Professional Documents
Culture Documents
Unit III
Communication Process
Sender -> message content, structure, format, source Message Encoded -> Decoded -> Receiver
Media Selection
Response Selective Attention Design msg to win attention Selective Distortion Selective Recall Relate msg with long Prevent distortion by term memory keeping msg simple & clear
Deciding Promotion-mix
Advertising Sales promotion PR Personal selling Direct marketing
Advertising
Advertising is any paid form of non-personal presentation & promotion of ideas, goods or services by an identified sponsor. Advertising is a cost effective way to disseminate messages, to build brand preference & to educate people.
Advertising goals pertain to sales, image, attitude & awareness.
Role of Advertising
Attention to bring the existence of companys product in the attention of the target segment. Interest to create interest in the product by focusing on attributes, which is of interest to the consumers. Desire to persuade them to make purchase, to stimulate demand for their product. Action final purchase or not-to-use stage. The buyer decides finally, to make the purchase (action) or not to make the purchase (no action i.e. not stimulated by the advertisement).
5 Ms of Advertising
Mission: Money: factors to consider
Sales goals and Advertising objectives
Stage in PLC, Market share and Consumer base, Competition, Advertising frequency, Product suitability generation, evaluation and selection, execution and review of message Reach, Frequency and Impact, type of media, timing, geographical coverage Communication impact and Sales impact
Message: Media:
Measurement:
Types of Advertising
Scientific Copy technical specifications of a product are explained.
E.g. Suffola low cholesterol edible oil
Communication-effect Research:
Seeks to determine whether an ad is communicating effectively, called as copy testing. It is done before and after the ad is put into media. It uses 3 methods to test advertising:
Direct rating method: asks consumers to rate alternative ads. Portfolio tests: asks consumers to view or listen to a portfolio of advertisements, taking as much time as they need. They are then asked to recall the ads and their content. Their recall level indicates an ads ability to stand out. Laboratory tests: use equipment to measure consumers physiological reactions heartbeat, blood pressure, pupil dilation, perspiration to an ad.
Sales-Effect Research
E.g. what sales are generated by an ad that increases brand awareness by 20% ad brand preference by 10%. It measures advertising results based on Share of Market against Advertising Expenditure. 2 Types to find out over-spending or under-spending:
Historical Approach: Correlating past sales to past advertising expenditure
Experimental Design: instead of spending normal % of advertising budget in all territories, company spends more in some and less in other territories. If the highspending tests produce substantial sales increase, it appears that company has been under-spending.
Sales Promotion
A diverse collection of incentive tools (coupons, samples) designed to stimulate quicker or greater purchase of companys products / services by the consumers.
Personal Selling
3 distinctive features:
Personal confrontation: Personal selling involves an alive, immediate, and interactive relationship between two or more persons. Each party is able to observe the others needs and characteristics at close hand and make immediate adjustments. Cultivation: Personal selling permits all kinds of relationships to spring up, ranging from a matter of fact-selling relationship to a deep personal friendship. Response: Personal selling makes the buyer feel under some obligation for having listened to the sales talk.
Direct Marketing
Many forms of direct marketing exists direct mail, telemarketing, electronic marketing. 4 characteristics:
Non-public: The message is normally addressed to a specific person. Customized: The message can be customized to appeal to the addressed individual. Up-to-date: A message can be prepared very quickly for delivery to an individual. Interactive: The message can be altered depending on the persons response.
Channels of Distribution
Channels of Distribution
Products must be brought to within reach of consumers for use or consumption. Any series of firms or individuals who participate in the flow of goods from producer to consumer/ final user, refers to as Marketing/ Distribution/Trade Channels. Distribution means availability of the product (for e.g. %age of total outlets reached) Distribution channels are sets of interdependent organisation involved in the process of making a product or service available for use or consumption.
Marketing channel involves transporters, stockiest, agents & merchants, sales force, advertising agencies etc. who helps in distribution process, are known as intermediaries or middlemen.
Types of Intermediaries:
Company Sales force: company owned / hired direct sales force, assigned to different territories to contact all prospects in the area, or develop sales in those regions. Manufacturers Agency: agents that represents & sells the goods of several manufacturers. Broker: Whose job is to bring together buyers and sellers and who does not carry inventory. Merchant: Who buys, takes title of goods and re-sells merchandise. Agent: works for commission and does not take title to the goods. Wholesaler: a business enterprise that sell goods/services to those who but for re-sale or business use.
M1
M2 D C M3 C
M+C=3+3=6
Middlemen are used because they oftentimes can perform certain functions more effectively than producers. For e.g. Maruti sells its cars through dealer outlest. Chewing Gum manufacturer would not find it practical to establish small retail gum shops. It would have to sell gum along with many other small products in the grocery store or drug store for extensive distribution.
2) Selective Distribution
usually more than a few amount of middlemen but not all of the middlemen who are willing to carry the manufacturers product. adequate market coverage with more control and less cost than intensive distribution. Selected intermediaries
3) Intensive Distribution
The manufacturer places the goods in as many as outlets as possible. Great intensity of distribution. Generally used for convenience items.
Economic criteria: each channel alternatives will produce a different level of sales and costs. Say, companys sales force who are better trained to sell but limited or very few within number whereas, a sales agency who have more representatives to make product sell; though not effectively trained. Control criteria: direct control is effective. However, sales agency is required for intensive distribution, the control problem is severe in such a case. Agents also may not have technical details of companys products.
The producer needs to seek channel structures and policies that maximize control and ability to change marketing strategy swiftly.