You might consider price promotions which would include activities such as games, draws and competitions. One benefit is that costs can be calculated fairly precisely before this type of sales promotion.
Games are one of those activities which has become far more elaborate since marketing has become digital; so traditionally a game might be a bingo card or a crossword puzzle, but today the game can be a digital activity undertaken online. Obviously, there are cost implications, since we know that simple paper-based competitions are far cheaper than their digital counterparts.
Draws would be simply a lottery style activity where customers are given a ticket with a number, and when the draw happens some lucky customer will win prizes!
Competitions, unlike draws, will need a level of skill in order to win. A competition might be a quiz on a specific subject. Whichever giveaway you decide to go for, try to keep it as focused on your target customer, and your products and services, as possible. For example, if you have a cosmetics-based business, ask questions or set tasks in relation to hair and beauty.
Giveaways, also known as premiums, are products or services which are given away free or at a low price in order to provide incentives for customers to buy the product or service. There are a number of them, let us have a look at some.
Free-in or on-pack gifts where a small item is attached to your product as it is sold.
Free-in-the-mail giveaways where your customer collects tokens or packaging and then redeems them for a free gift.
Self-liquidating offers which see the promotion cover its own costs i.e. the giveaway breaks even. So your customer benefits because they get the product at a lower price. You benefit because you buy product/gifts in bulk at a lower price per item. In a nutshell the customer purchases at your cost price plus a small admin fee. Be careful though, you don’t want to be stuck with excess stock so everything must go!
Buy-one-get-one-free (BOGOF) is where the customer gets two items for the price of one. To the consumer it feels like they’re getting your product at half price, but in reality you simply doubled your cost price. Please go to the chapter on price for an example, as well as other creative ways to use price in your marketing.
Put simply, money off deals are where you offer a discount to customer. The benefit is that the customer sees an immediate increase in value for what they pay. Again the money off deal can be used to get a customer to trial your product, and you will get a quick increase in sales. Be careful if you wish to create the perception of high quality, because discounting your product will diminish that image.
An alternative would be a value pack where the consumer buys more products, but the unit price is lower. Money off deals could also include discounting. You must get your costing correct here, but by attracting bigger orders you might be in a position to offer discounts. In fact in some markets it will be expected. It would be a good idea to work out a discount structure prior to entering any kind of negotiation with customers.
A rebate is a cash refund. The difference between a rebate and a coupon, is that the rebates are claimed after you good or service has been purchased. There are some other rather interesting rebating techniques that you might use. For example, you may set a target for your customer to reach in terms of the cash value of products that they consume over time. Then, if your customer increases purchases from $2000 per annum to $10,000 per annum you might agree a rebate of $1000 at the end of the period. This means that you have increased your sales from $2000 to $9000! Remember to cost any promotion carefully.
Traditionally coupons were given away in newspapers and magazines, or maybe as part of a leaflet campaign. Digital marketing has rejuvenated the use of coupons. Historically the benefit of a coupon was that you had a permanent record of your customer. Of course digital technology means that you collect digital information about customers, and therefore can tailor coupons to their needs. So couponing is one of the few types of sales promotion which has benefited from innovative new technologies.
A coupon is basically a certificate, paper or digital, used by the customer for some kind of saving for a specific product or service. Try couponing if you are new to a market in order to get people to try your products or services out; and equally, you might have a mature product or service that needs to an increase in sales, and coupons might be an ideal way to achieve that objective.
Try digital coupons. If you have a website, or if you have your customer’s telephone number, you can easily start couponing. A coupon may be redeemed on your website, or you might text a coupon to a consumer via their smartphone. There is plenty of low cost software out there which you could exploit.
There are also couponing based organisations, such as the Groupon and www.extremecouping.com, amongst others. Groupon has the advantage of being able to target local geographical areas, so might be more useful to your small business. If you have a niche product which might have more of a national or international appeal, it is probably better to avoid the large couponing companies which are better suited to more resourceful consumer brands.
There is nothing like actually trying a product or service out for yourself; therefore, if you experience it you know what you are buying and it may make it simpler for you to achieve your sale. You could give away a free sample, or you might decide to charge a small amount to offset the cost of the sample.
The most cost-effective way of using a sample is to make sure that it is given to people or businesses that are likely to buy your product or service. Obviously some samples are delivered door to door, are given out in stores, are sent by mail, or perhaps they are given away at trade fairs or exhibitions; this is a fairly expensive way of promoting your business. Therefore, sound advice says only give away samples to those people who are likely to buy.
If you have a service, you could give all or part of the service away for free as part of a trial. One way of making samples more compelling is to have a limited number; therefore, potential consumers or business partners will need to be proactive in order to get their sample.
Sales promotion is any initiative undertaken by an organisation to promote an increase in sales, usage or trial of a product or service (i.e. initiatives that are not covered by the other elements of the marketing communications or promotions mix). Sales promotions are varied.
(e) Free gifts e.g. Subway gave away a card with six spaces for stickers with each sandwich purchase. Once the card was full the consumer was given a free sandwich.
(f) Discounted prices e.g. Budget airline such as EasyJet and Ryanair, e-mail their customers with the latest low-price deals once new flights are released, or additional destinations are announced.
(g) Joint promotions between brands owned by a company, or with another company’s brands. For example fast food restaurants often run sales promotions where toys, relating to a specific movie release, are given away with promoted meals.
(h) Free samples (aka. sampling) e.g. tasting of food and drink at sampling points in supermarkets. For example Red Bull (a caffeinated fizzy drink) was given away to potential consumers at supermarkets, in high streets and at petrol stations (by a promotions team).
(i) Vouchers and coupons, often seen in newspapers and magazines, on packs.
(j) Competitions and prize draws, in newspapers, magazines, on the TV and radio, on The Internet, and on packs.
(k) Cause-related and fair-trade products that raise money for charities, and the less well off farmers and producers, are becoming more popular.
(l) Finance deals – for example, 0% finance over 3 years on selected vehicles.
Many of the examples above are focused upon consumers. Don’t forget that promotions can be aimed at wholesales and distributors as well. These are known as Trade Sales Promotions. Examples here might include joint promotions between a manufacturer and a distributor, sales promotion leaflets and other materials (such as T-shirts), and incentives for distributor sales people and their retail clients.
Often they are original and creative, and hence a comprehensive list of all available techniques is virtually impossible (since original sales promotions are launched daily!). Here are some examples of popular sales promotions activities:
(a) Buy-One-Get-One-Free (BOGOF) – which is an example of a self-liquidating promotion. For example if a loaf of bread is priced at $1, and cost 10 cents to manufacture, if you sell two for $1, you are still in profit – especially if there is a corresponding increase in sales. This is known as a PREMIUM sales promotion tactic.
(b) Customer Relationship Management (CRM) incentives such as bonus points or money off coupons. There are many examples of CRM, from banks to supermarkets.
(c) New media – Websites and mobile phones that support a sales promotion. For example, in the United Kingdom, Nestle printed individual codes on KIT-KAT packaging, whereby a consumer would enter the code into a dynamic website to see if they had won a prize. Consumers could also text codes via their mobile phones to the same effect.
(d) Merchandising additions such as dump bins, point-of-sale materials and product demonstrations.
Public relations as part of the marketing communications mix
Public Relations (PR) is a single, broad concept. It is broad since it contains so many elements, many of which will be outlined in this lesson. Public Relations (PR) are any purposeful communications between an organisation and its publics that aim to generate goodwill.
Speeches, presentations and speech writing.
Key figures from within an organisation will write speeches to be delivered at corporate events, public awards and industry gatherings. PR company officials in liaison with company managers often write speeches and design corporate presentations. They are part of the planned and coherent strategy to build goodwill with publics. Presentations can be designed and pre-prepared by PR companies, ultimately to be delivered by company executives.
Corporate literature e.g. financial reports.
Corporate literature includes financial reports, in-house magazines, brochures, catalogues, price lists and any other piece of corporate derived literature. They communicate with a variety of publics. For example, financial reports will be of great interest to investors and the stock market, since they give all sorts of indicators of the health of a business. A company Chief Executive Officer CEO will often write the forward to an annual financial report where he or she has the opportunity to put a business case to the reader. This is all part of Public Relations.
Publics, put simply, are its stakeholders. PR is proactive and future orientated, and has the goal of building and maintaining a positive perception of an organisation in the mind of its publics. This is often referred to as goodwill.
Yes it is difficult to see the difference between marketing communications and PR since there is a lot of crossover. This makes it a tricky concept to learn. Added to this is the fact that PR is often expensive, and not free, as some definitions would have you believe. PR agencies are not cheap. Below are some of the approaches that are often considered under the PR banner.
Interviews and photo-calls.
It is important that company executives are available to generate goodwill for their organisation. Many undertake training in how to deal with the media, and how to behave in front of a camera. There are many key industrial figures that proactively deal with the media in a positive way for example Bill Gates (Microsoft) or Richard Branson (Virgin). Interviews with the business or mass media often allow a company to put its own perspective on matters that could be misleading if simply left to dwell untended the public domain.
Public relations as part of the marketing communications mix
This has a direct business payoff. A more informal event could include a day at the races or a short-break abroad, where clients are wined and dined at the cost of a company, in order to generate goodwill. This has an indirect business payoff.
Sponsorship and charitable donations.
Sponsorship is where an organisation pays for their product or service to be associated with an activity or event. Organisations commonly sponsor sporting events and such as The Olympics, sporting stars and other celebrities, or medium, for example television programmes. The sponsors gain exposure, and also align their product or service with the attributes of the sport, celebrity or medium.
Many companies (often those in profit!) make donations to charities and good causes. When donations are publicised, again the benefits generate goodwill for the organisation. It should be noted here that Microsoft’s Bill Gates donates substantial amounts to good causes that are often not reported. This is true corporate philanthropy.
Corporate events are used to woo publics in both a formal and an informal manner. A formal corporate event could include a manufacturer inviting employees from all of its many distributors to visit its manufacturing plant for a training day.
Visits to a factory, such as a chocolate factory, or a facility, such as a nuclear power plant also generate a positive perception of an organisation. In the case of a factory visit, loyal customers or other interested parties can experience for themselves what is behind a well-known product. In the case of a nuclear power plant, concerned or misinformed publics have the chance to see for themselves what really occurs behind locked doors. Here the organisation has the chance to deal with a delicate topic in a planned proactive manner. Public buildings such as parliament buildings or churches would be included under facility visits.
Publicity events and ‘stunts.’
Publicity events fall under the banner of guerrilla marketing. Here an organisation will take the opportunity to seize upon a particular moment to hijack public attention. Publicity events and stunts are practiced by both companies and private bodies (including pressure and political groups). A famous example of a publicity stunt was one conducted by Fathers For Justice (a British pressure group for divorced fathers), whereby individuals, dressed as Superheroes, invaded Buckingham Palace in London.
Promotion is the marketing term used to describe all marketing communications activities and includes personal selling, sales promotion, public relations, direct marketing, trade fairs and exhibitions, advertising and sponsorship. Promotion needs to be precisely coordinated and integrated into the businesses global communications message, and this is called Integrated Marketing Communications (IMC). IMC integrates the message through the available channels to deliver a consistent and clear message about your company’s brands, products and services. Any movement away from the single message confuses the consumer and undermines the brand.
The promotions mix (the marketing communications mix) is the specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships.
Kotler et al (2010).
Promotion is the element of the marketing mix which is entirely responsible for communicating the marketing proposition. Marketers work hard to create a unique marketing proposition for their product or service. McDonald’s is about community, food and enjoyment. Audi is about the driver experience and technology.
Think of it like a cake mix, the basic ingredients are always the same. However if you vary the amounts of one of the ingredients, the final outcome is different. It is the same with promotions. You can integrate different aspects of the promotions mix to deliver a unique campaign. Now let’s look at the different elements of the promotions mix.
The elements of the promotions mix are:
Trade Fairs and Exhibitions.
And also online promotions.
The elements of the promotions mix are integrated to form a coherent campaign. As with all forms of communication, the message from the marketer follows the ‘communications process’ as illustrated above. For example, a radio advert is made for a car manufacturer. The car manufacturer (sender) pays for a specific advert with contains a message specific to a target audience (encoding). It is transmitted during a set of commercials from a radio station (message/medium).
The message is decoded by a car radio (decoding) and the target consumer interprets the message (receiver). He or she might visit a dealership or seek further information from a web site (Response). The consumer might buy a car or express an interest or dislike (feedback). This information will inform future elements of an integrated promotional campaign. Perhaps a direct mail campaign would push the consumer to the point of purchase. Noise represents the thousands of marketing communications that a consumer is exposed to everyday, all competing for attention.
The Promotions Mix.
Let us look at the individual components of the promotions mix in more detail. Remember all of the elements are ‘integrated’ to form a specific communications campaign.
1. Personal Selling.
Personal Selling is an effective way to manage personal customer relationships. The sales person acts on behalf of the organization. They tend to be well trained in the approaches and techniques of personal selling. However sales people are very expensive and should only be used where there is a genuine return on investment. For example salesmen are often used to sell cars or home improvements where the margin is high.
2. Sales Promotion.
Sales promotions tend to be thought of as being all promotions apart from advertising, personal selling, and public relations. For example the BOGOF promotion, or Buy One Get One Free. Others include couponing, money-off promotions, competitions, free accessories (such as free blades with a new razor), introductory offers (such as buy digital TV and get free installation), and so on. Each sales promotion should be carefully costed and compared with the next best alternative.
3. Public Relations (PR).
Public Relations is defined as ‘the deliberate, planned and sustained effort to establish and maintain mutual understanding between an organization and its publics’ (Institute of Public Relations). PR can be relatively cheap, but it is certainly not free. Successful strategies tend to be long-term and plan for all eventualities. All airlines exploit PR; just watch what happens when there is an incident. The pre-planned PR machine clicks in very quickly with a very effective rehearsed plan.
4. Direct Marketing.
Direct marketing is any marketing undertaken without a distributor or intermediary. In terms of promotion it means that the marketing company has direct communication with the customer. For example Nintendo distributes via retailers, although you can register directly with them for information which is often delivered by e-mail or mail.
Direct mail is very highly focussed upon targeting consumers based upon a database. As with all marketing, the potential consumer is targeted based upon a series of attributes and similarities. Creative agencies work with marketers to design a highly focussed communication in the form of a mailing. The mail is sent out to the potential consumers and responses are carefully monitored. For example, if you are marketing medical text books, you would use a database of doctors’ surgeries as the basis of your mail shot.
Similarly e-mail is a form of online direct marketing. You register, or opt in, to join a mailing list for your favourite website. You confirm that you have opted in, and then you will receive newsletters and e-mails based upon your favourite topics. You need to be able to unsubscribe at any time, or opt out. Mailing lists which generate sales are like gold dust to the online marketer. Make sure that you use a mailing list with integrity just as you would expect when you sign up. The mailing list needs to be kept up-to-date, and often forms the basis of online Customer Relationship Management (CRM).
5. Trade Fairs and Exhibitions.
Such approaches are very good for making new contacts and renewing old ones. Companies will seldom sell much at such events. The purpose is to increase awareness and to encourage trial. They offer the opportunity for companies to meet with both the trade and the consumer.
Advertising is a ‘paid for’ communication. It is used to develop attitudes, create awareness, and transmit information in order to gain a response from the target market. There are many advertising ‘media’ such as newspapers (local, national, free, trade), magazines and journals, television (local, national, terrestrial, satellite) cinema, outdoor advertising (such as posters, bus sides). There is much more about digital, online and Internet advertising further down this pages, as well as throughout Marketing Teacher and the Marketing Teacher Blog.
Sponsorship is where an organization pays to be associated with a particular event, cause or image. Companies will sponsor sports events such as the Olympics or Formula One. The attributes of the event are then associated with the sponsoring organization.
The elements of the promotional mix are then integrated to form a unique, but coherent campaign.
Online promotions will include many of the promotions mix elements which we considered above. For example advertising exists online with pay per click advertising which is marketed by Google. You can sponsor are website for example. Online businesses regularly send out newsletters which are targeted using e-mail and mailing lists, which is a form of direct marketing. Indeed websites are premium vehicle in the public relations industry to communicate particular points of view to relevant publics.
The online promotions field is indeed emerging. The field will soon spread into Geo targeting of adverts to people in specific locations via smart phones. Another example would be how social media targets adverts to you whilst you socialising online. Take a look at Marketing Teacher’s Blog for more up-to-date examples of the emerging online promotions space.
Public relations as part of the marketing communications mix
Product placement in media.
This is an interesting and original use of PR. There are very many examples in movies and TV programmes that ‘place’ products.
Media conferences are called often at short notice to inform the media directly on a current event that has just happened, or that is about to happen. Media contact includes interviews with key personnel, and could include speeches, presentations and speech writing by the PR company. Finally entertaining the press, or media, is undertaken when trying to gain as much media space as possible. This could be for a product launch or to promote an acquisition.
Advertorials in newspapers, magazines or on websites.
Advertorials are paid for advertisements that are designed to appear like copy (i.e. normal reported text). Many countries insist that advertorials do contain a line of text to explain that they are sponsored or placed by an advertiser. Advertorials are often used to imply that some ground breaking treatment or solution has been uncovered.
Corporate promotional materials, websites, in-house magazines and customer magazines.
The market for promotional materials is large. Promotional materials include items such as pens, balloons, mouse mats, and so on. They tend to carry a company’s logo and contact details, and are another way to promote goodwill between and organisation and its publics. Websites are a vital marketing communications and public relations tool that can convey information to publics on how to contact an organisation, key personnel, products and services, corporate history, and financial reports, as well as any other targeted and planned information.
In-house magazines are used for internal marketing, communication and change management from within the organisation. In-house magazines are targeted at internal publics. Conversely, customer magazines help organisations to communicate with external publics (mainly customers) on all sorts of topics such as good news stories, product launches, customer clubs and many other subjects.
For example, a car manufacturer places a car in a movie and the hero drives it, or wears a watch that is looked at by the villain displaying the time, underscored by the manufacturer’s logo. Today, computer games include banners and posters during game-play as the action unfolds. Examples of product placement in games would include field sports with adverts placed alongside a pitch, or car racing games where you pass billboards displayed in a city.
Lobbying government bodies.
Lobbying is named after the ‘lobby’ area of the British Houses of Parliament where traditionally ‘lobbying’ would have occurred. Lobby in the past would have meant catching the eye of a Member of Parliament, in order to persuade him or her to take up a particular cause or argument. Today, lobbying firms are hired by organisations or individuals with a specific cause to promote. For example, a charity could lobby for a change in laws regarding pharmaceuticals or armaments. The charity would hire a lobbying firm to promote their cause with elected politicians.
Press or media releases, conferences, contact and entertainment.
Press or media releases, conferences, contact and entertainment are pivotal Public Relations strategies. In the past, the press were the original target (e.g. newspapers and magazines) but today the whole media industry forms the target (i.e. radio, websites, TV, New Media and so on). Media releases are drafted by a PR company, for example, to report financial information prior to the release of company reports.
Marketing communications is a subset of the overall subject area known as marketing. Marketing has a marketing mix that is made of price, place, promotion, product (know as the four P’s), that includes people, processes and physical evidence, when marketing services (known as the seven P’s).
Integrated marketing communications see the elements of the communications mix ‘integrated’ into a coherent whole. This is known as the marketing communications mix, and forms the basis of a marketing communications campaign.
How does marketing communications fit in? Marketing communications is ‘promotion’ from the marketing mix.
Why are marketing communications ‘integrated?’ Integrated means combine or amalgamate, or put simply the jigsaw pieces that together make a complete picture. This is so that a single message is conveyed by all marketing communications. Different messages confuse your customers and damage brands. So if a TV advert carries a particular logo, images and message, then all newspaper adverts and point-of-sale materials should carry the same logo, images or message, or one that fits the same theme. Coca-Cola uses its familiar red and white logos and retains themes of togetherness and enjoyment throughout its marketing communications.
Marketing communications has a mix. Elements of the mix are blended in different quantities in a campaign. The marketing communications mix includes many different elements, and the following list is by no means conclusive. It is recognised that there is some cross over between individual elements (e.g. Is donating computers to schools, by asking shoppers to collect vouchers, public relations or sales promotion?) Here are the key of the marketing communications mix.
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The loyalty ladder is a tool for marketing communicators. The idea is that consumers can be moved along a continuum of loyalty using a number of integrated marketing communications techniques (it is also referred to as a branding ladder).
Example – Tesco PLC.
In the United Kingdom Tesco plc is by far the most successful company in regard to relationship marketing. There are number of reasons for this which would include loyalty programmes, consistently adding value at every customer touch point, and making it difficult for customers to actually end the relationship. Let’s have a look at an example of each. The Tesco loyalty scheme or loyalty program is called the Tesco Clubcard. The card is scanned every time that there is a transaction. So data is ‘grabbed’ and recorded from each customer. Here we have a highly developed customer database. Customers are sent coupons which are strongly connected to their buying habits, based upon Tesco’s knowledge of other customers. As you leave the till after payment you are given money-off coupons for petrol so that you can fill your car when you leave for home. This consistently adds value to your experience as a customer. Since a British consumer now heads for a Tesco village to do his/her weekly shopping, it is difficult to swap to another store or to go back to shopping in smaller shops. The relationship is difficult to break.
Essentially, consumers become loyal to a brand which has meaning to them in relation to a product, service, solution or experience.
As with continuums of behaviour such as UACCA – Unawareness, Awareness, Comprehension, Conviction, Action, or AIDA – Awareness, Interest, Desire, Action, the loyalty ladder begins from a point where the consumer has Not Yet Purchased, then he or she buys the product for the first time (Trialist), if the trial has been a success he or she returns to buy again and again (Repeat Purchaser) and finally the consumer buys no other brand (Brand Insistent).
At the Not Yet Purchased Stage the consumer is merely a Prospect. As he or she trials they become a Customer. The Repeat Purchaser is a Client since he or she is becoming loyal. Finally, the consumer becomes an Advocate (i.e. activist or campaigner) since he or she is Brand Insistent. At this point the brand is difficult to dislodge since it has so much meaning to the consumer. Great brands such as Nike, BMW, Rolls-Royce, and Apple are in this highly desirable position.
The idea is to move your prospect along the loyalty ladder to the point where there are partner. Marketing activities support relationships with external customers. So there will be directly indications and measurement of the results between the marketer and the customer as he or she moves along the loyalty ladder. Both the loyalty ladder and the Pareto principle are useful because they aid customer retention and loyalty.
A Branding Strategy Based upon Brand Franchise Extension (Tauber 1981)
A marcoms tool that a marketer can employ for branding decision-making is the Four Banding Alternatives (Tauber 1981). Four Branding Alternatives is a strategic marketing communications technique.
Edward M. Tauber, ‘Brand Franchise Extension: New Product Benefits from Existing Brand Names,’ Business Horizons, vol. 24 (March-April 1981), p37.
It is a fun and creative approach that can add value to any class that likes to discuss brands and how they could be innovatively developed. It is used when an organization considers adding a product to its portfolio and its associated brand name. The two variables for this matrix are Product Category (Existing or New) and Band Category (Existing or New).
New Product – a new product is developed with a series of new brand ideas and meanings to the consumer.
Flanker Brand – a new brand is introduced into a category where the organization already has established products.
Line Extension – a current brand name is introduced into a category where the organization already has established products.
Franchise Extension – a familiar brand is taken to a product category where it is unknown.
Here’s an example. Firstly let’s recall that Four Branding Alternatives is a strategic tool, so you need to base it upon a very large organisation which is likely to own a number of brands.
Examples would include car manufacturers, large IT companies, and conglomerates. You get the idea.
An example for the Japanese company, Sony Inc is as follows:
New Product – Sony enters the market for music downloads under a new sub-branding idea and concept.
Flanker Brand – Sony introduces the Sony Vaio laptops (as it indeed has).
Line Extension – Sony enter the market for digital HD TV’s (as it has).
Franchise Extension – Sony enters the market for innovative environmentally friendly small cars that run on solar power.
Advertising is an important element of the marketing communications mix. Put simply, advertising directs a message at large numbers of people with a single communication. It is a mass medium.
Planning for advertising
Advertising agencies and their clients plan for advertising. Any plan should address the following stages:
Who is the potential TARGET AUDIENCE of the advert?
WHAT do I wish to communicate to this target audience?
Why is this message so IMPORTANT to them?
What is the BEST MEDIUM for this message to take (see some of the possible media above)?
What would be the most appropriate TIMING?
What RESOURCES will the advertising campaign need?
How do we CONTROL our advertising and monitor success?
There are two key categories of advertising, namely ‘above-the-line’ and ‘below-the-line.’ The definitions owe a lot to the historical development of advertising agencies and how they charge for their services. In a nutshell, ‘above-the-line’ is any work done involving media where a commission is taken by an advertising agency, and ‘below-the-line’ is work done for a client where a standard charge replaces commission. So TV advertising is ‘above-the-line’ since an agency would book commercial time on behalf of a client, but placing an advert in a series of local newspapers is ‘below-the-line,’ because newspapers tend to apply their own costing approach where no commission is taken by the agency i.e. instead the agency charges the client a transparent fee. There are many facets and elements to advertising – too many to be covered in this short lesson. Try some of the other lessons to build your knowledge.
Advertising has a number of benefits for the advertiser. The advertiser has control over the message. The advert and its message, to an extent, would be designed to the specifications of the advertiser. So the advertiser can focus its message at a huge number of potential consumers in a single hit, at a relatively low cost per head. Advertising is quick relative to other elements of the marketing communications mix (for example personal selling, where an entire sales force would need to be briefed – or even recruited). Therefore an advertiser has the opportunity to communicate with all (or many of) its target audience simultaneously.
An advertising agency handles part or all marketing communications activities on behalf of a client organization. The agencies themselves tend to vary in size from small, perhaps a handful of people, to vast – where many thousands of employees make up the company. A commission is generally taken by the agency which tends to be taken from the media purchases of the client organisation.
Traffic and Production Team.
The traffic and media team are in charge of the production of the physical and artistic output, i.e. the marketing communication. In the case of a TV advert, they would commission scripts, recruit a ctors (mainly via agents), film crews and supporting activities (such as costumes and catering). All ads are different and so the specifics will vary. In the case of print advertising, the traffic and production team would commission and sign-off all printed advertising material such as direct marketing materials, magazine ads or posters.
Account Planning Team.
The account planning team work on the ‘customer’s’ perspective, and take an outward look at the world. They support the creative teams by supplying data and opinion on what I actually occurring in the marketing in which advertising is to be placed. They tend to use secondary data to support decisions, and would rarely commission original research. However, with material supplied my organisations such as Mori, Datamonitor, ACORN, and other – the account planning team can build an image of segments to help the creatives.
The media team will organise the timing and scheduling of the marketing communications campaign. They will look at the range of media to be exploited, and then look at the best slots in which to run advertising. They will help a client to decide upon the duration of and individual slot, and how many of them to run. Here the expense and return to the client are key factors that influence decision-making. The two main skills of the media team are media planning and media buying. Today there is a wealth of data on which media buying can be based. There is software for planning and simulation.
This is done rather like a theatrical agent would take a percentage of the income of an actor for whom employment had been found. The agency may also take payment from the media owners (i.e. sometimes take a discount and do not pass it on to the client). More transparent means of payment are becoming more popular, with some agencies being paid-by-results.
There are many types of agency, but it is generally accepted that the main ones are include full-service agency, a la carte agency, or specialist agency. A full-service agency will take on the whole project or campaign. An a la carte agency will offer some aspects of a campaign such as media buying, rather like buying items from a menu. A specialist agency tends to be small and more focused on a specific aspect of marketing communications and/or a specific market such as Internet Marketing.
A Full-Service Agency will offer:
Traffic and production.
Account managers work for an agency with the client (an agency’s customers are called ‘clients’). Very often they will spend a lot of time with the client working as part of their marketing team. This is one way in which an agency works closely with its client and why the ‘chemistry’ between a client and its agency needs to be right. The account manager makes sure that the correct information is passed from the client to the other members of the agency. He or she is a co-ordinator and time manager. The account planner will work on a brief that is fed back to the agency team.
The first internal agency team members to see the brief tend to be the creatives and the media planners. The brief contains a ‘proposition’ that the client wishes to communicate to the target audience. The creative team will transform the proposition into something exciting and attractive to the target audience. The creative team decide upon the ‘creative concept.’ This will be a motivational idea. The words used to express the creative concept are called ‘copy.’ The images, pictures and diagrams are created i.e. the ‘design’ or ‘layout.’ This is done by ‘designers’ and ‘copywriters.’ Beware some creatives! Creatives tend to be artistic and innovative. Hence their advice should be highly regarded and any criticism should be constructive.
Personal selling occurs where an individual salesperson sells a product, service or solution to a client. Salespeople match the benefits of their offering to the specific needs of a client. Today, personal selling involves the development of longstanding client relationships.
A Five Stage Personal Selling Process.
Stage One – Prospecting.
Prospecting is all about finding prospects, or potential new customers. Prospects should be ‘qualified,’ which means that they need to be assessed to see if there is business potential, otherwise you could be wasting your time. In order to qualify your prospects, one needs to:
Plan a sales approach focused upon the needs of the customer.
Determine which products or services best meet their needs.
In order to save time, rank the prospects and leave out those that are least likely to buy.
Stage Two – Making First Contact.
This is the preparation that a salesperson goes through before they meet with the client, for example via e-mail, telephone or letter. Preparation will make a call more focused.
Make sure that you are on time.
Before meeting with the client, set some objectives for the sales call. What is the purpose of the call? What outcome is desirable before you leave?
Make sure that you’ve done some homework before meeting your prospect. This will show that you are committed in the eyes of your customer.
To save time, send some information before you visit. This will wet the prospect’s appetite.
Keep a set of samples at hand, and make sure that they are in very good condition.
Within the first minute or two, state the purpose of your call so that time with the client is maximised, and also to demonstrate to the client that your are not wasting his or her time.
Humour is fine, but try to be sincere and friendly.
Stage Three – The Sales Call (or Sales Presentation).
It is best to be enthusiastic about your product or service. If you are not excited about it, don’t expect your prospect to be excited.
Focus on the real benefits of the product or service to the specific needs of your client, rather than listing endless lists of features.
Try to be relaxed during the call, and put your client at ease.
Let the client do at least 80% of the talking. This will give you invaluable information on your client’s needs.
Remember to ask plenty of questions. Use open questions, e.g. TED’s, and closed questions i.e. questions that will only give the answer ‘yes’ or the answer ‘no.’ This way you can dictate the direction of the conversation.
Never be too afraid to ask for the business straight off.
Stage Four – Objection Handling.
Objection handling is the way in which salespeople tackle obstacles put in their way by clients. Some objections may prove too difficult to handle, and sometimes the client may just take a dislike to you (aka the hidden objection). Here are some approaches for overcoming objections:
Firstly, try to anticipate them before they arise.
‘Yes but’ technique allows you to accept the objection and then to divert it. For example, a client may say that they do not like a particular colour, to which the salesperson counters ‘Yes but X is also available in many other colours.’
Ask ‘why’ the client feels the way that they do.
‘Restate’ the objection, and put it back into the client’s lap. For example, the client may say, ‘I don’t like the taste of X,’ to which the salesperson responds, ‘You don’t like the taste of X,’ generating the response ‘since I do not like garlic’ from the client. The salesperson could suggest that X is no longer made with garlic to meet the client’s needs.
The sales person could also tactfully and respectfully contradict the client.
Stage Five – Closing the Sale.
This is a very important stage. Often salespeople will leave without ever successfully closing a deal. Therefore it is vital to learn the skills of closing.
Just ask for the business! – ‘Please may I take an order?’ This really works well.
Look for buying signals (i.e. body language or comments made by the client that they want to place an order). For example, asking about availability, asking for details such as discounts, or asking for you to go over something again to clarify.
Just stop talking, and let the client say ‘yes.’ Again, this really works.
The ‘summary close’ allows the salesperson to summarise everything that the client needs, based upon the discussions during the call. For example, ‘You need product X in blue, by Friday, packaged accordingly, and delivered to your wife’s office.’ Then ask for the order.
The ‘alternative close’ does not give the client the opportunity to say no, but forces them towards a yes. For example ‘Do you want product X in blue or red?’ Cheeky, but effective.
So this is the Five Stage Personal Selling Process. Now have a go at it yourself by completing the lesson.
In comparison to other marketing communications tools such as advertising, personal selling tends to:
Use fewer resources, pricing is often negotiated.
Products tend to be fairly complex (e.g. financial services or new cars).
There is some contact between buyer and seller after the sale so that an ongoing relationship is built.
Client/prospects need specific information.
The purchase tends to involve large sums of money.
There are exceptions of course, but most personal selling takes place in this way. Personal selling involves a selling process that is summarised in the following Five Stage Personal Selling Process. The five stages are: