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Basics of Marketing - Kotler Philip

Chapter 14. Promotion of goods: communication and incentive strategy

Objectives

After reading this chapter, you should be able to:

1. To name and characterize the four main components of the incentive system.

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

3. Explain how the budgeting of expenditures and the selection of elements of the stimulus complex takes place.

4. Tell about four factors that affect the structure of the incentive system.

Comprehensive communication program of Pizza Inn

The company "Pizza Inn" is a large organization of privilege holders, numbering more than 500 catering enterprises. The total annual turnover exceeds $ 50 million. The firm makes special efforts to train its 500 independent holders of privileges to spread the favorable image of the entire network of their fast-food restaurants. After all, if one of the members of the organization uses low-quality input products, slowly serves visitors or does not support cleanliness, it damages all other enterprises.

The manager of the marketing communications service of Pizza Inn is responsible for the development of a comprehensive communication program. From his point of view, everything that concerns the firm is a potential carrier of communication. In his opinion, consumers have three types of impressions about the firm, impressions received before visiting its enterprises, impressions received during the first dinner in one of its enterprises, and impressions left after the visit. He calls them impressions of the first, second and third kinds.

Impressions of the first kind the consumer receives in three ways. He can get acquainted with the company's advertising in newspapers, on radio and television. He can look at the "Pizza Inn" institution, passing or passing by him. In this case, the appearance of the institution itself has a certain communication charge. Or he can hear what friends or co-workers say about Pizza Inn.

Impressions of the second kind the consumer receives, for the first time having dinner in an institution "Pizza Inn". He examines the interior and furnishings and finds them either attractive or gray, draws attention to the appearance and attitude of employees - whether they are friendly, how skillfully and quickly they work. Even the look of the menu and the proposed selection of dishes make a definite impression. The visitor orders and receives food, which delivers to him either joy or disappointment. He compares the quality of food and the general impression of lunch with its price and makes a judgment as to whether the money costs are justified.

After dinner, the client leaves, feeling satisfied, indifferent or disappointed. However, this is not his last impression of the company Pizza Inn. He will see or hear the advertisement of the company, meet on the road with its establishments, and maybe hear how others react about it.

It is quite obvious that the scope of control of the marketing communications service manager should extend far beyond the company's advertising budget. Its task is to make sure that both the firm as a whole and all its employees instill in the target consumers a sense of confidence in the quality of the goods, the high class of service and the profitability of the enterprise's prices.

Modern marketing requires much more than just create a good product, assign an attractive price to it and ensure its availability to the 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 experts in organizing public opinion to form an image of the organization. Firms teach their sales staff to be friendly and knowledgeable. For most businesses, the question is not whether to engage in communication or not, but how much and how exactly to spend in this area.

A modern firm manages a complex system of marketing communications (see Figure 73). It itself maintains communication with its intermediaries, consumers and various contact audiences. Its intermediaries maintain communications with their consumers and various contact audiences. Consumers are engaged in oral communication in the form of rumors and rumors with each other and other contact audiences. And simultaneously, each group supports communication feedback with all the others.

Fig. 73. Communication and feedback in the system of marketing communications

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

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

Stimulation of sales - a short-term incentive measures to encourage the purchase or sale of goods or services.

Propaganda ("publicity") is an impersonal and non-sponsored stimulation of the demand for a product, service or business organizational unit through the dissemination of commercially important information about them in print media or favorably presented on radio, television or from the stage.

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

Each category has its own specific methods of communication, such as trade presentations, exposures in the places of sale of goods, advertising with the help of souvenirs, specialized exhibitions, fairs, demonstrations, catalogs, trade and advertising literature, advertising information compilations for the press, posters, Bonuses, coupons and coupons. At the same time, the concept of communication goes far beyond all these means and techniques. The external design of the product, its price, the shape and color of the package, the manners and clothing of the seller - all this tells the buyer something. To achieve the greatest communication effect, the firm needs to carefully coordinate its entire marketing mix, and not just the stimulus package.

This chapter discusses two main issues. What are the main stages of the process of developing effective marketing communications? How should the stimulus package be formed?