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 Promotion: function of informing,

persuading, and influencing the consumer’s
purchase decision
 Marketing Communications: transmission
from a sender to a receiver of a message
dealing with the buyer-seller

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 Integrated marketing communications
(IMC): Coordination of all promotional
activities – media advertising, direct mail,
personal selling, sales promotion, and
public relations – to produce a unified
customer-focused promotional message
 Success of any IMC program depends
critically on identifying the members of an
audience and understanding what they want

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Table : Relating Promotion to the Communications Process

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 Step 1: Identifying the Target Audience ( i.e
potential buyers of the products, current user,
deciders or influencers)
◦ Target audience will affects decisions
related to what, how, when, and
where message will be said, as well
as who will say it.

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 Step 2: Determining Communication
Objectives
 -The marketer either can be seeking a
cognitive, affective or behavioral response.
 -Marketers might want to put something in
consumer’s mind, change attitude or get
consumer to act.
 -Objectives may be set to move buyers
through the six readiness stages

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 Step 3:
Designing a Message
◦ AIDA framework guides
message design (attention, interest, desire and
action)
◦ Message content
 Rational – (product produce certain benefits-
quality, value or performance)
 Emotional appeals (+ve and –ve) - (fear,
humor, guilt, shame, love)
 Moral appeals ( audience’s what right and proper)

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 Step 3:
Designing a Message
◦ Message structure
 Draw a conclusion? (have (-ve) if too simple)
 One-sided or two-sided?( 1 sided that praise the products
more effective vs 2 side praise and shortcoming)
 Strongest arguments
presented first or last? (present the strongest arguments
first)
◦ Message format
◦ i.e Print Aid – communicator must decided on headline,
illustration and color.
◦ i.e Radio – choose the word, voice quality.
◦ i.e Television- facial expressions, body gesture


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 Step 4: Choosing Media
◦ Personal vs. non-personal communication
channels
◦ Personal communication channel involves two or
more persons communicating directly each other
(face to face, person to audience, telephone,
email)
◦ Non personal communication i.e media (print
media, broadcast, network, electronic and bill
board)

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 Step 5: Selecting the Message Source
◦ Message delivered by highly credible
sources are more persuasive.
◦ For financial products, the best
source will be the employee will be
the spoke person for the products.
◦ Spoke person must have the
credibility (expertise, trustworthiness
and likability)
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 Step 6: Collecting Feedback (measure the
result)
 -Measure its impact on the target audience.
(Recognize or recall the message, previous
and current attitudes towards the products
and behavioral measures of audience
response i.e bought, like and talk to the
others about the products.

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 In China: KFC’s slogan: “Finger lickin’
good” came out as “Eat your fingers off”
 Also in China: Coca-Cola had thousands of
signs made using the translation: “Ke-kou-
ke-la”
◦ Depending on the dialect this means . . .
 “Bite the wax tadpole,” or
 “Female horse stuffed with wax”
 In Taiwan: Pepsi’s slogan, “Come alive with
the Pepsi generation” came out as “Pepsi
will bring your ancestors back from the
dead”

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Communication Communication tool Example
objective
Awareness Mass communication AA insurance –
sources. ‘that’s the job of
Broadcast media (tv & the AA’
radio) national/ regional
magazines & newspapers

Interest Mass communication Direct line –

sources. 20% reduction
Same media as above but
not necessarily the same 1
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Communicatio Communication tool Example
n objective
Preference Advertising, publicity & PR, & First direct – TV & direct
personal sources. News story mail – ‘tell us one good
reports, comparative advertising thing about your bank’
& word-of-mouth from friends &
relatives

Trial Sales promotion & personal Churchill insurance –

sources. Special offers, ‘give the dog a phone’
salespeople, relatives, friends

Adoption Personal sources &, for Bank of Scotland –

reassurance, mass ‘friend for life’
communication. Salespeople,
friends & relatives, broadcast &
print advertising
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 Awareness
- for each communication objective
different communication tools will have
greater effectiveness. E.g. if the target
audience is unaware of the product/
service, the objective is to build
awareness: they can reach a large
audience quickly & at a relatively low
cost per head.

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 Interest
- communication needs to appeal to
consumers’ effective judgment. The
consumer needs to be informed of its
features & characteristics. Mass
communication sources may continue to
be used to stimulate interest in the
product, although the message may
change from ‘here we are’ to ‘this is
what we are’.

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 Preference
- First Direct attempted to build a
preference for its telephone banking service
by asking its competitors’ customers: ‘tell us
one good thing about your bank’.

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• Preference

- Direct Line attempted to change

individuals’ beliefs about appropriate
providers of home insurance & shook up
the market with its first television
advertisement for home insurance which
portrayed the title red phone as the ‘low
cost’ hero coming to the rescue of house
buyers paying high insurance premiums to
building societies.
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 Trial
- the behavioral stage often comes in two
stage: trail & adoption
- trial can be perceived as the
encouragement of consumers to interact
with the financial services provider,
perhaps to respond to an invitation to
call for an insurance quote. Consumers
may even engage in a ‘pseudo-trial’ of
the product based on friends’ &
relatives’ experiences of the product

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 Adoption
- adoption does not mark to the end of
communication with consumers. Having
adopted a financial product a consumer can
terminate the contract & switch to another
financial provider at any time. Thus, the
role of communication is still important
reassured & reminded of the benefits
offered by the financial institutions.

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- Message is the key to the achievement of
communication objectives.
- Knowing what to say is important, since a
single message may not have the same level
of effectiveness or even produce the same
desired response from different segments
of the market.
- In order to be effective, the message needs
to have a theme, appeal or unique selling
preposition. Appeals can be rational,
emotional & moral

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 Rational appeals
- Rational themes appeal to logical reasoning. In
the context of advertising financial services,
rational appeals might focus on the actual product
or service, its features, quality, value,
performance, etc.
- due to a number of factors associated with the
advertising of financial services & consumers’
difficulties in effectively evaluating them, it is not
always possible to focus on product features&
technical aspects of offering. This is perhaps an
explanation why few financial services ads use
rational appeals, & those that do focus almost
entirely on price or delivery as part of the appeal.

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 Emotional appeals
- attempt to rouse negative/ positive feelings
in an attempt to motivate individuals. Positive
appeals may focus on the use of humor, love
or pride.

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 Emotional appeals
- McKechnie et al & McKechnie & Leather (1998)
investigated factors influencing consumers’
likeability of financial services television
advertisement & the subsequent impact on their
behavior:
i. the commercial should be stimulating
ii. The context should be appealing & relevant
iii. The message should be targeted & fresh
iv. People in the commercial should appear authentic.
- The organization should be perceived as having a
personal touch & be able to communicate in a
‘down-to-earth manner.

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 Emotional appeals
- Negative appeal focus on fear, guilt & shame in
order to motivate. According to Sternthal &
Craig (1974), besides humor fear is the most
commonly used basis for persuasion. Fear is
powerful motivator & can influence buying
behavior. Marketing communications generally
attempt to inform consumers of the benefits of
purchasing &/ or using a product/ service
- Fear appeals generally have been used to modify
social & health-related behavior, for e.g. the
Health Education Board for Scotland makes
extensive use of fear in its campaign to
encourage people to give up smoking, stop
taking drugs & take care in sun.

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Financial Fear Example
product appeal
Mortgage Fear of ‘You no doubt work hard to put a roof over
protection repossession your family’s head…if the main mortgage
of property & payer is unable to work through sickness/
home unemployment, then plans have to be made
to make sure the payments don’t dry up’
(Clydesdale bank)
Pension Fear of ‘Only 2% of the population with existing
impoverished pension arrangements will retire on the
old age maximum pension, 46% of pensioners rely
solely on the State pension, 1 in 3 pensioners
currently have to survive on less than £100
per month’ (Barclays Bank ‘1997 misery gap
survey’)
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Financial Fear appeal Example
product

Home Fear of theft & loss ‘You’ve probably spent a lot of time,
insurance of possessions & effort & money on your home & though
invasion of private you may not want to think about it,
space accidents do happen & can be
expensive without the right insurance
cover’ (Bank of Scotland)
Life Fear of leaving ‘The family is the most important thing
assurance dependants & loved in most peoples lives, & high priority is
ones to fend for placed on making sure that they will
themselves in an be looked after if the worst should
uncertain future happen to you’ (Clydesdale bank)
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Why fear is used in promoting financial services:
- Financial services are intangible entitles & are difficult to
display in advertising.
- Benefits are difficult to understand & difficult to
communicate.
- Outcomes of products are often not known & therefore
cannot be communicated
- Financial products are high in credence qualities & many
consumers do not have the know-how to assimilate
advertised information.
- Lack of interest in many financial products has a negative
impact on advertising.
- Regulatory limitations of advertising reduce its
effectiveness.

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Why fear works in the promotion of financial services
- The future in uncertain & many consumers may have
a natural fear of their futures in a financial context.
- Many products have a legal obligation to buy, creating
a fear of stepping outside the law.
- Families with dependants will have a natural worry for
those they are responsible for.
- Fear can be induced – psychologists have shown that
anxiety can be learned by observing another person
produce such a response (Bandura & Walters, 1963)
making advertising effective at inducing fear.

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 Moral appeals
- Work on an audience’s sense of what is right
& wrong. In the financial services sector
success has been achieved in the area of
ethical investments, yet the Co-operative
Bank is the only bank to have positioned itself
as an ‘ethical’ financial institution.

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Effects of intangibility, inseparability, heterogeneity & contextuality on the

promotion of financial services

Characteristics Implications Marketing actions Examples

Intangibility The greater Use physical evidence Llyods Bank –

the & artefacts such as Black
intangibility, branches& other Horse.Norwich
the greater delivery points. Use Union – Great
the need to concrete, specific Wall of China.
create language & symbols Direct Line
concreteness Insurance – little
red phone

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Characteristics Implications Marketing Examples
actions
Inseparability The greater the Include both the Royal Bank of
inseparability, service deliverer Scotland – ‘We
the greater the & the customer know where
need to show in the you’re coming
participation of advertisement from, you know
customers where you are’

Heterogeneity The greater the Show the AA Insurance –

Heterogeneity, process & scope insurance
the greater the of the service, champions
need to stress performance
quality records, etc. to
gain credibility of
performance
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Characteristics Implications Marketing Examples
actions

Contextuality The greater Highlight the Barclaycard

the specificity sequence of – loss of
of context, the events which property &
greater the comprise the money
need to service Direct Line –
characterize experience insurance
the service claims
through the
illustration of a
sequence of
events

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 Provide
Information

 Traditional function of promotion was to

inform the market about the availability of a
particular good or service
 Marketers still direct large portions of current
promotional efforts at providing information

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 Increase
Demand

 Some promotions are aimed at increasing

primary demand, the desire for a general
product category
 More promotions are aimed at increasing
selective demand, the desire for a specific
brand

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 Differentiate
the Product

 Product differentiation is a frequent

objective
 Homogenous demand for many
products results when consumers
regard the firm’s output as virtually
identical to its competitors’– then,
the firm has virtually no control over
marketing variables
 Product differentiation permits more
flexibility in marketing strategy
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 Promotion can explain the greater
Accentuate
ownership utility of a product to Product’s
buyers, thereby Value
accentuating(noticeable or
prominent) its value and justifying a
higher price

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 For the typical firm, sales
fluctuations may result from
cyclical, seasonal, or irregular Stabilize
demand Sales
 Stabilizing these variations is often
an objective of promotional
strategy

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 • Promotional mix: blend
Personal of personal selling and
Selling nonpersonal selling
(including advertising,
sales promotion, direct
marketing, and public
Nonpersonal relations) designed to
Selling achieve promotional
objectives

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 Advertising

 Advertising: paid, nonpersonal

communication through various
media by a business firm, not-for-
profit organization, or individual
identified in the message with the
hope of informing or persuading
members of a particular audience
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 Sales promotion

 Sales promotion: marketing activities

other than personal selling, advertising,
and publicity that stimulates consumer
purchasing and dealer effectiveness
(includes displays, trade shows,
coupons, premiums, contests, product
demonstrations, and various
nonrecurrent selling efforts)
 Trade promotion: sales promotions
aimed at marketing intermediaries
rather than ultimate consumers
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 Direct marketing

 Direct marketing: direct

communications other than
personal sales contact between
buyer and seller, designed to
generate sales, information
requests, or store visits
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 Public relations

 Public relations: firm’s communications

and relationships with its various publics
 Publicity: stimulation of demand for
good, service, place, idea, person, or
organization by unpaid placement of
commercially significant news or
favorable media presentations

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 Table : Relating Promotion to the Communications Process

Personal Sales Direct Public

Selling Advertising Promotion Marketing Relations
Permits Reaches a large Produces an Generates an Creates a
measurement of group of potential immediate immediate positive
effectiveness. consumers for a consumer response. attitude toward
Elicits an relatively low response. Covers a wide a product or
immediate price per Attracts attention audience with company.
response. exposure. and creates targeted Enhances
Tailors the Allows strict product advertising. credibility of a
message to fit control over the awareness. Allows product or
the customer. final message. Allows easy complete, company.
Can be adapted to measurement of customized,
either mass results. personal
audiences or Provides short- message.
specific audience term sales Produces
segments. increases. measurable
results.
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 Table : Relating Promotion to the
Communications Process (Continued)

Personal Sales Direct Public

Selling Advertising Promotion Marketing Relations

Relies almost Does not permit Is nonpersonal Suffers from May not
exclusively upon totally accurate in nature. image permit
the ability of the measurement of Is difficult to problem. accurate
salesperson. results. differentiate Involves a high measurement
Involves high Usually cannot from cost per reader. of effect on
cost per contact. close sales. competitor’s Depends on sales.
efforts. quality and Involves much
accuracy of effort directed
mailing lists. toward
May annoy nonmarketing-
consumers. oriented goals.

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  Factors that
Nature of Market influence the
effectiveness of a
Nature of Product promotional to mix:
◦ Nature of the market
Stage in PLC ◦ Nature of the product
◦ Stage in the product
life-cycle
Price ◦ Price
◦ Funds available for
Funds Available promotion

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 Table 15.3: Factors Influencing Choice of Promotional Mix

Personal Selling Advertising

Nature of the market Limited number Large number
Number of buyers Concentrated Dispersed
Geographic Business purchaser Ultimate consumer
concentration
Type of customer
Nature of the product Custom-made, complex Standardized
Complexity Considerable Minimal
Service Business Consumer
requirements
Type of good or Trade-ins common Trade-ins uncommon
service
Use of trade-ins
Stage in the product life Often emphasized at every stage; Often emphasized at every stage;
cycle heavy emphasis in the heavy emphasis in the latter part
introductory and early growth of the growth stage, as well as
stages in acquainting marketing the maturity and early decline
intermediaries and potential stages, to persuade consumers to
consumers with the new good or select specific brands
service
Price High unit value Low unit value 4
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 Pulling strategy: promotional effort by a
seller to stimulate demand among final
users, who will then exert pressure on the
distribution channel to carry the good or
service, pulling it though the marketing
channel
 Pushing strategy: promotional effort by a
seller to members of the marketing channel
intended to stimulate personal selling of the
good or service, thereby pushing it through
the marketing channel
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 Attention

Attention
AIDA is a linear
process:
You must capture
Interest attention
before you can
Use the develop
appropriate Desire interest, interest
promotional tools: must be
Don’t try to do it all developed before
with one ad! desire, etc.
Action
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 AIDA - Attention, Interest, Desire, Action
 A linear, sequential process based on a
tripartite approach to attitude, in which we
believe that cognition precedes affect, which
precedes behavior.
 AIDA is best applied to a promotional
objective, not to a single advertisement

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 Step 1: Attention
 The first step is to create awareness, then
develop basic cognitive beliefs about the
product/service.
 Advertising, public relations, or personal
selling can all be used to accomplish this.
 What are the beliefs target market members
should have about your product? Is their
existing knowledge accurate?

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 Step 2: Interest
 The second step is to create positive
feelings toward the product/service through
first developing a liking for the brand, then
preference.
 Advertising is effective at developing liking,
weaker at developing preference (selling
and public relations can play greater roles).
 What % like your product? What % prefer
your product?

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 Step 3: Desire
 This is the formation of a purchase
intention: a conviction by the consumer that
is the brand they should buy.
 The issue here is to more someone from a
preference to an intention.
 Increase value in the buyer’s eyes
 Sales promotion and personal selling are
particularly useful here

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 Step 4: Action
 Purchase intention is not a purchase.
 Need to stimulate the buyer to take action.
 Possibilities: Time sensitive offer, emphasis
on positive or negative reinforcement.
 You must get buyers to perceive that there is
more value to action than inaction (ratio of
benefits to costs)

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 Table 15.4: Promotional Budget Determination
Method Description
Percentage-of-sales Promotional budget is set as a
method specified percentage of either past or
forecasted sales.
Fixed-sum-per-unit Promotional budget is set as a
method predetermined dollar amount for
each unit sold or produced.
Meeting competition Promotional budget is set to match
method competitor’s promotional outlays on
either an absolute or relative basis.
Task-objective Once marketers determine their
method specific, promotional objectives, the
amount (and type) of promotional
spending needed to achieve them is
determined.
Example
“Last year we spent $10,500 on promotion
and had sales of $420,000. Next year we
expect sales to grow to $480,000, and we are
allocating $12,000 for promotion.”
“Our forecast calls for sales of 14,000 units,
and we allocate promotion at the rate of $65
per unit.”
“Promotional outlays average 4 percent of
sales in our industry.”
“By the end of next year, we want 75 percent
of the area high-school students to be aware
of our new, highly automated fast-food
prototype outlet. How many promotional
dollars will it take, and how should they be
spent?”
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 Two basic measurement tools:
◦ Direct sales results measures the effectiveness of
promotion by revealing the specific impact on
sales revenues for each dollar of promotional
spending
◦ Indirect evaluation concentrates on quantifiable
indicators of effectiveness like:
 Recall - how much members of the target market
remember about specific products or advertisements
 Readership – size and composition of a message’s
audience

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 Nature of Each Promotional Tool

Public Relations

• Highly credible
• Many forms: news stories, news features,
events and sponsorships, etc.
• Reaches many prospects missed via other
forms of promotion
• Dramatizes company or benefits
• Often the most underused element in the
promotional mix
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