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Chapter 9
Promoting Products: Communication and
Promotion Policy and Advertising
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Key Terms• Informative advertising• Media• Promotion mix• Reminder advertising • Atmosphere• Channel conflict• Events
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“I don’t know who you are. I don’t know your company. I don’t know your company’s product. I don’t know what your company stands for. I don’t know your company’s customers. I don’t know your company’s record. I don’t
know your company’s reputation. Now— what was it you wanted to sell me?”
-- McGrawMcGraw –– Hill PublicationsHill Publications
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Chapter ObjectivesChapter Objectives
• Outline the six steps six steps in developing effectiveeffective communications
• Define the ways of setting a total promotional budgetbudget
• Explain each promotional tool each promotional tool and the factors in setting the promotion mix
• Describe the major decisions major decisions in advertising
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Promotion Mix
• A promotion mix is a company’s total marketing communications program and it consists of a specific blend of:
– AdvertisingAdvertising– Sales PromotionsSales Promotions– Public RelationsPublic Relations– Personal SellingPersonal Selling
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The Communication ProcessThe Communication Process
1. Identify the target audiencetarget audience2. Determine the communication
objectiveobjective
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Buyer Readiness StatesBuyer Readiness States
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Communication StrategyCommunication Strategy
• The communication process has 6 6 broad stages
– To whomwhom to say it– WhyWhy to say it– WhatWhat to say– HowHow to say it – How oftenoften to say it– WhereWhere to say it
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Communications StrategyCommunications Strategy
To whom to say itTo whom to say it– Define the targettarget
market– Research– Wants and needs
clearly identified
Why say itWhy say it– Expect it to have a
certaincertain effect– What needs to be
accomplished
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Communications StrategyCommunications Strategy
• What to sayWhat to say– Methods chosen
need to achieve the strategic objective
– Consumer adoption process model
• How to say itHow to say it– The execution stage–Communication that
most accurately accomplishes the goals consistent with the target market
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Communications StrategyCommunications Strategy
• How often to say itHow often to say it– Consumer-driven
and budget-driven
• Where to say itWhere to say it– Using the various
components of the communications mix– Select appropriate
media
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Communications StrategyCommunications Strategy• Push/pull strategiesPush/pull strategies– Push strategyPush strategy
Marketing communication efforts to intermediariesintermediaries, who then push the product to their customer base
– Pull strategyPull strategyMarketing communication efforts directly to the consumerconsumer, who purchases the product directly or through an intermediary
– Both are common in the communications industry
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Push vs. Pull Strategy
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens13
Word of Mouth (WOM) Communication Word of Mouth (WOM) Communication
• Most powerful form of communication• Products cannot be tested before
purchase so outside advice is important• Elements of the communication mix
can influence WOM• In this way, what we what we dodo has more
impact than what we what we saysay
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Word of Mouth (WOM) CommunicationWord of Mouth (WOM) Communication
• Impact of word of mouthImpact of word of mouth– Should give people something interesting
to talk about– Create communities and networks to
connect people– Work with influential communities– Create advocate programs– Blogs
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Word of Mouth (WOM) CommunicationWord of Mouth (WOM) Communication
• Measuring word of mouthword of mouth– Lifetime value of a customer based on:• Gross profit on an average purchase• Average number of purchases a customer
makes each year• Average number of years customer will
continue to purchase• Probability that customer will continue to
purchase
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The Communication ProcessThe Communication Process
Design the messageDesign the message
• Message ContentContent • Message StructureStructure • Message FormatFormat • Message SourceSource
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The Communication ProcessThe Communication Process
• Select Communication ChannelsChannels
• PersonalPersonal Communication Channels • NonNon--personal personal Communication Channels
• Select the Message Source
• Measure Communication Results
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Establishing the Total Marketing Establishing the Total Marketing Communications BudgetCommunications Budget
• Affordable Method Affordable Method – based on what the company can afford
• Percentage of Sales Method Percentage of Sales Method – based on a percentage of current or forecasted sales
• Competitive Parity Method Competitive Parity Method – based on competitors’ budgets
• Objective and Task Method Objective and Task Method – based on objectives, tasks, and estimated costs
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Nature of Each Promotion ToolNature of Each Promotion Tool
Advertising Advertising
Personal Selling
Personal Selling
SalesPromotion
SalesPromotion
PublicRelations
PublicRelations
DirectMarketing
DirectMarketing
Reach Many Buyers, Repeat Message Many Times, Impersonal, Expensive
Reach Many Buyers, Repeat Message Many Times, Impersonal, Expensive
Personal Interaction, Relationship Building, Most Expensive Promotional
Tool
Personal Interaction, Relationship Building, Most Expensive Promotional
Tool
Wide Assortment of Tools, Rewards Quick Response, Efforts Short-LivedWide Assortment of Tools, Rewards Quick Response, Efforts Short-Lived
Very Believable, Dramatize a Company or Product, Underutilized
Very Believable, Dramatize a Company or Product, Underutilized
Nonpublic, Immediate, Customized, Interactive
Nonpublic, Immediate, Customized, Interactive
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Factors in Setting the Promotion Mix
• TypeType of Product and Market
• PushPush vs. PullPull Strategy
• Buyer ReadinessReadiness State
• Product Life-CycleLife-Cycle Stage
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AdvertisingAdvertising• Advertising is any paid form of non-personal
presentation and promotion of ideas, goodsideas, goods, or services by an identified sponsor
• Role of advertisingRole of advertising– To inform, create awareness in, and attempt to
persuade new customer and reinforce the buying behavior of present customers
– For hospitality, most important to create and maintain awareness of the firm, or promote a particular component or service
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AdvertisingAdvertising• Ideally, will accomplish:Ideally, will accomplish:– Tangibilize the service element– Promise a benefit that can provide
solutions to problems– Differentiate the property from that of the
competition– Have positive effects on employees who
must execute the promises– Capitalize (benefit) on word of mouth
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AdvertisingAdvertising
CollateralCollateral material material– Promotional
materials such as brochures, direct mail, and other forms of advertising that are used to informinform customers and createcreate interest
MerchandisingMerchandising– A tool used in the
marketing communications mix to reach identified target markets
– Primarily an in-house marketing technique used to stimulate sales of additional products or services on premise
– A long-term goal is increasing customer satisfaction
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MMerchandisingerchandising
Basic rules of merchandising:– Have a purposepurpose beyond sales
projections– CompatibilityCompatibility and consistency– PracticalityPracticality– ConsistencyConsistency– SimplicitySimplicity
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MMerchandisingerchandising
• Examples of good merchandising– Business centers Business centers in hotels that cater
to business travelers– PizzaPizza on finer hotels’ room service
menus– Mini bars Mini bars in guest rooms
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Major Decisions in AdvertisingMajor Decisions in Advertising
• Setting the ObjectivesObjectives
• Setting the Advertising BudgetBudget
• Message DecisionsDecisions
• Media DecisionsDecisions
• Campaign EvaluationEvaluation
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Setting the ObjectivesSetting the Objectives• Informative advertising Informative advertising is used to inform
consumers about a new product or feature to build primary demand
• Persuasive advertising Persuasive advertising is used as competition increases and a company’s objective becomes building selective demand
• Reminder advertising Reminder advertising is used for mature products since it keeps consumers thinking about the product
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Major Advertising DecisionsMajor Advertising Decisions
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Setting the Advertising BudgetSetting the Advertising Budget
• Specific factors to be considered when setting an advertising budget:– Stage in the product life cycle – Competition– Market share – Advertising frequency – Product differentiation
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Setting the Advertising BudgetSetting the Advertising Budget
• General factors to consider:General factors to consider:– Strategic versus Tactical Budgets – Overall Promotional Budget – Consistency – Opportunities to Stretch the Budget – The Final Budget
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Message DecisionsMessage Decisions
• Message Generation
• Message Evaluation and Selection
• Message Execution
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Media DecisionsMedia Decisions
• Deciding on ReachReach, FrequencyFrequency, and ImpactImpact
• Choosing Among Major Media TypesMedia Types
• Selecting Specific Media VehiclesMedia Vehicles
• Deciding on Media TimingMedia Timing
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Profiles of Major Media Types
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th editionUpper Saddle River, NJ 07458 Kotler, Bowen, and Makens34
Public RelationsPublic Relations (PR) (PR)
• PR effort can steersteer in a positive or negative way
• Press release is a prepared document for release to selected media containing information or “newsnews” about a firm
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Public RelationsPublic RelationsUndertaking public Undertaking public relationsrelations– An ongoing task that is
an important part of the marketing planning
– Happens at corporate, property or unit level
– Employee and management belonging to public organizations contributes in some manner to PR
Planning public relationsPlanning public relations
– Identify a purpose and know the target markets
– Consider the benefit to the customer
– Know the correct media to reach the target market prospects
– Establish relationships with editorseditors and writerswriters and other media
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Public RelationsPublic Relations
Public relations guidelinesPublic relations guidelines:– Budget and spendspend wisely– Use reputable PR personnelpersonnel or firms– Have a writtenwritten PR planplan– PR people must understandunderstand your plan– Have a consistent, ongoingongoing program– Generate innovativeinnovative ideas– Great PR depends on creativecreative management
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PublicityPublicity Publicity is created to
generate continued positive coverage positive coverage of a firm
Have a targeted purpose and an evaluation post-publicity
Publicity helps with promotions
Starts with inviting media to cover a specific event
Press releases Press releases of background information are made available at the event
PR works the event, pitching to the media
Follow-up calls and thank you
Program evaluation Make provisions for the
unexpected; crisis management teams
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DiscussionDiscussion Questions Questions• Find several advertisements for a hospitality or
travel organisation. Then visit their web site. Is the communication provided on the web site congruent with and support their print adverstising and broadcast advertising? Explain your answers.
• Recently, a number of restaurants have shifted some of their promotional budget from advertising to public relations. What benefits does public relations offer that would make the restaurants spend more?
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End of End of chapter slideschapter slides
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