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Marketing Basics - Kotler Philip

Chapter 14. Product Promotion: A Communication and Incentive Strategy


After reading this chapter, you should be able to:

1. Name and characterize the four main components of the stimulus complex.

2. List the six elements of the marketing communication process.

3. Explain how cost estimates are made and the elements of the incentive complex are selected.

4. To talk about four factors that influence the structure of the stimulus complex.

Comprehensive communications program for Pizza Inn

Pizza Inn is a large organization of privilege holders with more than 500 catering establishments. Its total annual turnover exceeds $ 50 million. The company makes special efforts to train its 500 independent privilege holders in disseminating a favorable image of its entire network of fast-food catering enterprises. After all, if one of the members of the organization uses low-quality source products, slowly serves visitors or poorly maintains cleanliness, this is detrimental to all other enterprises.

The manager of the marketing communications service of Pizza Inn is responsible for developing a comprehensive communications program. From his point of view, everything related to the company is a potential carrier of communication. According to him, consumers have three types of impressions of the company, impressions received before visiting its enterprises, impressions received during the first lunch at one of its enterprises, and impressions left after the visit. He calls them impressions of the first, second and third kinds.

The consumer gets the first impressions in three ways. He can get acquainted with the advertising of the company in newspapers, on radio and television. He can take a closer look at the Pizza Inn, passing or passing him. In this case, the very appearance of the institution carries a certain communication charge. Or he may hear what friends or colleagues say about Pizza Inn.

The consumer gets the second type of impression when he dines for the first time at Pizza Inn. He examines the interior and furnishings and finds them either attractive or gray, draws attention to the appearance and attitude of the employees - are they friendly, how skillfully and quickly work. Even the view of the menu and the proposed selection of dishes make a certain impression. The visitor orders and receives food, which gives him either joy or disappointment. He compares the quality of the food and the general impression of the dinner with its price and makes a judgment on whether the cash costs made are justified.

After lunch, the client leaves, feeling satisfaction, indifference or disappointment. However, these are not his last impressions of Pizza Inn. He will still see or hear the company’s advertisement, meet with its establishments on the road, and possibly hear how others respond about it.

It is clear that the control sphere of the manager of the marketing communications service should extend far beyond the advertising budget of the company. Its task is to make sure that the company as a whole and all its employees inspire the target consumers with a feeling of confidence in the quality of the goods, the high class of service and the profitability of the prices of the enterprise

Modern marketing requires much more than just creating a good product, assigning an attractive price to it and ensuring its availability for target consumers. Firms must still communicate with their customers. At the same time, there should be absolutely nothing accidental in the content of communications.

To ensure effective communication, firms hire advertising agencies to create effective ads, sales promotion specialists to develop incentive programs, and public opinion specialists to shape the organization. Firms teach their sales staff to be friendly and knowledgeable. For most companies, the question is not whether to engage in communication or not, but how much and how to spend in this area.

A modern company manages a complex system of marketing communications (see. Fig. 73). She herself maintains communication with her intermediaries, consumers and various contact audiences. Its intermediaries maintain communication with their customers and various contact audiences. Consumers engage in verbal communication in the form of rumors and rumors with each other and other contact audiences. And at the same time, each group maintains communication feedback with everyone else.

Communications and feedback in the marketing communications system

Fig. 73. Communications and feedback in the marketing communications system

The complex of marketing communications (also called the incentive complex) consists of four main means of influence.

Advertising - any paid form of non-personal presentation and promotion of ideas, products or services on behalf of a well-known sponsor.

Sales promotion - short-term incentive measures to encourage the purchase or sale of goods or services.

Propaganda (“publicity”) is an impersonal and non-paid sponsor stimulation of demand for a product, service or business organizational unit through the dissemination of commercially important information about them in print media or a favorable presentation on radio, television or from the stage.

Personal sale - the oral presentation of the goods during a conversation with one or more potential buyers with the aim of making a sale2.

Each category has its own specific methods of communication, such as trade presentations, expositions at points of sale, souvenir advertising, specialized exhibitions, fairs, demonstrations, catalogs, sales and advertising literature, press information kits, posters, contests, premiums, coupons and offset coupons. At the same time, the concept of communication goes far beyond all of these tools and techniques. The appearance of the product, its price, the shape and color of the package, the manners and clothes of the seller - all this says something to the buyer. To achieve the greatest communication effect, the company must carefully coordinate its entire marketing mix, and not just the incentive mix.

This chapter discusses two main issues. What are the main steps in the process of developing effective marketing communications? How should a stimulus complex be formed?