. A further consideration is the duration of the contest: too short and the full effects may not be realized; make it too long and interest and support for the incentive may wane. b. Sales meetings Sales meetings provide an opportunity for management to provide fresh information to the sales force about performance, stock positions, competitor activities, price deals, consumer or reseller promotions, and new products. Sales training exercises can be introduced and short product training sessions can often be included. These formal agenda items are supplemented by the informal ones of peer reassurance and competitive stimulus, as well as information exchange and market analysis. Meetings can be held annually, quarterly, monthly or at local level on a weekly basis. 36 | P a g e  Review questions 1. What are the purposes of using sales promotion? 2. Explain the objectives that manufacturers might have when encouraging resellers to take more products. 3. Explain the various benefits of sales promotion to buyers and sellers. 4. List the main sales promotion methods used by manufacturers and targeted at consumers. 5. Mention the various types of allowance can be used by a manufacturer. 6. Collect four examples of sampling and determine whether you feel they were effective in achieving their objectives. 37 | P a g e This form of marketing communication involves a face-to-face dialogue between two persons or by one person and a group. Message flexibility is an important attribute, as is the immediate feedback that often flows from use of this promotional tool. The traditional image of personal selling is one that embraces the hard sell, with a brash and persistent salesperson delivering a volley of unrelenting persuasive messages at a confused and reluctant consumer. Fortunately, this image is receding quickly as the professionalism and breadth of personal selling become more widely recognized and as the role of personal selling becomes even more important in the communication mix. Learning Objectives The main objectives of this lesson are:  To learn the meaning, characteristics and objectives of Personal selling.  To examine the role of personal selling  To understand the Strengths and weaknesses of personal selling  To familiarize with the various Tasks performed by a salesperson. 38 | P a g e  1. Definition of Personal Selling Personal Selling is defined as the demonstration of products and services to the potential customers and convincing them to purchase it. Also known as Salesmanship. It is a two-way process, where both buyer and seller derives benefit. It is a face to face interaction between the prospective customer and the sales representative whereby the salesman displays the goods to the customer, describe its features and utility, demonstrates it’s functioning, answers the customer’s questions, tells the price and discount available and persuades them to buy it. With the help of this tool, the message can be conveyed to every customer separately, and immediate response is available from them. Personal selling is different from other forms of communication in that the trans- mitted messages represent is a dynamic communications. 2. Characteristics of personal selling. The following are the major characteristics of personal selling - Personal Selling is an element of promotional mix, where salesman visits the customer and displays the goods to initiate the purchase. - It involves face to face interaction between prospective buyer and the company representative. - In personal selling the market size is small, and that is why there are few customers only. - Personal Selling is an expensive tool. - Personal Selling is used when the product value is high, and it is difficult to understand (high technical and complex product). - The effect of personal selling can be seen in the long run when there is an increase in sales. 39 | P a g e  3. Objectives of personal selling. Personal selling is used to meet the five objectives of promotion in the following ways:  Building Product Awareness – A common task of salespeople, especially when selling in business markets, is to educate customers on new product offerings. In fact, salespeople serve a major role at industry trades shows where they discuss products with show attendees.  Creating Interest – The fact that personal selling involves person-to-person communication makes it a natural method for getting customers to experience a product for the first time. In fact, creating interest goes hand-in- hand with building product awareness as sales professionals can often accomplish both objectives during the first encounter with a customer.  Providing Information – When salespeople engage customers a large part of the conversation focuses on product information. Marketing organizations provide their sales staff with large amounts of sales support(brochures, research reports, computer programs)  Stimulating Demand – By far, the most important objective of personal selling is to convince customers to make a purchase. In The Selling Process tutorial we will see how salespeople accomplish this when we offer detailed coverage of the selling process used to gain customer orders.  Reinforcing the Brand – Most personal selling is intended to build long-term relationships with customers. A strong relationship can only be built over time and requires regular communication with a customer. Meeting with customers on a regular basis allows salespeople to repeatedly discuss their company’s products and by doing so helps strengthen customers’ knowledge of what the company has to offer. 40 | P a g e  4. Strengths and weaknesses of personal selling There are a number of strengths and weaknesses associated with personal selling. a. Strengths of personal selling Dyadic communications allow for two-way interaction, which, unlike the other promotional tools, provides for fast, direct feedback. In comparison with the mass media, personal selling allows for the receiver to focus attention on the salesperson, with a reduced likelihood of distraction or noise. There is a greater level of participation in the decision process by the seller than in the other tools. When this is combined with the power to tailor messages in response to the feedback provided by the buyer, the sales process has a huge potential to solve customer problems. - Highly interactive: Lot of communication between the buyer and seller. - Excellent for communicating complex product information. - Quick feedback. - Relationships can be built up. b. Weaknesses of personal selling One of the major disadvantages of personal selling is the cost and this amount is related to the costs spender on finding prospects and customers. Reach and frequency through personal selling are always going to be low, regardless of the amount of funds available. Control over message delivery is very often low, and, while the flexibility is an advantage. There is also the disadvantage of message inconsistency. This in turn can lead to confusion (a misunderstanding perhaps with regard to a product specification). - High costly. - Not suitable if there are thousands of important buyers. 41 | P a g e  5. Types of salesperson The tasks of sales person vary from organization and in accord the type of selling activities on which they focus. They collect and bring into the organization orders from customers wishing to purchase the offering. In this sense the order aspect of the personal selling tool can be seen as one of four order-related tasks: 1. Order takers are salespersons to whom customers are drawn at the place of supply Reception clerks at hotels and ticket desk personnel at theatres and cinemas typify this role. 2. Order getters are sales personnel who operate away from the organization and who attempt to gain orders largely through the use of demonstration and persuasion. 3. Order collectors are those who attempt to gather orders over the telephone. Time is saved by both the buyer and the seller using the telephone to gather repeat and low-value orders frees valuable sales personnel to seek new customers and build relationships with current customers. 4. Order supporters are all those people who are secondary salespersons in that they are involved with the order once it has been secured, or are involved with the act of ordering, usually by supplying information. Order processing or financial advice services typify this role. 42 | P a g e  6. Tasks (Duties) of salesperson The duties and responsibilities of a salesman differ from one business to another depending upon the nature of the business, the size of the business, the type of selling job, the sales policies of the concern, etc. However, there are certain duties and responsibilities which are common to all types of business. The fundamental duty of a salesman is selling. This duty includes meeting the prospects, presenting and demonstrating the products, inducing the prospects to buy, taking orders and effecting sales. - A salesman should guide the buyers in buying the goods they want. - A salesman may, sometimes, be required to collect information about the credit-worthiness of the customers. In such a case, he has to collect detailed information and submit it to his firm in time. Salesmen establish direct relations with middlemen — distributors, wholesalers, etc., and collect market information and pass it on to their firm. - A salesman, i.e., a counter salesman, has to arrange for the packing of the goods sold and the delivery of the packages to the buyers. - Every salesman has to build up satisfied clientele (i.e., customers) for his employer and thereby promote the goodwill of his firm. - A salesman should attend to the complaints of the customers immediately and try to settle their grievances quickly and sincerely. - A salesman, especially a traveling salesman, is required to send daily, weekly or monthly reports to his firm, providing information about the calls made, sales effected, services rendered, route schedule, expenses incurred, business conditions, competition, if any, etc. 43 | P a g e  - A salesman, i.e., a traveling salesman, is required to organize his tour program. He has to prepare the route and time schedules for his tour so as to systematize his sales efforts. Prospecting Finding new customers Communicating Inform various stakeholders and feedback information about the market Selling The art of leading a prospect to a successful close Information gathering Reporting information about the market and reporting on individual activities Servicing Consulting, arranging, counseling, fixing and solving Consumer problems Allocating Placing scarce products and resources at times of shortage Shaping Building and sustaining relationships with major customers 44 | P a g e  7. The Seven Steps of the Personal Selling Process The personal selling process involves seven steps that a salesperson must go through with most sales. Understanding these seven steps can help improve your individual sales or the sales of your company. - The first step in the process involves prospecting. With this step in the process, sales representatives look for new customers that they can potentially sell their products to. This can be done by cold calling or by going out into the market and talking to people. This part of the process is a numbers game, and the sales representative has to contact many people. - The pre-approach is the second step in the personal selling process. At this time, the sales representative prepares for the first contact with the potential customer. During this stage, the sales representative looks at any information that he may have about the customer. He may practice his sales presentation and do anything necessary to prepare for it. - The approach is the next step in the process and it is also one of the most important. During this step, the sales representative takes a minute or two to try to get to know the prospect. This phase usually involves some small talk to warm up the prospect and help them open up. - During this stage of the process, the sales representative makes a presentation. This can involve demonstrating the product or service and showing the customer why they need it. The sales rep should focus on the features and benefits of the product or service during this part of the process. - In some cases, the sales representative will have to overcome objections by the customer. Many customers have questions and concerns at this point of the sales process. If the sales representative can answer the 45 | P a g e  questions and overcome any objections successfully, the barriers for a successful sale will be removed. - After the objections have been removed, the only thing left to do is close the sale. This can involve writing up an invoice and providing any final information to the customer. At this stage of the process, you may need to negotiate the final sales price and any payment terms. - The follow up is the last stage in the personal sales process. After the product or service has been delivered, the sales representative follows up with the customer to find out if they are pleased. If there were any issues with the product, the sales rep can work with the customer to get them resolved. If the customer is happy, the sales rep can also try to obtain additional referrals from the customer. Seven-Step Selling Process Adapted from Michael R. Solomon 46 | P a g e  Difference between Personal Selling and Sales Promotion Basis for Personal selling Sales promotion customer Personal Selling is a marketing Sales Promotion is a range of non- tool in which the sales person personal marketing activities that Meaning presents the goods to the are carried on to initiate sales of customers and instigates them product and service. to purchase it. Consequence Long term increase in sales Short term increase in sales Cost involved High Comparatively less Communication Face to face Indirect Customers Few Many Incentive Not always present Always present schemes and offers Nature of Customized and technically Standardized and easy to product complex understand Method used for High value Low value which kind of product 47 | P a g e  GLOSSARY Chapter 4: Personal Selling as a Marketing Communication mix Keywords Meaning Also known as face-to-face selling in which one person who is the salesman tries to convince the customer in personal selling buying a product. It is a promotional method by which the salesperson uses his or her skills and abilities in an attempt to make a sale. Order takers Salespersons to whom customers are drawn at the place of supply. Salesperson who operate away from the organization and Order getters who attempt to gain orders largely through the use of demonstration and persuasion. Order collectors Salespersons who attempt to gather orders over the telephone. Order supporters Salespersons involved with the act of ordering, usually by supplying information. Prospecting is the first step in the sales process, which consists of identifying potential customers. The goal of Prospecting prospecting is to develop a database of likely customers and then systematically communicate with them in the hopes of converting them from potential customer to current customer. Salesmen establish direct relations with middlemen — Communicating distributors, wholesalers, etc., and collect market information and pass it on to their firm. Selling The art of leading a prospect to a successful close Information gathering Reporting information about the market and reporting on individual activities Servicing Consulting, arranging, counseling, fixing and solving Consumer problems Allocating Placing scarce products and resources at times of shortage Shaping Building and sustaining relationships with major customers Order takers Salespersons to whom customers are drawn at the place of supply. 48 | P a g e  Summary The role of personal selling in the promotional mix is changing. As organizations move to more relational exchanges, so the sales force will need to play a complementary role. This role will necessitate the execution of tasks such as managing customers and integrating the activities of the performance network. The sales force will need to be deployed in a way that optimizes the resources of the organization and realizes the greatest possible percentage of the available sales and profit potential that exists in the defined area of operation. This will result in a continuance of the growth of key accounts. The use of the field sales force as the only means of personal selling is unlikely to remain. Technological advances and the need for increasing levels of promotional effectiveness and accountability, together with tighter cost constraints, indicate that the more progressive organization’s will employ multiple sales channels. This may mean the use of telemarketing and direct mail to free the sales force from non-selling activities, which will allow management to focus the time of the sales force upon get- ting in front of customers and prospects, with a view to using their particular selling skills. Review questions 1. What are the different types of personal selling? 2. Describe the role of personal selling and highlight its main strengths and weaknesses. 3. Which factors need to be considered when determining the significance of personal selling in the promotional mix? 4. What are the tasks that salespersons are normally expected to accomplish? 5. Describe two ways in which the personal selling process is thought to work. 49 | P a g e Direct marketing consists of any marketing that relies on direct communication or distribution to individual consumers, rather than through a third party such as mass media. Mail, email, social media, and texting campaigns are among the delivery systems used. It is called direct marketing because it generally eliminates the middleman, such as advertising media. The development and use of direct marketing principles by a variety of organizations are testimony to the power of this personal form of communication. Learning Objectives The main objectives of this lesson are:  To understand the meaning characteristics and importance of direct marketing as a marketing communication tools.  To describe the various benefits of direct marketing.  To explain the main direct response media can be used by a marketer. 50 | P a g e  1. Definition of Direct Marketing Direct Marketing, therefore, is a term used to refer to all media activities that generate a series of communications and responses with an existing or potential customer. Early on there was considerable debate about the term 'direct marketing' itself. It was often referred to as direct mail or as 'curriculum marketing, dialogue marketing, personal marketing and database marketing' (Bird, 1989). This proliferation of terms reflects the range of activities that are undertaken in an attempt to prompt a response from a customer. According to American Marketing Association (1995), "direct marketing involves the use of mail, telephone, fax, e-mail, or Internet to communicate directly with or solicit a direct response from specific customers and prospects." According to the Direct Marketing Association (1990), "Direct marketing is an interactive marketing system that uses one or more advertising media to affect a measurable response and/or transaction at any location." In direct marketing, organizations communicate directly with their target customers to generate a response or a transaction. It involves the use of a variety of activities, including database management, online marketing, mobile marketing, telemarketing and direct selling through mail. Direct Marketing is a strategy used to create and sustain a personal and intermediary-free dialogue with customers, potential customers and other significant stakeholders. This should be a measurable activity and it is very often media based. This highly targeted and personalized approach can help grow a business in a cost-effective way. Direct Marketing is a strategy used to create and sustain a personal and intermediary-free dialogue with customers, potential customers 51 | P a g e and other significant stakeholders.  2. Features(characteristics) of Direct Marketing As a promotional element, direct marketing present the following characteristics: - Personal messages: generally the direct mail messages which are designed for a specific audience are addressed personally to the person concerned and have a bit of personnel touch to them. - Customized: most of the direct marketing messages are delivered directly to the concerned person and a direct response is sought from them. - Interactive and instant feedback: direct marketing turns out to be a highly interactive medium, especially in telemarketing with the help of the toll-free number and Internet where customers log on to the websites, they can call or ask for additional information besides the one being delivered directly from the manufacturer. Customers can also provide their feedback immediately to the company. - Secrecy is maintained: direct marketing tools provide the manufacturers an exclusive advantage of keeping their advertising campaign secret from the competitors which gives the manufacturer a competitive advantage. - Economical pricing: direct marketing also provides the advantage of economical pricing to the customers as the manufacturer in this case can do away with the middleman so the middleman's commission is saved and the cost saving is passed on to the customers in the form of reduced prices. - Personalized sales promotion incentives: in addition to advertising on the web, marketers offer sales promotion incentives such as coupons, contests, and sweepstakes online. - Up-to-date: direct marketing messages are designed frequently and are sent at short intervals, so as and when there is a change in the product, a new feature is added, or a new scheme is introduced, it is brought to the notice of the target audience with revised messages. 52 | P a g e  3. Benefits of Direct Marketing Direct marketing benefits both customers and marketers in many ways. Some of the important ones to the customers are listed as under: - Shopping through direct marketing is a very convenient and trouble- free experience for customers. - It saves time and introduces customers to a larger selection of merchandise. - Consumers can do comparative shopping by browsing through mail catalogues and online shopping services. - Direct marketing saves the botheration (noise) of travelling long distances, traffic problems and parking hassles. Marketers also benefit from direct marketing: - Direct marketing can give marketers a personal touch to their communication for their prospective customers. - Direct marketers can build a continuous relationship with each customer and can get constant feedback from them. - Direct marketing can also give the advantage of reaching prospects at the right time. - It permits the testing of alternative media and messages in search of the most cost effective approach. - It can help marketers in measuring responses to their campaigns to decide as to which one has been the most profitable. - It actively seeks to remove channel intermediaries, reduce costs and improve the quality and speed of services for customers: strategy less visible to competitors 53 | P a g e  4. The Advantages and Disadvantages of Direct Marketing - Unlike mass advertising, which is presented to everyone, direct marketing is presented only to people who are suspected to have an interest or need in your company’s product, based on information gathered about them. - While some marketing techniques aim to increase awareness or to educate markets about a company’s products or services, direct marketing’s sole goal is to persuade the recipient to take action. - Direct marketing is one of the most popular and effective marketing tools in order to establish a direct connection with a target audience. - Direct marketing has its appeal, particularly to companies on a shoestring budget who can't afford to pay for television or internet advertising campaigns. Especially as the world becomes increasingly connected through digital platforms, social media becomes an effective way to market to customers. - By its nature, the effectiveness of a direct marketing campaign is easier to measure than other types of advertising, since brands can analyze their own analytics, track unique source codes, and tweak strategies effectively without going through a middleman. The company can measure its success by how many consumers make the call, return the card, use the coupon, or click on the link. - The main drawback with direct marketing, however, is the profile-raising and image building that comes with a third party accrediting your brand. For example, although a company may pay for a sponsored article in The New York Times, this can greatly enhance a brand's image and can help "seal the deal" with customers who are willing to trust a supposedly unbiased source or external opinion. 54 | P a g e  5. The main types(forms) of Direct Marketing The choice of media for direct marketing can be very different from those selected for general advertising purposes. The main reason for using direct- response media is that direct contact is made with prospects and customers in order that a direct response is solicited and a dialogue stimulated or maintained. In reality, a wide variety of media can be used, simply by attaching a telephone number or response card. The main types can be: - Email Marketing: Sending promotions, newsletters, and other messages to a list of contacts via email. - Mobile Marketing: Reaching consumers through SMS text messages, mobile apps, and other mobile technologies. - Social Media Marketing: Using social media platforms such as Twitter, Facebook, and Instagram to promote products and services. - Direct Mail: Sending promotional materials directly to consumers via post. 55 | P a g e  Summary - Direct marketing is a relatively new approach which, through the use of direct- response media and database support, permits the generation and feedback of messages with individual customers. - Direct marketing is an interactive marketing system that uses one or more advertising media to affect a measurable response from the target audience. - Consumers can do comparative shopping through direct marketing by browsing through mail catalogues and online shopping services. It saves their time and introduces them to a larger selection of merchandise. - Marketers also benefit from direct marketing as they can personalize and customize their messages for their prospective customers. It can help them build a continuous relationship with each customer. - There are various tools of direct marketing, such as, e-mails, E-books, e- mail newsletters, database, viral marketing and mobile phone. - The overarching objectives are to build and sustain a mutually rewarding relationship with each customer, reduce remedial costs and improve effectiveness and measurement. - The use of direct marketing has grown considerably in the 1990s and will undoubtedly continue to grow during the first decade of the next century. For some organizations their whole marketing approach has been built around the direct concept (e.g. financial services), whereas for others the approach needs to be used to complement their use of the other tools in the promotional mix. 56 | P a g e  Chapter 6: Public Relation Public relations are a management activity that attempts to shape the attitudes and opinions held by an organization's stakeholders. Through dialogue with these stakeholders the organization may adjust its own position and/or strategy. The shift in the degree of importance given by organizations to public relations over recent years is a testimony to its power and effectiveness. An increasing number of organizations are now recognizing that the role that public relations can play in the external and internal communications of organizations is a tool for use by all organizations, regardless of the sector in which they operate. Therefore, all organizations in the public, hybrid, not-for-profit and private sectors can use this tool to raise visibility, interest and goodwill. Traditionally, public relations has been a tool which dealt with the manner and style with which an organization interacted with its major 'publics'. It sought to influence other organizations and individuals by public relations, projecting an identity that would affect the image that different publics held of the organization. By spreading information and improving the levels of knowledge that people held about particular issues, the organization sought ways to advance itself in the eyes of those it saw as influential. Learning Objectives The main objectives of this lesson are:  To Definition Public relation  To formalize the characteristics of public relation  To understand the Objectivity of public relation  To learn the Public relation methods and techniques 57 | P a g e  1. Definition the definition of public relations provided by the Institute of Public Relations: 'Public Relations practice is the planned and sustained effort to establish and maintain goodwill and mutual understanding between an organization and its publics'. Another definition has been provided by delegates attending a world convention of public relations associations in 1978, entitled the Mexican Statement: 'Public Relations is the art and social science of analyzing trends, predicting their consequences, counseling organizations’ leadership and implementing planned programmers of action which will serve both the organization’s and the public interest' (Public Relations Educational Trust, 1991). A more recent and practitioner- orientated definition from Bruning and Ledingham (2000) is that public relation is the management of relationships between organizations and its stakeholders (publics). The main issues expressed by both these definitions are that PR is concerned with the development and communication of corporate and competitive strategies. Public relations provides visibility for an organization, and this in turn, it is hoped, allows it to be properly identified, positioned and understood by all of its stakeholders. What these definitions do not emphasize or make apparent is that public relations should also be used by management as a means of understanding issues from a stakeholder. Public relations are a management activity that attempts to shape the attitudes and opinions held by an organization’s stakeholders.. 58 | P a g e  2. Characteristics of public relations Public relations present a number of characteristics that single out this particular tool from the others in the promotional mix. - Public relations does not require the purchase of airtime or space in media vehicles, such as television or magazines. - The decision on whether an organization’s public relations messages are transmitted or not rest with those charged with managing the media resource, not the message sponsor. Those that are selected are perceived to be endorsements or the views of parties other than management. The outcome is that these messages usually carry greater perceived credibility than those messages transmitted through paid media, such as advertising - The degree of trust and confidence generated by public relations helps in reducing buyers' perceived risk. However, while credibility may be high, the amount of control that management is able to bring to the transmission of the public relations message is very low. - The costs associated with public relations are minimal. The relative costs (the costs associated with reaching members of the target audiences) are also very low. Many small organizations could develop and shape their visibility in a relatively inexpensive way. - A further characteristic of this tool is that it can be used to reach specific audiences, in a way that paid media cannot. The main characteristics of public relations are that it represents a very cost- -J effective means of carrying messages with a high degree of credibility. However the degree of control that management is able to exert over the transmission of messages can be limited. 59 | P a g e This tool can be used to reach specific audiences, in a way that paid media cannot. 3. Publics or stakeholders of public relation Stakeholder groups are not static and new groups can emerge in response to changes in the environment. The main core groups tend to be the following: - Employees: The employees of an organization have already been established as major stakeholders. In an internal context, employees represent a major source of word-of-mouth communications. It has long been established that employees need to be motivated, involved and stimulated to perform their tasks at a high level. - Shareholders: Shareholders require regular information to maintain their continued confidence in the organization and to prevent them changing their portfolios and reducing the value of the organization. - Suppliers: Suppliers need to be informed of the strategies being pursued by the focus organization, if they are to be able to provide continuity and a quality service. - Financial groups: In addition to the shareholders, there are those individuals who are either potential shareholders or those who advise shareholders and investors. These represent the wider financial community but who nevertheless have a very strong influence on the stature, strength and value that an organization has. - Media: The relationships that organizations develop with the media are extremely important. Of all the media, the press is the most crucial, as it is always interested in newsworthy items and depends to a large extent on information being fed to it by a variety of corporate press officers. - Community: The local community is often the target of public relations activities because of its proximity and the influence that local citizens may have on an organization. 60 | P a g e  4. Public Relations activities It can be seen that the main broad objectives of public relations activities are to provide visibility for the corporate body and support for the marketing agenda at the product level. The promotional objectives will have identified issues concerning the attitudes and relationships stakeholders have with an organization and its products. Decisions will have been made to build awareness and to change perception, preferences or attitudes. The task of the public relations plan is to provide a series of programs that develop and enhance some of the identity cues used by stakeholders to develop their image of the organization and its products. There are a various activities which are derived from public relations, as follows: 1. Public Affairs – Building and maintaining national or local community relations. 2. Lobbying – Building and maintaining relations with legislators and government officials to influence legislation and regulation. 3. Investor Relations – Maintaining relationships with shareholders and others in the financial community. 4. Development – Public relations with donors or members of nonprofit organizations to gain financial or volunteer support. 5. Location PR – Enhancing the image of a city, region, or country. 6. Press Relations – Creating and placing newsworthy information in the news media to attract attention to a person or product. 7. Product Publicity – Publicizing specific products to consumers as well as other organizations. 8. Sponsorship (out of event management and advertising). 9. Corporate advertising (out of corporate public relations and advertising). 10. Crisis management (which has developed out of issues management, a part of corporate public relations). 61 | P a g e  5. Public relations methods and techniques A public relations program consists of a number of planned events and activities that seek to satisfy communication objectives. The following represent some of the broad tools and techniques associated with public relations, but it should be noted that the list is not intended to be comprehensive. Public relations provide some of the deliberate cues which enable stakeholders to develop images and perceptions by which they understand and recognize organizations.  Publicity The quality of the relationship between an organization and the media will dramatically affect the impact and dissemination of news and stories released by an organization. The relationships referred to are those between an organization’s public relations manager and the editor and journalists associated with both the press and the broadcast media.  Press releases The press release is a common form of media relations activity. A written report concerning a change in the organization is sent to various media houses for inclusion in the media vehicle as an item of news. The media house may cover a national area, but very often a local house will suffice. These written statements concern developments in the organization, such as promotions, new products, awards, prizes, new contracts and customers. The statement is deliberately short and written in such a style that it attracts the attention of the editor. Further information can be obtained if it is to be included within the next publication or news broadcast. The press release is a common form of media relations activity62 | P a g e  Press conferences Press conferences are used when a major event has occurred and where a press release cannot convey the appropriate tone or detail required by the organization. Press conferences are mainly used by politicians, but organizations in crisis (e.g. accidents and mergers) and individuals appealing for help (e.g. police requesting assistance from the public with respect to a particular incident) can use this form of communication. Press kits containing a full reproduction of any statements, photographs and relevant back- ground information should always be available.  Interviews Interviews with representatives of an organization enable news and the organization’s view of an issue or event to be conveyed. Other forms of media relations concern bylined articles (articles written by a member of an organization about an issue related to the company and offered for publication), speeches, letters to the editor, and photographs and captions. Media relations can be planned and controlled to the extent of what is sent to the media and when it is released. While there is no control over what is actually used, media relations allow organizations to try to convey information concerning strategic issues and to reach particular stakeholders.  Events Control over public relations events is not as strong as that for publicity. Indeed, negative publicity can be generated by other parties, which can impact badly on an organization by raising doubts about its financial status or perhaps the quality of its products. 63 | P a g e Three main event activity areas can be distinguished product, corporate and community events. 1. Product events Product-orientated events are normally focused upon increasing sales. Cookery Demonstrations, celebrities autographing their books and the opening of a new store by the CEO or local MP are events aimed at