Discussion (mk)

Week 7, "Integrated Marketing Communications and the Changing Media Landscape" was derived from Principles of Marketing, which was adapted by the Saylor Foundation under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported license without attribution as

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Week 7 Integrated Marketing Communications and the

Changing Media Landscape Communication helps businesses grow and prosper, creates relationships, strengthens the

effectiveness of organizations, and allows people to learn about one another. Technology such as

the Internet and cell phones affects the way we communicate and is changing the type of

messaging strategy organizations use.

Do you feel lost without your cell phone? Are you more likely to respond to text messages than

phone calls? Do you use the print publications (magazines, newspapers, references) at the library,

or do you find all your references online? Do your grandparents prefer different methods of

communication? Think about how you get information and then think about how organizations

can communicate with you and other target markets about their products, services, or causes. As

consumers find new sources of information, the media and message strategies used by businesses

must also change if they want to ensure they are reaching the right consumers at the right time

and place.

Marketing communications adds value for customers because it gives them information about

offerings such as features and benefits, where to buy, prices, and even softer messages such as

how the offering may make you feel. Marketing communications follows a simple model that

ensures the message is designed appropriately for the audience and that the message received by

the audience is the same as it was intended.

This week, we explore all the ways marketers communicate with customers. In addition to

traditional advertising, we will discuss public relations, personal selling, sales promotion, and

direct marketing. Woven through the discussions will be an emphasis on how new media fits into

the marketing communication strategies of companies.

7.1 Integrated Marketing Communications

L E A R N I N G O B J E C T I V E S

1. Understand what integrated marketing communications are. 2. Understand why organizations may change their promotional strategies to reach different audiences.

Once they have developed offerings in the form of products and services, organizations must

communicate the value and benefits of the offerings to both current and potential customers in

consumer markets. Integrated marketing communications (IMC) provide a useful

framework designed to deliver one clear, consistent and compelling message to buyers. These

communications span all different types of media—TV, radio, magazines, the Internet, mobile

phones, and so forth. For example, Campbell's Soup Company typically includes the "Mm, mm

good" slogan in the print ads it places in newspapers and magazines, in ads on the Internet, and

in commercials on television and radio. One Campbell's campaign targeted youngsters (

http://www.usatoday.com/story/money/business/2013/09/22/is-wisest-kid-ad-a-smart-choice-

for-campbell/2847363/) while another targeted men, using a professional football player as the

spokesperson (http://www.adclassix.com/a5/70campbellsmanhandlers.html). Large companies

such as Campbell's have the resources to create many different campaigns depending on the

product and the target market. The same message for each target market is conveyed in both print

and TV ads.

Changes in communication technology and instant access to information through tools such as

the Internet explain one of the reasons why integrated marketing communications has become so

important. Delivering clear, consistent, and compelling information about a brand or an

organization helps establish the brand in the minds of consumers and potential customers. Many

consumers and business professionals seek information and connect with other people and

businesses from their computers and phones. The work and social environments are changing,

with more people having virtual offices and texting on their cell phones or communicating

through social media such as Facebook. Text messaging, Internet, cell phones, blogs—the way we

communicate continues to change the way companies are doing business and reaching their

customers. As a result, organizations have realized they need to change their promotional

strategies as well to reach specific audiences.

Many of you may be part of the millennial generation, and it is consumers from this generation

who are driving the change toward new communication technologies. As we discussed in Week 4,

"Market Segmenting, Targeting, and Positioning," you might opt to get promotions

via mobile marketing—say, from retail stores on your cell phone as you walk by them or via a

mobile gaming device that allows you to connect to the web. Likewise, advertisements on

Facebook are becoming more popular as businesses explore social media. For example, when

Honda let people on Facebook use the Honda logo to give heart-shaped virtual gifts on Valentine's

Day, over 1 and a half million people participated in the event and viewed the Honda Fit online in

the process. Imagine the brand awareness generated for the Honda Fit.

Traditional media (magazines, newspapers, television) now compete with media such as the

Internet, texting, and mobile phones; user-generated content such as blogs and YouTube;

and out-of-home advertising such as billboards and movable promotions. You might have

noticed that the tray tables on airplanes sometimes have ads on them. You have probably also

seen ads on the inside of subway cars, in trains and buses, and even in bathroom stalls. These,

too, are examples of out-of-home advertising.

As the media landscape changes, the money marketers spend on different types of

communication will change as well. Some forecasts indicate that companies will increase their

expenditures on new media from about 16 percent of their total promotional budgets to almost 27

percent of their budgets. A survey conducted by StrongView of 387 business leaders indicated that

in 2014, 52 percent planned to increase spending in e-mail marketing and 46 percent planned to

increase spending in social media. Thirty-two percent planned to decrease spending in print

advertising (StrongView, 2013). A lot of the dollars for new media are being taken away from

traditional media (Soulier, n.d.).

7 . 1 K E Y T A K E A W A Y

As the media landscape changes, marketers may change the type of promotions they use to reach their target markets. With changing technology and social media (e.g., Facebook), less money is being budgeted for traditional media such as magazines and more money is budgeted for "new media." Regardless of the type of media used, marketers use integrated marketing communications (IMC) to deliver one consistent message to buyers.

7.2 The Promotion (Communication) Mix

L E A R N I N G O B J E C T I V E S

1. Understand the different components of the promotion mix. 2. Understand the different types of media and vehicles.

Although the money organizations spend promoting their offerings may go to different media

channels, a company still wants to send its customers and potential consumers a clear, consistent,

and compelling message (IMC). The types of marketing communications an organization uses

compose its promotion or communication mix, which consists of advertising, sales

promotions, public relations and publicity, personal selling, and direct marketing.

Advertising

Advertising involves paying to disseminate a message that identifies a brand (product or

service) or an organization being promoted to many people at one time. There is no such thing as

"free advertising." The typical media that organizations use for advertising include television,

magazines, newspapers, the Internet, direct mail, and radio. As we explained, businesses are also

advertising on social media such as Facebook, blogs, Twitter, and mobile devices. Each medium

(television or magazines or mobile phones) has different advantages and disadvantages.

Mobile phones provide continuous access to people on the go although reception may vary in

different markets. Radios, magazines, and newspapers are also portable. People tend to own more

than one radio, but there are so many radio stations in each market that it may be difficult to

reach all target customers. People typically are doing another activity (e.g., driving or studying)

while listening to the radio, and without visuals, radio relies solely on audio. Both television and

radio must get a message to consumers quickly. Although many people change channels or leave

the room during commercials, television does allow for demonstrations.

People may save magazines for a long time and magazines have additional value in that they are

often shared. This is called pass-along readership. Because of the increasing number of media

venues that compete for advertising, magazines and newspapers are suffering in terms of

readership and advertising dollars. Some major newspapers and magazines have gone out of

business. Local news and the fact that local retailers get cheaper rates for advertising in local

newspapers may encourage both local businesses and consumers to support newspapers in some

markets, but other forms of media are battling for the consumers' attention.

One of the biggest factors an organization must determine is which medium or media provides

the biggest bang for the buck, given a product's characteristics and target market. For example, a

30-second ad aired during Super Bowl XLIX cost $4.5 million (GeoClicks, 2014). However, a

record number of people watched the game, so the cost per ad might be only about 3 cents per

viewer. But do the ads pay off for companies in terms of sales? Many advertising professionals

believe many of the ads don't. However, the ads probably do have a brand awareness or public

relations type of effect, which can be equally important if the marketing communications

objective is to create brand awareness.

Within each different medium, an organization might select a different vehicle. A vehicle is the

specific means within a medium to reach a selected target market. For example, if a company

wants to develop commercials on television to reach teenagers, it might select a show such

as Gossip Girl, which ran for several seasons on the CW network. If an organization wants to use

magazines to reach males interested in sports, it might use Sports Illustrated. As technology

changed, Sports Illustrated launched SI.com so readers could get up-to-date information on the

web. On SI.com, readers can also access links to popular articles and "SIVault" where they can

search articles and pictures that have run in the magazine since it was launched in 1954.

Personal Selling

Personal selling is an interactive, paid approach to marketing that involves a buyer and a seller.

The interaction between the two parties can occur in person, by telephone, or via another

technology. Whatever medium is used, developing a relationship with the buyer is usually

something the seller desires. Personal selling works best when the offering is complicated and

may require demonstration such as a car or a piece of new technology.

When you interview for jobs and try to convince potential employers to hire you, you are engaging

in personal selling. The interview is very similar to a buyer-seller situation. Both the buyer and

seller have objectives they hope to achieve. Although business-to-business markets use more

personal selling, some business-to-consumer markets do as well. If you have ever attended a

Pampered Chef or Tupperware party or purchased something from an Amway or Mary Kay

representative, or spoken with a sales associate at Best Buy to help you figure out which

washer/dryer meets your needs, you've been exposed to personal selling. We explore personal

selling in more detail in Section 7.7, "Professional Selling."

Public Relations

Often confused with the term "free advertising," public relations (PR) helps improve and

promote an organization's image and products by putting a positive spin on news stories. Public

relations materials include press releases, publicity, product placement, and sponsorships.

Companies also use PR to promote products and to supplement their sales efforts. PR is often

perceived as more neutral and objective than other forms of promotion because much of the

information is tailored to sound as if it has been created by an organization independent of the

seller. Many companies have internal PR departments or hire PR firms to find and create public

relations opportunities for them. As such, PR is part of a company's promotion budget. Public

relations is explored more fully in Section 7.5, "Public Relations Activities and Tools."

Sales Promotions

Sales promotions consist of other types of promotions—coupons, contests, games, rebates,

mail-in offers—that are not included as part of another component of the communication mix.

Sales promotions are often developed to induce customers and potential customers to take

action quickly, make larger purchases, and make repeat purchases. Many stores now place

coupons next to products to encourage consumers to select a particular brand and products

right at the point of purchase, which is the last time the company has to communicate with the

customer. Sales promotions by definition should be short-term incentives for consumers to buy,

not long-term price discounts, yet many companies are constantly using sales promotions as a

tactic to promote regular sales, diminishing their effectiveness in promoting sales spikes. Many

customers do not purchase a product unless they have a coupon or some discount offer. Entire

websites are now devoted to finding those offers, essentially making the sales promotion price

the regular price for the product.

In business-to-business marketing, sales promotions are typically called

trade promotions because they are targeted to channel members who conduct business or

trade with consumers. Trade promotions include trade shows, sponsorships, event marketing,

and special incentives given to retailers, such as extra money, in-store displays, and prizes to

market particular products and services. Sales promotions are often used to supplement

advertising and create incentives for customers to buy products more quickly. The use of sales

promotions is explored in greater detail in Section 7.6, "Sales Promotion."

Direct Marketing

Direct marketing involves delivering personalized promotional materials directly to individual

consumers. It provides an interactive approach for organizations to reach consumers in hopes of

getting consumers to take action. Materials may be delivered via mail, catalogs, Internet, e-mail,

telephone, or direct-response advertising. Several benefits of direct marketing include the ability

to target a specific set of customers, measure the return on investment (ROI), and test different

strategies before implementing to all targeted consumers. However, direct marketing is very

intrusive, and many consumers may ignore attempts to reach them.

Telemarketing involves direct marketing by phone. Let's say you just sat down for dinner and

the phone rings. It's a local charity calling to raise money. The calls always seem to come at dinner

or at other inconvenient times. Although expensive, telemarketing can be extremely effective for

charitable organizations and different service firms and retailers. However, because some

consumers have negative perceptions of telemarketers, many organizations do not use it.

The Do Not Call Registry, which was established in 2008, prevents organizations from calling

any numbers registered with the Federal Trade Commission.

Catalogs and direct mail provide popular alternatives for many marketers although the volume

sent drops significantly in a weak economy. Direct mail can be personalized and ask consumers to

make a call to action, which is a certain response the organization requests.

Direct response advertising includes an offer and a call to action. Let's say you're watching

television and an interesting product is shown. The announcer says, "Call now and receive a

bonus package." They want consumers to call to purchase the product or to get more information.

However, the Internet provides the preferred direct-response medium because it is less expensive

and easier for the organization. The Internet is also an important medium for direct marketing.

Internet marketing, or e-commerce, or Internet retailing, or any of the other various names used

to refer to the phenomena that has become conducting business over the Internet and taking

business from brick and mortar retailers has exponentially expanded the use of direct marketing

as a direct response promotion vehicle. The US Census Bureau reports steady increases in the

percent of Internet sales versus total retail sales every year since 2006 (US Census Bureau, 2015).

Companies can now interact with customers in a direct channel without using intermediaries such

as retail stores. Even small businesses can find customers in any country reached by the World

Wide Web.

The growth of e-commerce has spawned an entire industry of Internet marketing firms to assist

companies developing online marketing strategies, maximizing exposure of a company’s website

and interest in the product. The chief advantage of Internet marketing is its ability to accurately

target a customer that may need or want the offering, establishing a relationship with the

customer, and completing transactions with the customer, thus making it a highly efficient

promotion method. Internet marketing results are relatively easy to measure in terms of visits to

websites and percent of resulting sales. Some of these metrics are explored in Week 8.

These are the primary promotion tools marketers use to communicate with customers.

Integrated marketing communications is the strategy they use to ensure the promotion tools are

used in the most effective and efficient way to assure the right message is communicated in the

right way and at the right time to achieve the marketing communications objectives. How

marketers can integrate the promotion tools will be explored next.

7 . 2 K E Y T A K E A W A Y

The promotion (communication) mix is composed of advertising, personal selling, public relations, sales promotion, and direct marketing. Once a company decides on a component of the promotion mix, such as advertising, it must still decide which medium (e.g., television, cell phones, magazines) or media (more

than one medium) to use. Within each medium, the company must also select a vehicle, which may be a particular television show, radio station, or magazine.

7.3 The Promotion Mix, Communication, and Buyers' Perceptions

L E A R N I N G O B J E C T I V E S

1. Understand that different factors can affect the promotion mix. 2. Understand the communication process. 3. Understand buyers' perceptual processes.

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 that company's efforts on

television commercials. Why do companies select different types of media for what may be

perceived as similar messages? As Figure 7.4, "Factors That Influence Selection of Promotion

Mix," shows, many factors affect the choice of promotion mix elements.

Figure 7.4 Factors That Influence Selection of Promotion Mix Elements

Budget available. For many companies, the budget available to market a product determines

what elements of the promotion mix are used. 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 the exposure they need to

be successful. Other firms such as McDonald's may come up with creative ways to reach different

target markets. For example, McDonald's targeted college students with a special promotion that

it filmed live in a Boston University lecture.

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. Imagine how much more fuel an airplane needs

for takeoff than it needs once it is in the air. The same is true of communication. More "fuel" is

needed in the beginning to help with the takeoff.

Type of product and type of purchase decision. Different products also require different types of

promotion. Very technical products and very expensive products often need personal 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 since

customers are familiar with the products.

Target market characteristics and consumers' readiness to purchase. In order to select the best

method to reach their target market(s), organizations must also understand how ready different

target markets are to make purchases. For example, 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?

Consumers' preferences for various media. We've already explained that different types of

consumers prefer different types of media. In terms of target markets, as we mentioned,

millennials prefer online, cell phone, and social media more than older consumers. Consumers'

media preferences have been researched extensively by academics and marketing research

companies. Companies also do their own research and conduct surveys of their consumers to find

out how they 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 Time (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. Sales promotions can be higher return for less cost.

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. Uncontrollable events can affect a company's promotions, too. For example, when a

disaster occurs, TV stations often cut advertisements to make way for continuous news coverage.

If there is a crisis or disaster and your company is in the middle of a promotion being advertised

on TV, you will likely have to scramble to reach consumers via another medium. A major strength

of online media is its immediate availability to communicate messages, and to test different

message strategies quickly and economically.

Push versus pull strategy. Businesses must also decide whether to use a push strategy, a pull

strategy, or both push and pull strategies. A push strategy involves promoting a product to

middlemen, such as wholesalers and retailers, who then promote the product to consumers.

Manufacturers may set up displays in retail outlets for new products so the retailer can promote

the product to consumers. A pull strategy involves promoting a product to final consumers. For

example, a manufacturer promotes its new product on television to consumers and places

coupons in the newspaper inserts to get the consumers demanding the product. Their pull causes

wholesalers and retailers to buy the product to try to meet their demand. Many manufacturers use

both a push strategy and a pull strategy.

The Communication Process

Do you use a digital video recorder (DVR), an on-demand service, or some other method to record

movies or television shows so you can watch them when you want without television

commercials? Do you ever use the remote to skip the commercials or to look at different shows?

Think about which television shows you watch, which magazines you read, which radio stations

you select. Think about what else you are doing when you watch television, when you are

studying, or when you are listening to the radio.

Let's say that it's a hot day in July and you're enjoying a day at the beach. Your friends brought a

radio and the volume is turned up so you can hear the music. If you're listening to the music or

talking to a friend at the beach while you're listening to the radio, do you hear or pay attention to

the commercials? Do you remember which products were advertised?

Both these examples point out the extent to which consumers will try to avoid marketing

messages and how there is a lot of stuff going on in the background that may make it hard for a

message to break through the noise. This becomes a major challenge for marketers to design a

message and place it in the right medium where it will have the best chance of being seen and

understood by a target audience.

The communication process illustrates how messages are sent and received, as shown in Figure

7.5, "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. 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.

For example, let's say you're ready to go home on a Friday afternoon and you hear someone

mention an event on Saturday. However, you did not listen to all the details and assume the event

is the next day, not the following Saturday. Since you already made other plans for the next day,

you don't even consider showing up the following Saturday. Has this ever happened to you? You

don't show up at an event because you didn't interpret the message correctly? If you do not hear

someone correctly, misread information, or misinterpret a message, you might think a product or

service provides different benefits or is easier or harder to use than it really is.

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 talking on the phone. The

conversation interferes with remembering what you're reading. Factors such as poor reception,

poor print quality, server problems, or a low battery can also interfere with 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.

Figure 7.5 The Communication Process

Perceptual Processes

Recall that we first discussed perception when we discussed buyer behavior in Week 3,

"Consumer Behavior: How People Make Buying Decisions." The perceptual process is how a

person decides what to pay attention to and how to interpret and remember different things,

among them information included in advertising. When you choose to take an elective class or

select a television show, a magazine, or a radio station, you are selecting what information you are

exposed to and also deciding what gets your attention.

Think about being at the beach again. You're with a friend, but when you hear someone else say

your name, you may pay more attention to the person talking about you than to your friend. The

same thing happens when you watch a television show or read a magazine. You might be watching

a show when the phone rings and then pay more attention to the person on the phone than to

what is on the television. You might be studying for a test and your friends show up and your

attention shifts to them. With so many different types of distractions and technology such as

recording devices, imagine how difficult it is for an advertiser to get your attention.

If an advertiser does get your attention, do you interpret the information correctly or do you

change (distort) it? If a friend tells you a story, then you tell another friend, and that person tells

someone else, will the message be the same after it is relayed to multiple people? If you miss class

and borrow someone else's notes, do you understand what they mean? Not only must advertisers

try to present consistent messages (IMC), they must also try to ensure that you interpret the

message as they intended.

Advertisers also want you to remember their brands and organizations. When you study for an

exam and memorize key terms, you may not remember them after the test. But hopefully if you

hear the terms multiple times, you will remember them. Advertisers use the same strategy to try

to get you to retain their messages. Not only do you see the same commercial or message in

multiple places, but you may also see it multiple times in each place. However, advertisers must

also be careful that consumers don't get so tired of the message that there is a negative effect.

Do you remember information from your first college class? Do you know your friends' phone

numbers or e-mail addresses, or do you just find their names on your contact list? Which

commercials do you remember? What gets your attention? Sometimes annoying or humorous

messages get your attention and you remember the commercial. Advertisers want you to

remember their brand. A great promotion is not effective if people don't remember the brand. We

tend to remember information that has some relevance to our personal situation or beliefs. For

example, if you have no need for a product or service, you might not pay attention to or remember

the messages used to market it.

7 . 3 K E Y T A K E A W A Y

Many factors, such as a firm's marketing budget, the type of product, regulations, target customers, and competitors, influence what composes the promotion mix. Depending on what medium is used, marketers use the communication process to encode or translate ideas into messages that can be correctly interpreted (decoded) by buyers. However, marketers must determine how to get consumers' attention and avoid as much interference and noise as possible. Perceptual processes include how a person decides what to pay attention to and how to interpret and remember different things.

7.4 Message Strategies

L E A R N I N G O B J E C T I V E S

1. Understand what a unique selling proposition is and how it is used. 2. Understand different types of promotion objectives. 3. Identify different message strategies.

Utilizing a Product's Unique Selling Proposition (USP)

When organizations want to communicate value, they must determine what message strategies

work best for them. Smart organizations determine a

product's unique selling proposition (USP), or specific benefit consumers will remember. Domino's "Pizza delivered in 30 minutes or it's free" is a good example of a unique selling

proposition. Likewise, Nike's global slogan "Just Do It" helps athletes and other consumers realize

their potential, and many consumers may think of all the things that they do when they use Nike

products.

When deciding on a message strategy, organizations must consider the audience, the objectives of

the promotion, the media, and the budget, as well as the USP and the product. We discussed in

Week 4 the importance of selecting target markets. Now it becomes useful to know to whom you

wish to communicate. Knowing your audience (which should include members of your target

market) and whom you are trying to reach is critical. The more advertisers know about the

consumers exposed to the message, the better. Commercials for golf products shown during golf

tournaments focus specifically on golfers. Other commercials, such as those from the fast-food

chain Hardee's, are on the risqué side. They may appeal to some members of the target market

but may offend other consumers such as senior citizens.

The Organization's Promotion Objectives

Advertisers must also examine their marketing communications objectives. What are they trying

to accomplish with their promotion mix? Are they trying to build awareness for a new product,

are they wanting to get people to take action immediately, or are they interested in having people

remember their brand in the future? Building primary demand, or demand for a product

category, such as orange juice, might be one objective, but a company also wants to build

selective demand, or demand for its specific brand(s), such as Tropicana orange juice.

Other common objectives follow the AIDA model (attention, interest, desire, and action). AIDA

objectives typically are achieved in steps. First, companies focus on attention and awareness of a

product or service, which is especially important for new offerings. If consumers or businesses are

not aware of a product or service, they won't buy it. Once consumers or businesses are aware of

products or services, organizations try to get consumers interested and persuade them that their

brands are best. Ultimately, companies want consumers to take action or purchase their products

or services. There are usually several objectives in a marketing communications plan, based on

the AIDA model, to reach the target market at the right time in the decision-making process.

Figure 7.6 Examples of Marketing Communications Objectives Based on the AIDA Model

Message Characteristics

Organizations must also determine what type of appeal to use and how to structure their

messages. Some of the common advertising appeals are humorous, emotional, frightening (fear),

rational (informative), and environmentally conscious. If you were asked to name your favorite

commercial, would it be one with a humorous appeal? Many people like commercials that use

humor because they are typically entertaining and memorable. Humor sells, but firms must be

careful that the brand is remembered. Some commercials are very entertaining, but consumers

cannot remember the brand or product.

Companies must also be careful when using fear appeals so consumers don't get too alarmed. A

few years ago, Reebok had to discontinue a TV ad because it upset people. The ad showed a

bungee jumper diving off a bridge, followed by a shot of just his shoes (not Reeboks) hanging

from the bridge by the bungee cord. That ad provoked people because it implied the jumper had

fallen to his death but he would have lived had he worn Reebok shoes. Parents also complained

that the commercial might encourage unsafe behavior (Foltz, 1990).

Firms also decide whether to use strategies such as an open-ended or closed-ended message;

whether to use a one-sided or two-sided message; and whether to use slogans, characters, or

jingles. An open-ended message allows the consumer to draw his or her own conclusion, such

as a commercial for perfume or cologne. A closed-ended message draws a logical conclusion.

Most messages are one-sided, stressing only the positive aspects, similar to what you include on

your résumé. However, two-sided messages are often used as well. Pharmaceutical companies

Awareness

•Ensure 60% of target market is aware of the unique selling proposition within one year.

Interest •Distribute free samples to 25% of target market

Desire •Cents-off coupons are redeemed by 15% of target market

Action •10% of target market purchases product

often show both the positive aspects (benefits) of using a drug and the negative aspects of not

using it. (Of course, US laws require companies to list the side effects of prescriptions—hence the

long "warnings" you hear and read about in conjunction with drug ads.) Political ads frequently

use two-sided messages.

The order of presentation also affects how well consumers remember a brand. If you forgot about

a 25-page term paper that you had to write before the next day of class, which sections of the

paper would be the strongest? Would the beginning, the end, or the middle be the best section?

Many students argue that either the beginning or the end is most important, hoping that the

instructor does not read the entire paper carefully. The same strategy is true for commercials and

advertisements. The beginning and the end of the message should be strong and include the

brand name. That way, if consumers hear or read only part of the message, they will hopefully

remember the brand name. Most ads place their logo or their tagline reflecting their USP at the

end of their ads so that is the last thing the consumer remembers.

Figure 7.7

The Jolly Green Giant helped kids remember the Green Giant

jingle and hopefully reminded them to eat their vegetables.

Source: Photo by Jonathunder. (2006). Wikimedia Commons. Used under the terms of the Creative Commons Attribution-ShareAlike 3.0 Unported license.

Some companies use characters or mascots and/or jingles or slogans. Although media is

changing, many of the characters and jingles have stayed the same for decades. When you think of

Campbell's soup, do you think "Mm, mm good"? Just as the commercials shown earlier focused

on "Mm, mm good," Campbell's has used the same slogan since the early 1900s, and the Campbell

Soup Kids were created in 1904. Although Campbell's changed its slogan in 1998, the company

still uses the "Mm, mm good" slogan in most of its promotions across different media.

Apparently, the slogan still resonates with consumers. Other jingles, characters (mascots), or

symbols you may be familiar with include the Jolly Green Giant, the Wienermobile, and the

Pillsbury Doughboy known as Poppin' Fresh. The following figures illustrate some of these

characters and symbols.

Figure 7.8

The Wienermobile tours the country.

Source: Photo by Mytwocents. (2006). Wikimedia Commons. In the public domain.

Do you remember the Oscar Mayer jingles? Do you find yourself singing along, "I wish I was an

Oscar Mayer wiener, that is what I always want to be ….." The jingle was originally developed in

1963 and is now recorded in different languages. In 2006, Oscar Mayer promoted a singing

contest for the jingle, which still remains popular. Kraft's promotions are also consistent across

media, using the visuals from commercials as pictures in their print ads in both English and

Spanish versions, following the IMC concept.

7 . 4 K E Y T A K E A W A Y

Organizations must determine promotion objectives, or what they want to accomplish with their promotions. For example, if a company has a new brand, it may want to generate awareness or attention. Later, the company may focus on persuading customers to buy its brand. Each brand needs to have a unique selling proposition (USP) for customers to remember and want the product. Depending on their objectives and their USP, marketers must develop a message strategy. Some companies prefer humor or rational appeals while others may use a fear appeal.

7.5 Public Relations Activities and Tools

L E A R N I N G O B J E C T I V E S

1. Understand the concept of public relations and why organizations allocate part of their promotional

budgets to it. 2. Understand what the different types of public relations tools are. 3. Explain how companies use different public relations tools to their advantage.

You just finished reading a great newspaper story about a local restaurant even though you know

the company has experienced several lawsuits and many customer complaints. The news story

makes the restaurant sound like a great corporate citizen and the best place to eat in town.

Sometimes a company gets "free" publicity such as news stories or reviews about its products

and services in the mass media, even though the organization has no control over the content of

the stories and might not even know about their publication. How did a restaurant with so many

complaints manage to get such a great story written about it? How did it get good coverage when

it might not be deserved? Perhaps the restaurant used part of its promotion budget to pay for

public relations efforts to generate positive stories and positive publicity.

Public relations (PR) includes information that an organization wants its public (customers,

employees, stakeholders, general public) to know. PR involves creating a positive image for a

company, an offering, or a person via publicity. PR has become more important because there are

now so many media outlets people pay attention to, including YouTube, social networking sites,

and blogs. It's pretty easy for anyone to say anything about a company in a public forum. Indeed,

publicity is a double-edged sword; it can result in negative news, such as a poor review of a movie,

restaurant, or car, or positive news. Organizations work hard to get favorable news stories, so

while publicity sounds free, building relationships with journalists does cost money. Just like

advertising, public relations is a critical component of the promotion budget for many firms.

Good public relations efforts can help a firm create rapport with its customers, promote what it

has to offer, and supplement its sales efforts. Many organizations that engage in public relations

have in-house PR departments, media relations groups, or investor relations groups. Other

organizations sometimes hire external PR firms or advertising agencies to find and create public

relations opportunities for them. PR specialists must build relationships with people at different

media outlets to help get their stories placed. Universities, hospitals, government organizations,

and charitable organizations often hire PR people to help disseminate positive information about

their services and to increase interest in what they do.

PR specialists also help political campaign managers generate positive information in the press.

PR specialists can handle damage control and put a positive view on situations when something

bad happens to an organization or person. In foreign markets, PR agencies may help ensure

product concepts are understood correctly. Getting all PR stories placed in desired media is not

guaranteed. A lot of time and effort is spent getting to know people who can help publish or

announce the information to the public.

Companies use a variety of tools for their public relations purposes, including annual reports,

brochures and magazines for employees and the public, websites to show good things they're

doing, speeches, blogs, and podcasts. Some of the most commonly used PR tools include press

releases, sponsorships, product placements, and social media.

Figure 7.9

Apple CEO Steve Jobs speaks at the Worldwide Developers Conference about the language

support including in the iPhone OS. The news interest of what Apple is up to is so high that the

event is picked up by newspapers and television stations. Apple ensures the event includes a

large staged background highlighting the product.

Source: Photo by Erik Pitti. (2008). Flickr. Used under the terms of the Creative Commons Attribution 2.0 Generic license.

Press Releases

Part of a company's public relations efforts includes putting a positive spin on news stories.

A press release is a news story written by an organization to promote a product, organization,

or person. Consider how much better a story or a product recommendation is likely to be

perceived when the receiver thinks the content is from an objective third party rather than an

organization writing about itself. Public relations personnel frequently prepare press releases in

hopes that the news media will pick them up and disseminate the information to the public.

However, there is no guarantee that the media will use a press release. Some of the PR

opportunities that companies may seek to highlight in their press releases include charity events,

awards, new products, company reports, and things they are doing to improve the environment or

local community. This makes the press release more newsworthy to the editors of the media.

Figure 7.10 A Picture of Stubb's Legendary Kitchen's "Feed the World Tour"

Source: Photo courtesy of Stubb's Legendary Kitchen.

Press releases and other PR activities can also be used for damage control purposes.

Damage control is the process of countering the extreme negative effects a company gets when

it receives bad publicity. Domino's Pizza was forced to engage in damage control after two of its

employees created a video doing disgusting things to pizzas and then posting it to YouTube. If the

publicity is particularly bad, as it was for Domino's, a company might hold a press conference or

prepare a speech for the top executive to give.

Just as press releases can be used to promote the good things an organization or person does,

press conferences can also be held when a company is simply seeking good PR. An organization

might hold a press conference to announce that it has hired new, highly sought-after executives,

that it is breaking ground on a new building, or to talk about its community service projects.

Sponsorships

Many of you have heard of the Staples Center (Figure 7.11), where the Los Angeles Lakers and Los

Angeles Clippers play basketball and the Los Angeles Kings play hockey. But imagine how

many more people heard about the Staples Center following the announcement that Michael

Jackson's public memorial would take place there. All the news stories talking about tickets and

information about the memorial provided "free" publicity for the center and for the office supplies

store, Staples, for which the center is named. Staples paid $375 million for naming rights of the

center, which was built in 1998 (Wikipedia, n.d.). Indeed, the chain has gotten a huge return on

its sponsorship of the center.

Figure 7.11

The Staples Center in Los Angeles is an example of a venue sponsorship.

The office supplies store Staples paid for the naming rights to the arena.

Source: Photo by Carol M. Highsmith. (2006). Wikipedia. In the public domain.

A sponsorship involves paying a fee to have your name associated with different things, such as:

• A particular venue (Wrigley Field; the Staples Center)

• A superstar's apparel (Tiger Woods wearing Nike hats and shirts)

• An event (the AT&T National Golf Tournament; the Chick-fil-A Peach Bowl)

• A cause (M&M's support of the Special Olympics)

• An educational workshop or information session

• A NASCAR vehicle (by Pfizer, the maker of Viagra; see Figure 7.13)

Even though sponsorships are expensive, they are growing in popularity as corporations seek

ways to strengthen their corporate image, increase their brand awareness, differentiate their

products, and reach their target markets.

Figure 7.12

Pfizer, the maker of Viagra, is one of the many

companies that sponsor NASCAR racing teams.

Source: Photo by Jay Bonvouloir. (2007). Flickr. Used under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic license.

More than 100 corporations based in the United States spent more than $15 billion on

sponsorships in 2013 (IEGSR, 2014). However, sponsorship spending is projected to slow as more

corporations are exploring and using the new media, a less expensive alternative to their IMC

program.

Over two-thirds of the sponsorships in North America are for sports, followed by entertainment

(e.g., music and performing arts) and causes (IEGSR, 2015) (e.g., the Susan G. Komen Race for

the Cure and "alternative spring breaks" for college students). Other organizations and structures,

such as buildings and bridges, may seek sponsorships as a means of generating revenue. Imagine

how many people drive across the Brooklyn Bridge in New York or the Golden Gate Bridge in San

Francisco and how much awareness an organization would get if it were allowed to pay to have its

name on either of the bridges.

Cause-related marketing is one of the fastest-growing types of sponsorships. It occurs when a

company supports a nonprofit organization in some way. For example, M&M's sponsors the

Special Olympics and American Airlines raises money for breast cancer research with an annual

celebrity golf and tennis tournament. The airline also donates frequent flier miles to the cause.

Yoplait Yogurt donates money for breast cancer research for every pink lid that is submitted.

Cause-related marketing can have a positive PR impact by strengthening the affinity people have

for a company that does it.

Companies such as Baskin-Robbins ensure their name is prominent alongside the cause they are

supporting. In this case, (http://causeupdate.com/blog/cause-update/iced-cappy-blast-cause-

promotion?rq=baskin%20robbins) Baskin-Robbins uses Facebook to generate information about

current and potential customers.

Product Placements

Getting a company's product included as part of a television show, movie, video game, special

event, or book is called a product placement. When you watch reruns of Seinfeld, you often see

different Coca-Cola products being consumed. You also see the beverage on the desk of the

American Idol judges. Over 400 product placements typically appear in each episode of The

Biggest Loser. Apple placed products in 24 movies that reached number one between August 1,

2008, and August 1, 2009, while Ford products appeared 20 times and Budweiser products

appeared 12 times (Brandchannel, 2009).

The following Rolling Stone article (http://www.rollingstone.com/movies/pictures/the-most-

egregious-product-placements-in-movie-tv-history-20130604)

discusses what the author considers the "10 most egregious" product placements in the movies.

Typically, a company pays a fee to have one of its products placed. But sometimes the company

pays nothing if the product is needed for a show in some way or as part of the plot. FedEx did not

pay for product placement in the movie Cast Away (Hirschman, 2001). Product placement can

improve a brand's awareness and exposure and often increase its sales. Given the number of

exposures an organization receives with product placement, the cost of a product placement can

be less expensive than commercials might cost.

Although most product placements appear in television shows and movies, corporations are

pursuing other options. For example, they are now placing products in online videos, computer

games, and books. The number of product placements is expected to increase as consumers

continue to skip commercials and advertisements using digital video recorders (DVRs).

7 . 5 K E Y T A K E A W A Y

Public relations (PR) are the activities organizations engage in to create a positive image for a company, product, service, or a person. Press releases, sponsorships, and product placements are three commonly used PR tools. Press releases are designed to generate publicity, but there is no guarantee the media will use them in the stories they write. Sponsorships are designed to increase brand awareness, improve corporate image, and reach target markets. Product placements are designed to generate exposure, brand awareness, and interest.

7.6 Sales Promotions

L E A R N I N G O B J E C T I V E S

1. Learn about different types of sales promotions companies use to get customers to buy their

products. 2. Understand the different types of sales promotions companies use with their business customers. 3. Understand why sales promotions have become such an integral part of an organization's promotion

mix. 4. Differentiate between a push and pull strategy.

Sales promotions are activities that supplement a company's advertising, public relations, and

personal selling efforts. Sales promotions are often temporary, but when the economy is weak,

sales promotions such as coupons become even more popular for consumers and are used more

frequently by organizations. The goal of sales promotions is to persuade customers to take action

quickly and make larger purchases. Sales promotions in business-to-business (B2B) settings are

typically called trade promotions; they are referred to as such because businesses "trade" or do

business with other businesses.

Companies use a pull strategy when they target consumers with promotions. In other words, a

company promotes its products and services to the final consumer to pull a consumer to the

stores or get the consumer asking for the product. If a company sends coupons to the consumer,

hopefully the consumer will take the coupon (sales promotion) to the store and buy the product.

A push strategy is used when businesses are the target of sales promotions so that products may

be pushed through the channel to final consumers. For example, a manufacturer may provide

incentives such as price discounts to the retailer who then promotes or pushes the product to the

final consumer. Figure 7.13, "A Push vs. a Pull Strategy," shows how push strategy differs from a

pull strategy. Many organizations use both a pull and push strategy, promoting their products and

services to both final consumers and their trade partners (retailers, wholesalers).

Figure 7.13 A Push vs. a Pull Strategy

Types of Consumer Sales Promotions

Do you like free samples? Most people do. A sample is a sales promotion in which a small

amount of a product that is for sale is given to consumers to try. Samples increase awareness, so

the strategy encourages trial and builds awareness. You have probably purchased a product that

included a small free sample with it—for example, a small amount of conditioner packaged with

your shampoo. Have you ever gone to a store that provided free samples of different food items?

The idea for giving away samples is to get people to buy a product. Although sampling is an

expensive strategy, it is usually very effective for food. People try the product, the person

providing the sample tells consumers about the product, and mentions any special prices.

In many retail grocery stores, coupons are also given to consumers with the

samples. Coupons provide an immediate price reduction off an item. The amount of the coupon

is later reimbursed to the retailer by the manufacturer. The retailer also gets a handling fee for

accepting coupons. When the economy is weak, more consumers cut out coupons and look for

special bargains such as double coupons and buy-one-get-one-free (BOGO) coupons. While many

consumers cut coupons from the inserts in Sunday newspapers, other consumers find coupons for

products and stores online. Stores may also provide coupons for customers with a loyalty card.

Consumers can also download coupons on many mobile phones. Mobile marketing and the

Internet provide consumers in international markets access to coupons and other promotions. In

India, most coupons used are digital, while paper coupons have the largest share in the United

States. Over 80 percent of diapers are purchased with coupons; imagine how much easier and less

wasteful digital coupons scanned from a mobile phone are for both organizations and consumers.

Point-of-purchase displays, including coupon machines placed in stores, encourage

consumers to buy a product immediately. When a consumer sees a special display or can get a

coupon instantly, manufacturers hope the sales promotion increases sales. Other sales

promotions are conducted online. Online sales promotions include incentives such as free items,

free shipping, coupons, and sweepstakes. For example, many online merchants such as Shoe

Station and Zappos offer free shipping and free return shipping to encourage consumers to shop

online. Some firms have found that the response they get to their online sales promotions is better

than the response they get to traditional sales promotions.

Another very popular sales promotion for consumers is a premium. A premium is something

you get either for free or for a small shipping and handling charge with your proof of purchase

(sales receipt or part of package). Remember wanting your favorite cereal because there was a toy

in the box? The toy is an example of a premium. Sometimes you might have to mail in a certain

number of proofs of purchase to get a premium. The purpose of a premium is to motivate you to a

buy a product multiple times. What many people don't realize is that when they pay the shipping

and handling charges, they may also be paying for the premium.

Contests or sweepstakes also attract a lot of people. Contests are sales promotions people enter

or participate in to win a prize. The Publisher's Clearing House Sweepstakes and the Monopoly

Game at McDonald's are examples. The organization that conducts the sweepstakes or contest

hopes you will not only enter its contest but buy magazines (or more food) when you do.

Loyalty programs are sales promotions designed to get repeat business. Loyalty programs

include things such as frequent flier programs, hotel programs, and shopping cards for grocery

stores, drugstores, and restaurants. Sometimes point systems are used in conjunction with loyalty

programs. After you accumulate so many miles or points, an organization might provide you with

a special incentive such as a free flight, free hotel room, or free sandwich. Many loyalty programs,

especially hotel and airline programs, have partners to give consumers more ways to accumulate

and use miles and points.

Rebates are popular with both consumers and the manufacturers that provide them. When you

get a rebate, you are refunded part (or all) of the purchase price of a product after completing a

form and sending it to the manufacturer with your proof of purchase. The trick is completing the

paperwork on time. Many consumers forget or wait too long to do so. Consequently, they do not

get any money back. This is why rebates are also popular with manufacturers. Rebates sound

great to consumers until they forget to send the rebate paperwork.

Types of Trade Promotions

One of the most common types of sales promotions in B2B markets are trade shows.

A trade show is an event in which firms in a particular industry display and demonstrate their

offerings to other organizations they hope will buy them. There are typically many different trade

shows in which one organization can participate. Using displays, brochures, and other materials,

representatives at trade shows can identify potential customers (prospects), inform customers

about new and existing products, and show them products and materials. Representatives can

also get feedback from prospects about their company's products and materials, and perhaps

about competitors.

Companies also gather competitive information at trade shows because they can see the products

other firms are exhibiting and how they are selling them. While about 75 percent of

representatives attending trade shows actually buy the product(s) they see, 93 percent of

attendees are influenced by what they see at the trade shows. However, only 20 percent of

organizations follow up on leads obtained at trade shows and only 17 percent of buyers are called

upon after they express interest in a particular company's products (Tanner Jr. & Pitta, 2009).

Figure 7.14, "A Samsung Display at the Consumer Electronics (CES) Trade Show in Las Vegas" is

an example of a booth display at a trade show.

Figure 7.14 A Samsung Display at the Consumer Electronics (CES) Trade Show in Las Vegas

Source: Photo by Ben Franske. (2009). Wikimedia Commons. Used under the

terms of the Creative Commons Attribution-ShareAlike 4.0 International license.

Conventions, or meetings, with groups of professionals also provide a way for sellers to show

potential customers different products. For example, a medical convention might be a good

opportunity to display a new medical device. Sales representatives and managers often attend

conventions to market their products.

Sales contests, which are often held by manufacturers or vendors, provide incentives for

salespeople to increase their sales. Often, the contests focus on selling higher-profit or slow-

moving products. The sales representative with the most sales of the product wins a prize such as

a free vacation, company recognition, or cash.

Trade allowances give channel partners—for example, a manufacturer's wholesalers,

distributors, retailers—different incentives to push a product. One type of trade allowance is

an advertising allowance (money) to advertise a seller's products in local newspapers. An

advertising allowance benefits both the manufacturer and the retailer. Typically, the retailer can

get a lower rate than manufacturers on advertising in local outlets, saving the manufacturer

money. The retailer benefits by getting an allowance from the manufacturer.

Another sales promotion tool manufacturers offer businesses is training to help their

salespeople understand how the manufacturers' products work and how consumers can be

enticed to buy them. Many manufacturers also provide in-store product demonstrations to

show a channel partner's customers how products work and answer questions. Demonstrations of

new video game systems and computers are popular and successful in generating sales.

Free merchandise, such as a tool, television, or other product produced by the manufacturer,

can also be used to get retailers to sell products to consumers. In other words, a manufacturer of

televisions might offer the manager of a retail electronics store a television to push its products. If

a certain number of televisions are sold, the manager gets the television.

Have you ever been to an electronics store or a furniture store and felt like the salesperson was

pushing one particular television or one particular mattress? Perhaps the salesperson was

getting push money, or a cash incentive from the manufacturer to push a particular item. The

push to the sell item might be because there is a large amount of inventory of it, it is being

replaced by a new model, or the product is not selling well.

Figure 7.15, "Examples of Sales Promotions," recaps the different types of sales promotions

designed for both consumers and businesses. Although different types of sales promotions work

best for different organizations, rebates are profitable for companies because, as you have

learned, many consumers forget to send in their rebate forms. In a weak economy, consumers

tend to use more coupons, but they also buy more store brands. Coupons available online or at the

point of purchase are being used more often by consumers. Trade shows can be very successful,

although the companies that participate in them need to follow-up on the generated leads.

Figure 7.15 Examples of Sales Promotions

7 . 6 K E Y T A K E A W A Y

Companies use sales promotions to get customers to take action (make purchases) quickly. Sales promotions increase the awareness of products, help introduce new products, and often create interest in the organizations that run the promotions. Coupons, contests, samples, and premiums are among the types of sales promotions aimed at consumers. Trade promotions, or promotions aimed at businesses, include trade shows, sales contests, trade allowances, and push money.

7.7 Professional Selling

L E A R N I N G O B J E C T I V E S

1. Recognize the role professional selling plays in society and in firms' marketing strategies. 2. Identify the types of sales positions.

You've created a great product, you've priced it right, and you've set a wonderful marketing

communication strategy in motion. Now you can just sit back and watch the sales roll in, right?

Probably not. Unless your company is able to sell the product entirely over the Internet, you

probably have a lot more work to do. For example, if you want consumers to be able to buy the

product in a retail store, someone will have to convince the retailer to carry the product.

"Nothing happens until someone sells something," is an old saying in business. But in reality, a lot

must happen before a sale can be made. Companies count on their sales and marketing teams not

only to sell products but to the lay the groundwork that makes it happen. However, salespeople

are expensive. Often they are the most expensive element in a company's marketing strategy. As a

result, they have to generate business in order to justify a firm's investment in them.

What Salespeople Do

Salespeople act on behalf of their companies by doing the following:

• Creating value for their firms' customers

• Managing relationships

• Relaying customer and market information back to their organizations

In addition to acting on behalf of their firms, sales representatives also act on behalf of their

customers. Whenever a salesperson goes back to his or her company with a customer's request, be

it for quicker delivery, a change in a product feature, or a negotiated price, he or she is voicing the

customer's needs. The goal is to help the buyer purchase what serves his or her needs the best.

From society's perspective, selling is wonderful when professional salespeople act on behalf of

both buyers and sellers. The salesperson has a fiduciary responsibility (in this case meaning

something needs to be sold) to the company and an ethical responsibility to the buyer. At times,

however, the two responsibilities conflict with one another. For example, what should a

salesperson do if his or her product meets only most of a buyer's needs, while a competitor's

product is a perfect fit?

Salespeople also face conflicts within their companies. When a salesperson tells a customer a

product will be delivered in three days, he or she has made a promise that will either be kept or

broken by the company's shipping department. When the salesperson accepts a contract with

certain terms, he or she has made a promise to the customer that will either be kept or broken by

the company's credit department. What if the credit department and shipping department can't

agree on the shipping terms the customer should receive? Which group should the salesperson

side with? What if managers want the salesperson to sell a product that's unreliable and will

swamp the company's customer service representatives with buyers' complaints? Should he or she

nonetheless work hard to sell the offering?

Situations such as these create role conflict. Role conflict occurs when the expectations people

set for you differ from one another. Now couple the situation we just mentioned with the fact that

the salesperson has a personal interest in whether the sale is made or not. Perhaps his or her

income or job depends on it. Can you understand how role conflict might result in someone using

questionable tactics to sell a product?

So are salespeople dishonest? You might be surprised to learn that one study found that

salespeople are less likely to exaggerate in order to get what they want than politicians, preachers,

and professors. Another study looked at how business students responded to ethical dilemmas

versus how professional salespeople responded. What did the study find? That salespeople were

more likely to respond ethically than students.

In general, salespeople handle these conflicting expectations well. Society benefits because

salespeople help buyers make more informed decisions and help their companies succeed, which,

in turn, creates jobs for people and products they can use. Most salespeople also truly believe in

the effectiveness of the company's offerings. If a salesperson truly believes that the product he or

she sells is the best, and when this belief is coupled with a genuine concern for the welfare of the

customer—a concern that most salespeople share—society can't lose.

Creating Value

Consider the following situations:

• A food wholesaler is working overtime to prepare invoices. Unfortunately, one out of five

has a mistake. The result is that customers don't get their invoices in a timely fashion, so

they don't pay quickly and don't pay the correct amounts. Consequently, the company has

to borrow money to fulfill its payroll obligations. John Plott, a salesperson from Sri-IIST,

a document-management company, recommends the wholesaler purchase an electronic

invoicing system. The wholesaler does. Subsequently, it takes the wholesaler just days to

get invoices ready, instead of weeks. And instead of the invoices being only 80 percent

accurate, they are close to being 100 percent accurate. The wholesaler no longer has

trouble meeting its payroll because customers are paying more quickly.

• Sanderson Farms, a chicken processor, wants to build a new plant near Waco, Texas. The

chambers of commerce for several towns in the area vie for the project. The chamber

representative from Waco, though, locates an enterprise zone that reduces the company's

taxes for a period of time, and then works with a local banker to get the company better

financing. In addition, the rep gets a local technical college involved so Sanderson will

have enough trained employees. These factors create a unique package that sells the

company on setting up shop in Waco.

These are true stories of how salespeople create value by understanding the needs of their

customers and then create solutions to meet those needs. Salespeople can adapt the offering, such

as in the Sanderson Farms example, or they can adapt how they present the offering so that it is

easier for the client to understand and make the right decision.

Adapting a message or product on the fly isn't something that can be easily accomplished with

other types of marketing communication. Granted, some websites are designed to adapt the

information and products they display based on what a customer appears to be interested in while

he or she is looking at the sites. But unless the site has a "chat with a representative" feature, there

is no real dialogue occurring. The ability to engage in dialogue helps salespeople better

understand their customers and their needs and then create valuable solutions.

Note also that creating value means making sales. Salespeople sell—that's the bulk of the value

they deliver to their employers. There are other ways in which they deliver value, but it is how

much they sell that determines most of the value they deliver to their companies.

Salespeople aren't appropriate channels for companies in all situations, however. Some purchases

don't require the salesperson's expertise. Or the need to sell at a very low cost may make retail

stores or online selling more attractive. But in situations requiring adaptation, customer

education, and other value-adding activities, salespeople can be the best channel to reach

customers.

Managing Relationships

Because their time is limited, sales representatives have to decide which accounts they have the

best shot at winning and which are the most lucrative. Once a salesperson has decided to pursue

an account, a strategy is devised and implemented, and if a sale happens, the salesperson is also

responsible for ensuring that the offering is implemented properly and to the customer's

satisfaction.

We've already emphasized the notion of "customers for life" in this course. Salespeople recognize

that business is not about making friends, but about making and retaining customers. Although

buyers tend to purchase products from salespeople they like, being liked is not enough.

Salespeople have to ensure that they close the deal with the customer. They also have to recognize

that the goal is not to just close one deal, but as many deals as possible in the future.

Gathering Information

Salespeople are boundary spanners, in that they operate outside the firm and in the field. As

such, they are the first to learn about what competitors are doing. An important function for

them, then, is to report back to headquarters about their competitors' new offerings and

strategies.

Similarly, salespeople interact directly with customers and, in so doing, gather a great deal of

useful information about their needs. The salespeople then pass the information along to their

firms, which use it to create new offerings, adjust their current offerings, and reformulate their

marketing tactics. The trick is getting the information to the right decision makers in firms. Many

companies use customer relationship management (CRM) software like Aplicor or Salesforce.com

to provide a mechanism for salespeople to enter customer data and others to retrieve it. A

company's marketing department, for example, can then use that data to pinpoint segments of

customers to communicate directly with. In addition to using the data to improve and create and

marketing strategies, the information can also help marketing decision makers understand who

makes buying decisions, resulting in such decisions as targeting trade shows where potential

buyers are likely to be. In other words, marketing managers don't have to ask salespeople directly

what customers want; they can pull that information from a customer database.

Figure 7.16

Aplicor is a computer software program that enables salespeople to capture and track

information on their accounts. This information can then be used by marketing mangers to

design better marketing strategies and offerings. The system also helps salespeople manage

their accounts better, because they have access to more customer information.

Source: Aplicor. Used with permission.

Types of Sales Positions

There are different ways to categorize salespeople. They can be categorized by the customers they

work with, such as whether they are consumers, other businesses, or government institutions.

Another way to categorize salespeople is by the size of their customers. For the purposes of this

book, we will categorize salespeople by their activities. Using activities as a basis, there are four

basic types of salespeople: missionary salespeople, trade salespeople, prospectors, and account

managers. Most professional sales positions involve selling to other businesses, but many also sell

to consumers like you. Next, we discuss each of the types of salespeople.

Missionary Salespeople

A missionary salesperson calls on people who make decisions about products but don't

actually buy them, and while they call on individuals, the relationship is business-to-business. For

example, a pharmaceutical representative might call on a physician to provide the doctor with

clinical information about a medication's effectiveness. The salesperson hopes the doctor will

prescribe the drug. Patients, not doctors, actually purchase the medication. Similarly, salespeople

call on your professors urging them to use certain textbooks. But you, the student, choose whether

or not to actually buy the books.

There are salespeople who also work with "market influencers." Mary Gros works at Teradata, a

company that develops data warehousing solutions. Gros calls on college faculty members who

have the power to influence decision makers when it comes to the data warehouses they use,

either by consulting for them, writing research papers about data warehousing products, or

offering opinions to students on the software. In an effort to influence what they write about

Teradata's offerings, Gros also visits with analysts who write reviews of products.

Trade Salespeople

A trade salesperson is someone who calls on retailers and helps them display, advertise, and

sell products to consumers. Eddy Patterson is a trade salesperson. Patterson calls on major

supermarket chains like HEB for Stubb's Bar-B-Q, a company that makes barbecue sauces, rubs,

marinades, and other barbecuing products. Patterson makes suggestions about how Stubb's

products should be priced and where they should be placed in store so they will sell faster.

Patterson also works with his clients' advertising departments in order to create effective ads and

fliers featuring Stubb's products.

Figure 7.17

Trade salespeople like Eddy Patterson for Stubb's

help retailers promote and sell products to consumers.

Source: Photo courtesy of Stubb's Legendary Kitchen.

Prospectors

A prospector is a salesperson whose primary function is to find prospects, or potential

customers. The potential customers have a need, but for any number of reasons, they are not

actively looking for products to meet those needs—perhaps because they lack information about

where to look for them or simply haven't had the time to do so. Prospectors often knock on a lot of

doors and make a lot of phone calls, which is called cold calling because they do not know the

potential accounts and are therefore talking to them "cold." Their primary job is to sell, but the

activity that drives their success is prospecting. Many salespeople who sell to consumers would be

considered prospectors, including salespeople such as insurance or financial services salespeople,

or cosmetic salespeople such as those working for Avon or Mary Kay.

In some B2B situations, the prospector finds a prospect and then turns it over to another

salesperson to close the deal. Or the prospector may take the prospect all the way through the

sales process and close the sale. The primary responsibility is to make sales, but the activity that

drives the salesperson's success is prospecting.

Account Managers

Account managers are responsible for ongoing business with a customer who uses a product. A new customer may be found by a prospector and then turned over to an account manager, or new

accounts may be so rare that the account manager is directly responsible for identifying and

closing them. For example, if you sold beds to hospitals, new hospital organizations are rare. A

new hospital may be built, but chances are good that it is replacing an existing hospital or is part

of an existing hospital chain, so the account would already have coverage.

Figure 7.18

Taylor Bergstrom, who began his career as a sales representative for the Texas Rangers

baseball team, is now an account manager for the club. Some of the deals he closes are worth

hundreds of thousands of dollars.

Source: Taylor Bergstrom. Used with permission.

Taylor Bergstrom, a Baylor University graduate, began his career as a sales representative

prospecting for the Texas Rangers baseball team. Bergstrom spent a lot of time calling people who

had purchased single game tickets in an effort to sell them fifteen-game packages or other special-

ticket packages. Today, Bergstrom is an senior account manager for the club. He works with

season ticket holders to ensure that they have a great experience over the course of a season,

regardless of whether the Rangers win or lose. His sales goals include upgrading season ticket

holders to more expensive seats, identifying referral opportunities for new season-ticket sales,

and selling special-event packages, such as party packages to box-seat holders. While most

account managers sell to businesses, some, like Bergstrom, sell to individual consumers.

Account managers also have to identify lead users (people or organizations likely to use new,

cutting-edge products) and build relationships with them. Lead users are in a good position to

help improve a company's offerings or develop new ones. Account managers work closely with

these lead users and build relationships across both their companies so that the two organizations

can innovate together.

Figure 7.19 The Sales Process

A typical sales process starts with the approach and move through several stages to the close.

Good salespeople continue with making sure the customer gets the product, uses it right, and is

happy with it.

With the buyer's permission, the salesperson then moves into a needs identification section. In

complex situations, many questions are asked, perhaps over several sales calls. In simpler

situations, needs may not vary across customers, so a canned presentation is more likely. Then,

instead of identifying needs, needs are simply listed as solutions are described.

A presentation is then made that shows how the offering satisfies the needs identified earlier. One

approach to presenting solutions uses statements called FEBAs. FEBA stands for feature,

evidence, benefit, and agreement. The salesperson says something like, "This camera has an

automatic zoom [feature]. If you look at the viewfinder as I move the camera, you can see how the

camera zooms in and out on the objects it sees [evidence]. This zoom will help you capture those

key moments in Junior's basketball games that you were telling me you wanted to photograph

[benefit]. Won't that add a lot to your scrapbooks [agreement]?"

Note that the benefit was tied to something the customer said was important. A benefit only exists

when something is satisfying a need. The automatic zoom would provide no benefit if the

customer didn't want to take pictures of objects, both near and far.

Objections are concerns or reasons not to continue that are raised by the buyer, and can occur at

any time. A prospect may object in the approach, saying there isn't enough time available for a

sales call or nothing is needed right now. Or, during the presentation, a buyer may not like a

particular feature. For example, the buyer might find that the automatic zoom leads the camera to

focus on the wrong object. Salespeople should probe to find out if the objection represents a

misunderstanding or a hidden need. Further explanation may resolve the buyer's concern or there

may need to be a trade-off; yes, a better zoom is available but it may be out of the buyer's price

range, for example.

When all the objections are resolved to the buyer's satisfaction, the salesperson should ask for the

sale. Asking for the sale is called the close. In complex selling situations that require many sales

calls, the close may be a request for the next meeting or some other action. When the close

involves an actual sale, the next step is to deliver the goods and make sure the customer is happy.

The sales process used to sell products is generally the same regardless of the selling strategy

used. However, the stage being emphasized will affect the strategy selected in the first place. For

example, if the problem is a new one that requires a customized solution, the salesperson and

buyer are likely to spend more time in the needs identification stage. Consequently, a needs-

satisfaction strategy or consultation strategy is likely to be used. Conversely, if it's already clear

what the client's needs are, the presentation stage is likely to be more important. In this case, the

salesperson might use a script-based selling strategy, which focuses on presenting a product's

benefits rather than questioning the customer.

7 . 7 K E Y T A K E A W A Y

Salespeople act as representatives for other people, including employees who work in other parts of their companies. Salespeople create value for their customers, manage relationships, and gather information for their firms. There are four types of salespeople: missionary salespeople, trade salespeople, prospectors, and account managers. The selling process is a systematic way to find and research prospects and bring them to action.

7.8 The Promotion Budget

L E A R N I N G O B J E C T I V E S

1. Understand different ways in which promotion budgets can be set. 2. Understand how the budget can be allocated among different media. An offering's budget is a critical factor when it comes to deciding which message strategies to

pursue. Several methods can be used to determine the promotion budget. The simplest method

for determining the promotion budget is often merely using

a percentage of last year's sales or the projected sales for the next year. This method does not

take into account any changes in the market or unexpected circumstances. However, many firms

use this method because it is simple and straightforward.

The affordable method, or what you think you can afford, is a method used often by small

businesses. Unfortunately, things often cost more than anticipated, and you may not have enough

money. Many small businesses think they're going to have money for promotion, but they run out

and cannot spend as much on promotion as they had hoped. Such a situation may have happened

to you when you planned a weekend trip based on what you thought you could afford, and you did

not have enough money. As a result, you had to modify your plans and not do everything.

Other companies may decide to use competitive parity—they try to keep their promotional

spending comparable to the competitors' spending level. This method is designed to keep a brand

in the minds of consumers. During a recession, some firms feel like they must spend as much—if

not more—than their competitors to get customers to buy from them. Other companies are forced

to cut back on their spending or pursue more targeted promotions. When Kmart faced

bankruptcy, the company cut back on expenditures, yet it kept its advertising inserts (free-

standing inserts, or FSI) in Sunday newspapers to remain competitive with other businesses that

had an FSI.

A more rational approach is the objective and task method, whereby marketing managers

first determine what they want to accomplish (objectives) with their communication. Then they

determine what activities—commercials, sales promotions, and so on—are necessary to

accomplish the objectives. Finally, they conduct research to figure out how much the activities, or

tasks, cost in order to develop a budget.

Part of the budgeting process includes deciding how much money to allocate to different media.

Although most media budgets are still spent predominantly on traditional media, shifts in

spending are occurring as the media landscape continues to change. Mobile marketing continues

to become more popular as a way to reach specific audiences. One estimate shows that over one-

third of cell phone users were exposed to mobile advertising in 2009 and that 16 percent of the

people exposed to mobile advertising responded to the ads via text messaging. Younger people are

typically the most accepting of mobile advertising (Loechener, 2009).

Figure 7.20 Stubb's Bar-B-Q Trailer—Out-of-Home Advertising That Is Mobile Marketing

The Stubb's Bar-B-Q trailer travels around the

country, promoting the brand name and product.

Source: Photo courtesy of Stubb's Legendary Kitchen.

The manufacturers of most major brands plan to use texting and multimedia messages in the

future. Mobile marketing allows advertisers to communicate with consumers and businesses on

the go. Over half of Chinese, Korean, Indian, and Thai Internet users access social media sites

through their phones rather than through computers (IDC, 2009). While many marketers plan to

use electronic devices for their mobile-marketing strategies, other firms may use movable or

mobile promotions (see Figure 7.20, "Stubb's Bar-B-Q Trailer—Out-of-Home Advertising That Is

Mobile Marketing"), which, as discussed earlier, are also considered out-of-home advertising. It is

anticipated that the percentage companies spend on mobile media may be as much as 25 percent

of their total promotional budgets by 2011 (Mobile Europe, 2006).

7 . 8 K E Y T A K E A W A Y

Companies can determine how much to spend on promotion several different ways. The percent of sales method, in which companies use a set percentage of sales for their promotion, is often the easiest method to use. Small companies may focus on what they think they can afford while other organizations may try to keep their promotions relatively equal to those of their competitors. The objective and task approach takes objectives into consideration and the costs of the tasks necessary to accomplish objectives in order to determine the promotion budget.

W E E K 8 P R E V I E W

Week 8 is special topics week, business-to-business marketing, marketing information systems, and marketing math.

Most of this course has focused on consumer markets. Although we have touched on business-to- business (B2B) markets occasionally, the goal thus far was to ensure you have a firm foundation of the marketing principles as they apply to consumer markets. Nevertheless, most careers in marketing as well as a good portion of marketing expenses occur in the B2B environment. So, we will begin Week 8 taking a look at many of the ways B2B markets are different than consumer markets. The marketing principles are the same; the application of those principles tends to be a little different for B2B markets.

We also stressed the importance of marketing research throughout the course. Our second special topic in Week 8 will give you an overview of marketing information systems (MIS), a systematic way to compile marketing research as well as data from other sources to aid decision making. MIS is also one of those fast-growing fields within marketing that is a fertile source of new jobs due to the vast improvements of technology and companies' ability to capture and use data.

We will end the week with our third topic, marketing metrics. You may be glazing over as you read this. Rest assured we will make the math as easy as we can. However, measuring the effectiveness of marketing efforts is critical for two reasons; first, companies demand to know if their marketing expenditure are paying off; and second, because it is only though measurement that we can monitor our marketing plans and adjust them as necessary.

Week 7 References

Section 7.1 Soulier, H. (n.d.). 2014 marketing trends: Get your search, social and mobile on. Mindgruve.com. Retrieved January 26, 2015, from http://mindgruve.com/blog/search-engine-marketing/2014-marketing- trends-get-your-search-social-mobile-on

StrongView (2013). 2014 Marketing trends survey. Retrieved from ttp://www.strongview.com/pdf/StrongView_2014_Marketing_Trends_Results.pdf

Section 7.2 GeoClicks. (2014, November 17). 2015 Super Bowl ad costs – NBC ups the ante. Superbowl- commercials.org. Retrieved January 12, 2015, from http://www.superbowl-commercials.org/34310.html

US Census Bureau. (2015). Quarterly retail e-commerce sales, third quarter, 2015. Retrieved from https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf

Section 7.4 Foltz, K. (1990, March 23). Reebok removes TV ad after complaints from viewers. New York Times. Retrieved February 24, 2015, from http://www.nytimes.com/1990/03/23/business/the-media-business- reebok-removes-tv-ad-after-complaints-from-viewers.html

Section 7.5 Brandchannel. (n.d.). 2009 brandcameo product placement awards. Retrieved December 9, 2009, from http://brandchannel.com/features_effect.asp?pf_id=489

Hirschman, D. (2001). 'Cast Away' delivers goods for Fedex. Chicago Tribune. Retrieved February 24, 2015, from http://articles.chicagotribune.com/2001-01-08/features/0101080173_1_fedex-spokeswoman- product-placement-fedex-corp

IEGSR. (2014, May 27). Who spent the most on sponsorship in 2013: IEG's top spenders list. Retrieved February 24, 2015, from http://www.sponsorship.com/iegsr/2014/05/27/Who-Spent-The-Most-On- Sponsorship-In-2013--IEG-s-T.aspx

IEGSR. (2015). Projected 2015 Shares of North American Sponsorship Model. Retrieved from http://www.sponsorship.com/About-IEG/Press-Room/IEG-Projects-North-American-Sponsorship- Spending-t.aspx

Wikipedia. (n.d.). Staples center. Retrieved December 9, 2009, from http://en.wikipedia.org/wiki/Staples_Center

Section 7.6 Tanner Jr., J. F., & Pitta, D. (2009). Identifying and creating customer value (special session presentation, Summer Educators' Conference, Chicago).

Section 7.8 IDC. (2009, November 17). Social network site users ready to go mobile but telecom carriers need to set the stage for mass adoption, says IDC. Retrieved January 20, 2010, from http://www.idc.com/AP/pressrelease.jsp?containerId=prSG22084309 (accessed January 20, 2010). Loechener, J. (2009, May 27). Advertising growth spreads in all mobile formats [Blog post]. Center for Media Research. MediaPost Blogs. Retrieved April 13, 2012, from http://www.mediapost.com/publications/article/106675/

Mobile Europe. (2006, February 20). 89% of major brands planning to market via mobile phones by 2008. Retrieved April 13, 2012, from http://www.mmaglobal.com/research/89-major-brands-planning-market- mobile-phones-2008-mobile-marketing- accelerate-more-half-br