Marketing and Promotions Study Notes

PROMOTION?

• Promotion is a key area of marketing.

• Includes activities like advertising, direct mail, merchandising, public relations, online communication, and sales efforts.

• Involves actions sellers take to inform and persuade customers to buy their products or services.

• Marketing strategies aim to inform potential customers and convince them to make a purchase.

• Goal is to close the sale.

• Simply making people aware of a product isn't enough.

• Customers need to like it enough to buy it and be satisfied enough to buy it again.

• Ideally, customers will recommend the product to others.

WHAT IS ADVERTISING?

• Advertising is any paid method of communicating about a business, product, service, or idea from a known sponsor.

• It is a form of mass communication that requires payment.

• This approach can quickly reach a large audience.

• Includes messages seen on TV, radio, newspapers, magazines, billboards, public transport, and online platforms.

• Online advertising options consist of banner ads, skyscraper ads, and pay-per-click ads.

• In the hospitality sector, advertising helps build and maintain awareness of a company, property, or destination.

• Not every tourism product or service will gain from advertising.

• It's important to evaluate resources and goals before using advertising as a promotional tool.

• Large businesses like hotels, fast-food chains, and popular destinations can benefit from a well-thought-out advertising plan.

OBJECTIVE OF ADVERTISING?

• An advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period.

• Advertising can be classified based on its objectives:

  • Informative advertising: Used to introduce a new product or to build up primary demand for the product.

    • Companies employ aggressive tools to ensure that a new product creates excitement and demand within its target market.

  • Persuasive advertising: Used when competition is stiff.

    • Companies rely on persuasive advertising to be able to keep their market share.

  • Reminder advertising: Very important for products that have reached the maturity stage.

    • Products attempt to maintain market position even if they are already top of mind.

ADVANTAGE OF DIRECT MARKETING:

• Privacy: The company's offer is not visible to competitors since it is personalized.

  • The competition will not be able to monitor what the offer is; hence, they will not be able to match it.

• Faster Sales: Direct marketing can yield faster sales since it is targeted to actual users of the product.

• Variety of Packaging Options: A variety of packaging options are available for direct mail campaigns limited only by the marketer's creativity and budget.

• Less Competition (from other media content): A letter or package that is opened by the prospect will have less competition from other media content compared to billboards, TV commercials, and the like.

  • The receiver would take more time reading through your content because it is personalized and unique.

• Immediate Results: A response form or action is normally solicited from the prospective customer; hence, results can be immediate.

• Measurability: The company knows the number of direct mailers issued; hence, it will be easy to determine response rates.

PERSONAL SELLING:

• Sales representatives serve as the connection between the company and its customers.

• They embody the business in the eyes of clients, shaping their perceptions based on their own image and behavior.

• Personal selling is the direct interaction between a salesperson and a potential customer, where needs are addressed in return for money or resources.

• As employees of the company, sales professionals receive salaries, benefits, and various allowances, making them a costly means of communication for the business.

• However, the ability to engage in face-to-face interactions fosters relationship building and feedback, making personal selling a highly effective strategy in the tourism sector.

TYPES OF ADVERTISING EXECUTION

• For advertising to achieve its objectives of differentiation, making the product tangible, and having positive effects on employees and customers, Kotler presents different execution styles as follows:

  • Slice of Life - shows how people use the product in a normal setting.

  • Lifestyle - shows how the product fits with one's way of life.

  • Fantasy - creates a "wonder" world around the product or its use.

  • Mood or image - builds positive images or moods around the product such as beauty, love, fun, and serenity.

  • Musical - uses simple but catchy music effectively through product jingles or songs.

  • Personality - creates a character that represents the product such as Jollibee, the friendly bee.

  • Technical expertise - reveals the company's expertise with the product or service.

  • Scientific evidence - presents research or scientific evidence that the brand is better than competing brands.

  • Testimonial evidence - features a highly credible person such as a celebrity endorsing the product.

DIRECT MARKETING:

• With the moving away of marketing from advertising to the integrated marketing communications approach, direct marketing has gained prominence and acceptance.

• In the field of tourism marketing, which focuses on niche markets, the direct marketing approach is widely used.

• Direct marketing is an interactive system of marketing that uses one or more advertising media to affect a measurable response.

• It seeks to establish continuing relationships between a company and its regular customers.

• Offers are sent to a customer database of people who are most able, willing, and ready to buy the product.

ADVANTAGE OF DIRECT MARKETING:

• Direct marketing is an ideal promotional tool for products and services that want to capture a niche market. Here are some advantages of direct marketing:

  • Precision Targeting: Having a good database can help pinpoint prospects based on the prospects' lifestyles, demographics, purchasing patterns, etc.

    • The direct mail campaign can be very precise in specifying its target market.

  • Personalized Messages: A person's name is the sweetest word in the world.

    • Prospective customers will definitely read through the material when their name is on it.

    • Addressing specific customers personally will better capture their attention than generic and random messages.

PERSONAL SELLING:

• Sales representatives are an integral part of the success of the tourism and hospitality industry.

• Kotler outlines the primary tasks sales professionals perform for their companies as follows:

  • Prospecting: The sales professional is tasked to investigate potential customers or "prospects."

    • A good and active database should be maintained as well as networking skills to ensure that there is a steady flow of new customers coming into the business.

    • Some sales personnel are pirated from competitors mainly because they already have a relationship with the customers availing of the services of the competition.

  • Targeting: Sales professionals need to determine how to prioritize their limited time and resources to tap customers from their list of prospects.

  • Communicating: A constant stream of communication should flow from customer to client and vice versa.

    • Sales personnel need to find ways and means to stay connected with clients.

    • This can be done by giving information about new products and services or generating new business from clients.

PERSONAL SELLING:

• Selling: Sales personnel are trained to do product presentations, to negotiate, to overcome objections, and to close the sale.

  • This is the core of what the salesperson does for the company.

• Servicing: Salespersons should not remain as order takers.

  • Instead, they should shift to becoming customer consultants- helping clients solve problems and rendering technical / expert assistance.

• Information Gathering: Sales representatives assist the company in gathering intelligence information such as what the competition is doing or what the company's needs are.

  • They also suggest innovations based on market demands.

• Allocating: When there are product shortages or overbookings, salespeople assist in deciding which clients to prioritize based on past and future business engagements.

SELECTING SALES STRATEGIES:

• Protect Key Accounts: Focus on key clients who drive the business.

  • Give them priority and find ways to increase their spending and loyalty.

  • Train salespeople to prevent these clients from moving to competitors.

• Expand Key Accounts: Identify promising clients who could become major accounts.

  • Invest in growing these relationships to increase revenue.

• Develop Marginal Accounts: When key accounts are slow, focus on secondary accounts with potential to boost sales.

• Cut Unprofitable Accounts: Drop accounts that aren't bringing in revenue, freeing up resources to focus on more profitable clients.

• Retain Low-Cost Marginal Accounts: Keep accounts that are easy and inexpensive to manage, as they can still bring in some sales without high costs.

• Pursue New Prospects: Always prioritize finding new business.

  • Both new accounts and more business from current accounts help drive growth.

PUBLIC RELATIONS

• Public relations (PR) involves building a positive image and customer loyalty through endorsements from others.

• It is a crucial marketing tool for entrepreneurs.

• This can be achieved through various activities that focus on how others perceive a business.

• PR relies on the belief that if a trustworthy person, who is not connected to the business, praises a product or service, consumers are more likely to trust its quality.

• Communication with the public includes both internal and external audiences.

  • The internal audience consists of employees and investors.

    • Employees should have a positive view of the company and believe in the benefits of its products, showing enthusiasm for what they represent.

    • Good relations with investors can also positively impact the business.

  • The external audience includes customers, potential customers, the media, the local community, and government entities.

    • Maintaining strong PR with these groups can enhance the brand's image and future business opportunities.

MAJOR PUBLIC RELATIONS ACTIVITIES:

• Press/Media Relations: Use mass media to create publicity and awareness with minimal cost.

  • Since media coverage is external, the business doesn't control the final message.

• Product Publicity: Promote new products, events, or updates through endorsements and mentions in various media channels.

• Corporate Communications: Share information internally and externally to build understanding and support for the organization.

  • Internal communications might include employee updates, while external messages focus on promotions and events for clients and stakeholders.

• Lobbying: PR includes building positive relationships with local government and legislators who may pass laws impacting the business.

• Counseling: PR staff advise on public issues that could affect the company's image.

  • During crises, the PR manager acts as the company's spokesperson.

PUBLIC RELATIONS PROCESS:

• Understand the Company: Know the company's mission, culture, and target market through research to build an effective PR plan.

• Set Objectives: Define goals, such as raising product awareness, building brand credibility, boosting sales, or reducing promotion costs.

• Define the Target Market: Identify and understand your target audience, including their communication habits and purchasing influences.

• Design the PR Message: Develop a message strategy and choose effective communication channels to reach your target market.

• Implement the PR Plan: Put the plan into action, with ongoing monitoring and adjustments.

• Evaluate Results: Measure the campaign's success by checking brand exposure, changes in awareness or attitude, and impact on sales and profits.