1. Chapter 9 Promoting Products: Communication and Promotion Policy and Advertising

2. Key Terms Informative advertising Media Promotion mix
Reminder advertising
Atmosphere
Channel conflict
Events

3. “I don’t know who you are. I don’t know your company
“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?” - McGraw – Hill Publications

4. Chapter Objectives
Outline the six steps in developing effective communications
Define the ways of setting a total promotional budget
Explain each promotional tool and the factors in setting the promotion mix
Describe the major decisions in advertising

5. Promotion Mix
A promotion mix is a company’s total marketing communications program and it consists of a specific blend of:
Advertising
Sales Promotions
Public Relations
Personal Selling

6. The Communication Process
Identify the target audience
Determine the communication objective

7. Buyer Readiness States

8. Communication Strategy
The communication process has 6 broad stages
To whom to say it
Why to say it
What to say
How to say it
How often to say it
Where to say it

9. Communications Strategy
To whom to say it
Define the target market
Research
Wants and needs clearly identified
Why say it
Expect it to have a certain effect
What needs to be accomplished

10. Communications Strategy
What to say
Methods chosen need to achieve the strategic objective
Consumer adoption process model
How to say it
The execution stage
Communication that most accurately accomplishes the goals consistent with the target market

11. Communications Strategy
Where to say it
Using the various components of the communications mix
Select appropriate media
How often to say it
Consumer-driven and budget-driven

12. Communications Strategy
Push/pull strategies
Push strategy
Marketing communication efforts to intermediaries, who then push the product to their customer base
Pull strategy
Marketing communication efforts directly to the consumer, who purchases the product directly or through an intermediary
Both are common in the communications industry

13. Push vs. Pull Strategy
©2006 Pearson Education, Inc Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

14. 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 do has more impact than what we say

15. Word of Mouth (WOM) Communication
Impact 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

16. Word of Mouth (WOM) Communication
Measuring word 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

17. The Communication Process
Design the message
Message Content
Message Structure
Message Format
Message Source

18. The Communication Process
Select Communication Channels
Personal Communication Channels
Non-personal Communication Channels
Select the Message Source
Measure Communication Results

19. Establishing the Total Marketing Communications Budget
Affordable Method – based on what the company can afford
Percentage of Sales Method – based on a percentage of current or forecasted sales
Competitive Parity Method – based on competitors’ budgets
Objective and Task Method – based on objectives, tasks, and estimated costs

20. Nature of Each Promotion Tool
Advertising
Personal
Selling
Sales
Promotion
Public
Relations
Direct
Marketing
Reach Many Buyers, Repeat Message Many Times, Impersonal, Expensive
Personal Interaction, Relationship Building, Most Expensive Promotional Tool
Wide Assortment of Tools, Rewards Quick Response, Efforts Short-Lived
Very Believable, Dramatize a Company or Product, Underutilized
Nonpublic, Immediate, Customized, Interactive

21. Factors in Setting the Promotion Mix
Type of Product and Market
Push vs. Pull Strategy
Buyer Readiness State
Product Life-Cycle Stage

22. Advertising
Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor
Role 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

23. Advertising 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

24. Advertising Merchandising Collateral material
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
Collateral material
Promotional materials such as brochures, direct mail, and other forms of advertising that are used to inform customers and create interest

25. Merchandising Basic rules of merchandising:
Have a purpose beyond sales projections
Compatibility and consistency
Practicality
Consistency
Simplicity

26. Merchandising Examples of good merchandising
Business centers in hotels that cater to business travelers
Pizza on finer hotels’ room service menus
Mini bars in guest rooms

27. Major Decisions in Advertising
Setting the Objectives
Setting the Advertising Budget
Message Decisions
Media Decisions
Campaign Evaluation

28. Setting the Objectives
Informative advertising is used to inform consumers about a new product or feature to build primary demand
Persuasive advertising is used as competition increases and a company’s objective becomes building selective demand
Reminder advertising is used for mature products since it keeps consumers thinking about the product

29. Major Advertising Decisions

30. Setting 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

31. Setting the Advertising Budget
General factors to consider:
Strategic versus Tactical Budgets
Overall Promotional Budget
Consistency
Opportunities to Stretch the Budget
The Final Budget

32. Message Decisions
Message Generation
Message Evaluation and Selection
Message Execution

33. Media Decisions
Deciding on Reach, Frequency, and Impact
Choosing Among Major Media Types
Selecting Specific Media Vehicles
Deciding on Media Timing

34. Profiles of Major Media Types
©2006 Pearson Education, Inc Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ Kotler, Bowen, and Makens

35. Public Relations (PR)
PR effort can steer in a positive or negative way
Press release is a prepared document for release to selected media containing information or “news” about a firm

36. Public Relations Undertaking public relations
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 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 editors and writers and other media

37. Public Relations Public relations guidelines: Budget and spend wisely
Use reputable PR personnel or firms
Have a written PR plan
PR people must understand your plan
Have a consistent, ongoing program
Generate innovative ideas
Great PR depends on creative management

38. Publicity
Publicity is created to generate continued 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 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

39. Discussion 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?

40. End of chapter slides